SOURCE: WebTrends Inc.

August 02, 2005 09:00 ET

WebTrends Survey Highlights Retailers' Expectations and Tactics for 2005 Holiday Season

Internet-Only Retailers Count on Holidays for a Large Portion of Annual Revenue, but Lag Multi-Channel Retailers in Initiatives to Drive More Business From Loyal Customers

PORTLAND, OR -- (MARKET WIRE) -- August 2, 2005 -- WebTrends Inc., the global web analytics leader, today unveiled results from its "2005 Online Retail Holiday Readiness Report," which surveyed 242 online retailers about key trends and strategies they are focusing on for the upcoming holiday season. Results indicate that the holiday season accounts for 50% or more of annual revenue for one out of five multi-channel retailers, increasing to nearly one out of four for Internet-only retailers. For those that expect the holidays to net 25-50% of their annual revenue, Internet-only retailers also led the pack at 43%, followed by 37% for businesses with Internet and store channels, 31% for Internet and catalog operations, and 27% for Internet, store and catalog operations.

According to's FirstLook 2005 report, the number of new households shopping online in 2005 will be half of what was seen last year, which intensifies the pressure on online retailers to capture a greater percentage of sales from existing customers. WebTrends survey found that only 23.5% of all retailers expect 50% or more of their revenue to come from repeat customers versus new customers during the upcoming holidays. However, Internet and catalog retailers have higher expectations with 30% indicating that 50% or more of their revenue would come from repeat customers.

This holiday season, free shipping and value-added promotions (e.g., free gift with purchase) topped the list of marketing promotions retailers are planning to use to generate online revenue from loyal customers at 63% and 42% respectively. Special repeat buyer discounts tied with online-only sales as the third most popular promotional tactic at 33%, showing a dramatic increase from previous years as only 14% offered them in 2004 and 5% in 2003, according to and's 2004 Online Holiday Mood Study.

The vast majority of retailers surveyed will be executing more than four different on-site features and some as many as eight -- exemplifying the unique strengths of the Web as a dynamic channel for merchandisers to easily implement different on-site features. The five most popular on-site features planned for the upcoming holiday season include "suggested items" at 59%, "gift idea center" at 55%, "features sales item page" at 54%, "best sellers list" at 45% and "gift card" at 39%.

Despite plans to extensively utilize on-site features, 52% of all retailers surveyed are not planning to use testing techniques to optimize customer loyalty campaigns and content. The exception is retailers with annual revenue of $100 million or more, as more than 60% of them plan to use testing this year. Examining responses by business channels rather than revenue suggests that Internet and store retailers and Internet-only retailers are behind the curve in applying testing to site content and marketing promotions with 59% and 48% respectively saying they have no plans to do testing. Internet and catalog operations and Internet, catalog and store retailers fare better with a smaller percentage indicating they have no plans to do testing: 41% and 31%, respectively.

Segmentation, which is key to targeting repeat, loyal buyers, and in tailoring offers according to consumer preferences, shows a similar deficiency for Internet-only retailers. 44% indicated that they either didn't know if segmentation is important to the success of their holiday season, or that segmentation is minimally important or not important at all, compared to 38% for Internet and catalog retailers, 34% for Internet and store retailers, and 25% for Internet, catalog and store retailers.

The majority of retailers have lower shopping cart abandonment rates for repeat buyers compared to new buyers, and nearly 70% of retailers said that their browse-to-buy conversion rate for repeat buyers is higher than the conversion rate for new buyers -- underscoring the benefit of focusing on loyal, repeat customers versus new customers.

"The holidays have always been a critical time for many retailers, and this year generating more revenue from loyal, repeat customers is more important than ever," said Greg Drew, CEO and president, WebTrends Inc. "Regardless of the specific initiatives retailers are planning for the holidays, testing and optimization and advanced segmentation through web analytics will help them gain a more granular understanding of customers' preferences to more effectively tailor their offerings and expand their relationships with existing customers."


WebTrends' 2005 Online Holiday Readiness Report includes data collected from survey responses from July 7 to July 12, 2005, promoted through an outsourced, opt-in mailing list. Online retailers were invited to complete the survey in return for a copy of the report, as well as a complimentary copy of "Call to Action," the new best-selling book on web site conversion by Bryan and Jeffrey Eisenberg. The holiday season in this survey was defined as October 1 to December 31. Survey respondents represented a diverse sampling:

Nature of Retail Operations:

--  19% Internet only
--  21% Internet and catalog
--  31% Internet and store
--  29% Internet, catalog and store
Annual Revenue:
--  18% $100 million +
--  7% $50 - $100 million
--  5% $25 - $50 million
--  11% $10 - $25 million
--  6% $5 - $10 million
--  47% $0 - $5 million
--  6% Unknown
For a copy of the report visit, or contact the listed media representatives.

About WebTrends

Thousands of web-smart organizations worldwide, including more than half of the Fortune and Global 500, rely on WebTrends to improve their web site conversions and optimize their marketing performance for maximum return on investment. As the worldwide market leader for web analytics, WebTrends has become the trusted standard not only for award-winning technology, but also for a full range of consulting services and unmatched industry expertise. By delivering accurate and actionable metrics through both on-demand and software options, WebTrends ensures that its customers are positioned for both immediate and long-term success with a solution that can adapt to ever-changing business and technical requirements. For more information, visit

WebTrends and WebTrends On Demand are trademarks or registered trademarks of WebTrends Inc. in the United States and other countries. All other trademarks mentioned are the property of their respective owners.

Contact Information