Moving Forward Staff

Updated · May 15, 2001

With customer acquisition costs on the rise, online retailers who want to survive will need to be resourceful.

According to research/analysis firm IDC the cost of acquiring a customer on the Web is on the rise and will reach $122 by 2003. Their advice to online retailers is to proactively search for ways in which to cut acquisition costs.

Dealing ingeniously with an increasingly competitive marketplace will be easier for some – especially those who have their fingers in both the online and offline worlds. Online retailers with multi-channel operations will invariably find less expensive ways to get customers – IDC recommends that they use their stores and catalogues as promotional vehicles for their websites, pushing as many offline customers online as they can manage.

As for pure-plays, IDC suggest that they find better ways to target Web users – by looking at overseas markets and by revisiting the phenomenon of Web ads.

Forrester recently lauded the burgeoning European Net marketplace, pointing out that a growing number of European Net users have made the continent an exciting market for e-tailers and a showground for dynamic Web advertising. The Net is proving so popular in Europe that it has, according to Forrester, become mandatory for large advertisers to include an online channel in their marketing campaigns. Having recently surveyed 31 top European advertisers, they found them to have great faith in efficiency and low response time showcased by online advertising.

According to Forrester, European advertisers and e-tailers report that Web-ads offer key advantages in terms of customer acquisition goals. According to one of the companies they surveyed, "Web ads are flexible to use and deliver a lot more quantitative data on customers."

In addition, Forrester noted that European advertisers and online retailers saw Web ads moving toward more integrated campaigns across multiple devices such as interactive TV and mobile phones. Forrester believes that the European market is ready to accept and respond to such dynamic online advertising.

Both Forrester and IDC agree that online retailers need to rethink their Web strategies. Their advice to e-players is to overcome stale thinking and to figure out new and cunning strategies for delivering ads, acquiring new customers, and reaching out to new dynamic marketplaces.

Reprinted from

  • Retail
  • Read next