CAMBRIDGE, INDIA: The economy is forcing online retailers to change their marketing tactics in order to acquire and retain customers, according to findings from The State of Retailing Online 2009, the 12th annual Shop.org study conducted by Forrester Research Inc.

The survey of 117 online retailers also found that, while the number of companies focusing on customer retention has nearly doubled in the past year, many retailers see the recession as an opportunity to capture market share from weakened competition, said a press release.

"The State Of Retailing Online 2009: Marketing Report," the first of a three-part series of reports based on the study, was released in conjunction with Shop.org's Online Marketing Workshop in Scottsdale, Ariz.

While Internet sales continue to outpace traditional retail sales, companies are realistic about current challenges.

According to the survey, one-half of respondents (54 percent) expect overall retail growth to slow during the next 12 months, and 57 per cent of respondents acknowledge the economic slowdown is hurting their company's bottom line.

That said, companies are bullish about Web operations: four out of five retailers think the Web is better suited than other channels to withstand the recession, and one-third of retailers say the downturn has enabled them to capture greater market share. Illustrating the resilience of the Web, retailers report that their conversion rates continue to hover between 3 percent and 3.5 percent as they have for years.

"Retailers everywhere are trying to get their arms around a pullback in consumer spending, and online retailers are no exception," said Scott Silverman, executive director of Shop.org.

He added that online retailers are trying to weather this economic storm by doing more with less, making smart spending decisions, and leveraging effective, affordable tactics like email to grow their businesses.

According to the survey, a majority of retailers (88 percent) list email as a high priority for the year, largely to retain customers.

Almost three-fourths of retailers (71 percent) plan to send segmented emails to customers based on stated preferences or purchase data. In addition, more than one-half of retailers will use emails that highlight new product availability (55 percent), extend invitations to participate in surveys or garner customer feedback (55 percent), and feature online-only promotions (53 percent).

 "Because consumers continue to spend online, interactive marketing spend to drive Web sales remains a lucrative investment," said Sucharita Mulpuru, Forrester Research principal analyst and author of the report.

He added that while other retail channels struggle, eCommerce managers have a unique opportunity to drive more sales and test different tactics that resonate with consumers.