Relationships over Price

Relationships over Price

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You know that relationship building has become important at retail when it begins cutting into the more traditional price-based marketing strategies as a central promotional tool for retailers. That is the trend we are seeing more and more of, particularly online, as “Relationship Marketing” initiatives are on the rise this year for merchants across the country.

The online retail industry is defining Relationship Marketing as using tactics that include e-mail search-engine marketing strategies that allow retailers to understand visitor intent and leverage behavior-based insights to target customers with relevant messages.

A recent report done by Portland, OR-based online solutions provider WebTrends claims that twice as many respondents to their survey (23%) said they would not be using price-based promotions to generate online revenue from customers during this holiday selling season, compared with 11% in 2005. Even free shipping has dropped in popularity, from 62% of retailers using it in 2005 to only 45% in 2006.

However, we are still seeing a good amount of price-based promotional offers online including percentage off or dollars off total amounts spent when that amount exceeds a certain number, and 50% off or free shipping is still a major force as a promotional tool in cyberspace.

The National Retail Federation recently reported that they are expecting 47.1% of all shoppers to purchase at least one holiday gift over the Internet this season. That’s a new high for online retail, and it obviously has retailers thinking out-of-the-box in an attempt to grab a piece of this growing market.

“It only stands to reason that as this ‘Destination Retail’ or ‘Experience-based Retail’ strategy takes hold in the brink-and-mortar world that savvy retailers would be attempting to mimic that method online,” began retail strategist Martha Refik. “Consumers want to be catered to and want to believe that a particular site can serve their specific needs. Anything merchants can do to fulfill that shopping fantasy is a winning play, online or in-store.”

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