Australian retailers have been fairly slow to embrace online, but now we’re catching up with what’s happening in the US and Europe. That said, they still need to work smarter if they are to survive.

The focus here is still very much on acquisition and it’s being driven with a more sophisticated approach to customer interaction. In his Forrester Research report “Online Retailing in Australia 2010: Marketing, Merchandising and Customer Service” Steven Noble shows that search engine marketing is still the most effective online tool for retailers, but other approaches, such as shopping comparison engines and social networking sites are also starting to come into the mix.

The weakness, he says, is how retailers are tracking behaviour. Many, but not all, will look at traffic to their site, but there are a myriad of other ways of measuring sources and attitudes that are being ignored. Stephen reckons competition in the online retail space will become much more intense over the next two years and operators will need to work smarter if they are to hang-on to their share of the market.

First published on CBS News