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Small and medium-sized businesses will continue the recent trend of shifting their marketing budgets to digital advertising, performance-based platforms and customer retention business solutions over the next five years, according to a new U.S. SMB Spending Forecast by BIA/Kelsey. This trend creates an increasingly large market opportunity for businesses serving SMBs and developing SMB tools.

By 2015 SMBs will allocate 30 percent of their marketing budgets to traditional advertising (down from 52 percent in 2010), with the remaining 70 percent going to digital/online media (mobile, social, online directories, online display, digital outdoor), performance-based commerce (pay-per-click, deals, couponing) and customer retention business solutions (email, reputation and presence management, websites, social marketing, calendaring/appointment-setting).

"With the advent of daily deals to drive customer acquisition, SMBs are now increasingly focused on leveraging technological solutions to engage, grow and retain a higher percentage of their customers," said Neal Polachek, president, BIA/Kelsey. "As this trend accelerates, these SMBs will turn to outside providers -- media companies as well as pure-play technology providers -- to harness simple tools, which will enable them to maximize the long-term value of each new customer they acquire."

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February 17, 2012

U.S. e-commerce sales totaled $194.3 billion in 2011, up 16.1% from $167.3 billion in 2010, according to an estimate released today by the U.S. Commerce Department.

The estimate, not adjusted for seasonality, show that e-commerce is taking a bigger portion of overall retail sales in the United States. 4.6% of total retail spending took place online during 2011, up from 4.3% in 2010, according to the Commerce Department. When excluding sales in categories not commonly bought online—automobiles, fuel, grocery and foodservice sales—Internet Retailer calculates that e-commerce accounted for 8.6% of total retail sales during the year, up from 7.6% in 2010. Total retail sales, which includes e-commerce sales, increased 7.9% in 2011 and totaled $4.2 trillion, according to the Commerce Department.

Seasonally adjusted, 2011 e-commerce sales were $193.4 billion and represented 4.6% of total retail spending.

E-commerce’s strong fourth quarter helped drive this growth. Seasonally adjusted e-retail sales for the fourth quarter of 2011 totaled $51.4 billion, up 15.5% from $44.5 billion a year ago, the Commerce Department reports. In contrast, total retail sales increased 6.8% from the fourth quarter of 2010. E-commerce represented 4.8% of all retail spending during the fourth quarter of 2011, up from 4.4% a year ago.

Without the seasonal adjustment, e-retail sales in the fourth quarter of 2011 totaled $61.8 billion, up 16.1% from $53.2 billion a year ago. E-commerce represented 5.5% of total non-adjusted retail sales during the quarter. When excluding sales in categories not commonly bought online, Internet Retailer calculates that e-commerce accounted for 9.7% of non-adjusted total retail sales during the quarter, up from 8.5% in 2010.

The full-year and quarterly estimates from the Commerce Department are higher than those released earlier this month by comScore Inc. The web measurement firm reported total e-commerce sales increased 13% during 2011 to reach $161.5 billion, and 14% during the fourth quarter to reach $49.7 billion. ComScore draws on online purchase data from its panel of about 1 million U.S. online shoppers. Commerce Department estimates are based on a quarterly survey of more than 11,000 U.S. merchants.