As the online channel continues to account for an increasing share of all business, retailers continue to shift their focus. The web is no longer viewed as a mere marketing tool, used to drive shoppers to catalogues and stores. E-Commerce is becoming an important, stand-alone sales channel and websites are increasingly seen as revenue generators and important profit centers. Great stats.

According to the e-tailing group’s "5th Annual Merchant Survey," for many merchants online is growing at a faster rate than either catalog or store channels.

As a result, increasing the online share of revenue is something on which e-tailers are concentrating very hard. There is still much work to be done, conversion rates are definitely improving overall, but e-tailers still see conversions at a relatively low rate.

"Merchants are focused on analytics to understand and then hone in on what works in order to run more efficient and profitable businesses," said Lauren Freedman, president of the e-tailing group.

According to the e-tailing group’s survey, onsite merchandising is the top initiative planned to improve site performance for 75% of the merchants who responded in 2005, followed closely by more targeted e-mail marketing programs and improving onsite search.

When survey participants were asked to rank which merchandising features worked best online, traditional tactics continued to gain. Search maintained the top position, followed by sales & special offers, cross selling and e-mail.

On the downside, high shopping cart abandonment rates continue to plague e-tailers. Fully 30% of the merchants surveyed said it was an area that still needed substantial attention — and 37% of the merchants reported abandonement rates between 31% and 60%, which is a substantial loss of business.