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Segmentation/personalization, inventory assortments and data/analytics were cited as the top three concerns this year for online merchants seeking to improve conversions and return on investment, according to a survey from the E-Tailing Group.

Overall, the survey found that driving the right traffic to the site, increasing sales and fostering retention all require more targeted tactics enabled via more sophisticated analytics and data mining.

Regarding analytics, the survey revealed that marketers need the right data on a timely schedule, formatted for usability and sufficiently skilled staff to interpret the information. But it also showed that 80% of merchants devoted 20 or fewer hours per week to this task.

In terms of merchandising, the survey showed that respondents "are using everything in their arsenal" to meet customer expectations, including rich media and customization. .

The survey also found respondents increased the percentage of their online sales budget designated for marketing to 29% from 27% last year.

In addition, the poll found that e-mail continues to play an important role because of its low cost and that segmentation and personalization are at long last emerging as key steps to improve e-mail's performance.

The survey polled 167 online merchants during the first quarter.