Affiliate marketing is set to substantially boost online retail sales during 2010, a new report has suggested.
The retail sector has suffered in the wake of the recession, with many businesses rethinking their marketing strategies in order to reduce costs. As a result, there has been an increased uptake in affiliate marketing as companies embrace its cost effective potential.
According to the Affiliate Marketing Buyer’s Guide 2010 by Econsultancy, the sector will be responsible for an estimated £four.62 billion in UK online retail sales this year, which represents around 8 per cent of all online sales.
The findings indicate that the sector was worth £4.13 billion last year, with around £245 million paid in commissions and fees to affiliates and networks. It is thought that such a trend will continue, with 12 per cent growth across the affiliate sector expected in 2010.
Econsultancy’s Research Manager Aliya Zaidi said: “Econsultancy strongly believes that the sector will continue to add value to the customer journey and drive significant sales for companies which they wouldn’t have otherwise made.
“The harsh economic climate has caused problems for the sector but it has also benefited from a shift in marketing emphasis to performance-based marketing and online channels.
"There is also increased consumer demand for bargains, coupled with the growing trend towards researching purchases online. Increased consumer thriftiness has meant opportunities for affiliates offering deals, discounts and voucher codes.”
As businesses modify their marketing strategies in line with the current economy, it has been noted that the advertising technique known as ‘group buying’ is also gaining in popularity.
Group buying messages tend to advertise 1 deal from one company through a website, email or social media, and allow businesses to reach thousands of potential customers within a 24 hour period.
Tool Briffett, Managing Director, LivingSocial UK & Ireland, explained that businesses can easily reach a big number of customers with this technique, as such sites have thousands of subscribers interested in the daily deals which commonly offer anywhere between 50-90 per cent off a treatment or service.
“Group buying sites deliver a platform that allows for the fast and widespread reach of word-of-mouth for local businesses,” he said.
“The results generated on daily deal sites are instant and carry no risk. Merchants pay nothing to promote their business and pay only for each deal sold.” 
