Of the top 100 internet retailers of 2009, only 44 of them had a blog and just 36 posted on a frequent basis. Some of the names on this list are public companies. Investors rightly should expect retailers to do everything in their power to drive traffic to their online stores including the use of blogging. It's a critical piece of the e-commerce puzzle and many companies still are dropping the ball. If Wal-Mart (NYSE:WMT) is doing it, why isn't everybody else?

IN PICTURES: Learn To Invest In 10 Steps

Setting The Pace
Amazon.com (NYSE:AMZN) is without question the leader in online retail. Over the past 10 years, it has grown revenues from $2.8 billion to $24.5 billion and operating income from a loss of $863.9 million to a profit of $1.1 billion. It authors thirteen blogs if you count Zappos.com (acquired in late 2009) among them. If Jeff Bezos and company see the benefits, everyone should. Ignoring his lead is like a musician not listening to the musical advice of Sir Paul McCartney. It's just plain dumb.

Educating and informing customers while also receiving feedback is a critical component of the shopping experience. Avoiding its use isn't business suicide, but Amazon's prolific use of the medium is proof it works.

Winners
Two companies doing a good job of growing online sales are Kohl's (NYSE:KSS) and Gap (NYSE:GPS). Although both currently generate less than 10% of overall revenues from e-commerce, they are delivering double-digit sales increases on a quarterly basis. In terms of blogging, Gap operates two, one for each of its Athleta and Piperlime brands. Kohl's doesn't blog but it does make use of Twitter and Facebook quite well. Using this type of social media is great but blogging in my opinion still delivers the most information in the best possible format.

Quiksilver (NYSE:ZQK), a company that has struggled in recent years due to an ill-timed acquisition, does a great job marrying its blog with an online shop, all the while recognizing the importance of not pushing sales at the expense of its wholesale customers. It's a difficult balance for those companies doing both. Ralph Lauren (NYSE:RL) struggles with the same issue but also does a nice job online reflecting its lifestyle while not overtly pushing sales.

And Losers
Retailers that don't use blogs and instead tie their marketing horse to Twitter and Facebook exclusively make an error in judgment. While these two forms of social media have a place in viral marketing, there's clearly a lot of discussion around the downstream traffic Twitter sends to online stores. Hitwise did research in 2009 that shows only 9.5% of Twitter's downstream traffic goes to transactional websites such as online retailers while Google U.K. sends over 30%.

Blogs done well are certainly an important part of ranking higher on most search engines including the world's largest. Unfortunately, it seems as though a majority of businesses including Buckle (NYSE:BKE), my favorite retailer, are missing the boat despite evidence blogs do work.

The Bottom Line
For those consumers who hate to shop, the retail information available online has a huge impact on the decisions of what and where to buy. Maintaining a useful blog makes a huge difference to consumers, and it's worth considering when choosing retail investments as well. (For more, see Choosing The Winners In The Click-And-Mortar Game.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  2. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  3. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  4. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  5. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  6. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  7. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  8. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  9. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  10. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
RELATED FAQS
  1. How is cash flow affected by Average Collection Period?

    Many modern businesses offer their customers the option to sell on credit. A "buy now, pay later" model should theoretically ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center