YES – But 2009 is no time for complacency
By Steve Davis, President International of GSI Commerce.
Perhaps one of the reasons for deceleration in the growth for online sales is the fact UK retailers are simply not using some of the tactics, unique to the online market place, that their American cousins have so successfully implemented.
The fact that online-only retailers, such as Play.com, are recording successes over the Christmas period, while excellent news for them, is actually indicative of the wider failure of the established high street retailers online. It’s 2009 and, unbelievably, some major brand retailers such as Primark and H&M have not even developed a transactional web presence. Crucially, however, these retailers don’t realise that not only are they losing revenue from potential online transactions but that they are seriously inhibiting their high street sales.
Put simply, the areas that are lacking in the UK can be grouped into three broad areas:
Genuine multichannel
The same old sound bite but still it’s not happening. For years, UK retailers have been waxing lyrical on the merits of genuine integration but, beyond the marketing puff, very few are actually doing it. How many UK retailers can you think of that have integrated to the extent that they can offer buy online, pick-up in-store? This capability actually gives high-street retailers the opportunity to best their online-only competitors and yet we’re still not seeing it.
Rather than waiting three days for delivery, this gives the customer the opportunity to walk to the high street and pick it up on the same day. If the product’s not available in a local store at the time of transaction, there should be the option to ship it to the store within a few days.This capability gives high-street retailers the opportunity to best their online-only competitors. Picture the scenario, if you’re desperate to buy a last minute gift and if you had the option to walk down the road and collect your pre-paid DVD at an HMV store, you’re surely more likely to do that than waiting three days for Play.com to deliver.
The on/offline relationship
Most UK retailers seem to be of the view that it’s perfectly acceptable to not place their entire product range online. It’s not. GSI research shows that between 25-60% of high-street sales are researched online before store purchase. If you have no site, you provide consumers with no means of researching your products and are missing out a major driver of high-street sales. An online store should not be a retailer’s biggest store first and marketing platform second – it is the biggest marketing vehicle that a retailer has. Where else can brands engage with millions of customers in a 10-15 minute dialogue every day?
In the same way that UK retailers will have to learn to use their high street assets to charge their online growth, they need to recognise that the reverse is also true.
Technology investment
Not really a tactic as much as a reality. In spite of everything the technology landscape continues and will continue to get more sophisticated. To stay ahead of their competitors retailers are forced ensure that their ecommerce technology is current – not necessarily an easy task in the current climate but the alternative of losing market share is hardly preferable. To weather the economic storm, UK retailers are going to have to find the means of minimising or eliminating the risk that attached to these essential investments.
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Showing posts with label online retail. Show all posts
Showing posts with label online retail. Show all posts
Thursday, 29 January 2009
Part 2 - Will online retail escape the worst effects of the credit crunch hitting the high street?
NO - Just being online is not enough
By Trenton Moss, Director, Webcredible.
The outlook seems bleak for the high street in 2009. A victim of the seemingly unstoppable economic downturn, the dip in sales has accounted for the catastrophic troubles of established names such as Woolworths and Zavvi. There were 9.7 per cent fewer shoppers on the high street on 1 January 2009 compared to one year previous, according to figures from Experian.
Online retail on the other hand still seems to be booming. According to Nielsen Online, the ten biggest online shopping sites enjoyed a 37 per cent increase in visitors on average in the final three months of 2008, compared to the year before. In addition, IMRG’s Capgemini e-Retail Sales Index for December 2008 reports a 16.2 per cent year-on-year growth in online sales.
Taking these statistics into account, many would say that of course online retail will escape the worst effects of the credit crunch. But the answer is much more complex than that, and the immunity assumed by online retail will prove a myth for some!
That is a bold statement, so let me explain. There is no doubt that online shopping is totally outdoing the high street, and that having a successful online channel will probably shield you from the worst effects of the credit crunch. The point is that many retailers still feel that simply by being online and having a website to sell goods they are doing enough to save themselves. Unfortunately, just being there is not enough.
The rise of online shopping is certainly no secret, hence the market is a lot more competitive than the high street. The online retail market is an environment where consumers are exposed to such vast choice, are increasingly web-savvy and determined to find the best deals. A website that is well optimised for search engines is crucial to you being found by consumers, then there are sponsored links, affiliate networks, social media and numerous other online marketing channels that you need to use properly to attract visitors to your website.
However, in today’s online world you can do all this effectively and it could still prove insufficient if your website is difficult to use. The fact is, if a user finds it too hard to do something on your site, they will just visit one of your competitors to do it, and these drop-offs can be costly for any retailer. Many people say that the online only retailers will not suffer anything like the high street retailers. This is probably true, but companies like Amazon have put a massive amount of time and money into making their sites as usable as possible ever since their inception.
The bottom line is that retailers who put the necessary time, effort and money into making their websites as usable, optimised and well marketed as possible may well not suffer the worst effects of the credit crunch. But those who do not the make user experience a priority will see themselves lose out to the competition in the online market just as they have done in the high street, and this presumed online immunity will give way to the worst symptoms of the credit crunch.
Read more!
By Trenton Moss, Director, Webcredible.
The outlook seems bleak for the high street in 2009. A victim of the seemingly unstoppable economic downturn, the dip in sales has accounted for the catastrophic troubles of established names such as Woolworths and Zavvi. There were 9.7 per cent fewer shoppers on the high street on 1 January 2009 compared to one year previous, according to figures from Experian.
Online retail on the other hand still seems to be booming. According to Nielsen Online, the ten biggest online shopping sites enjoyed a 37 per cent increase in visitors on average in the final three months of 2008, compared to the year before. In addition, IMRG’s Capgemini e-Retail Sales Index for December 2008 reports a 16.2 per cent year-on-year growth in online sales.
Taking these statistics into account, many would say that of course online retail will escape the worst effects of the credit crunch. But the answer is much more complex than that, and the immunity assumed by online retail will prove a myth for some!
That is a bold statement, so let me explain. There is no doubt that online shopping is totally outdoing the high street, and that having a successful online channel will probably shield you from the worst effects of the credit crunch. The point is that many retailers still feel that simply by being online and having a website to sell goods they are doing enough to save themselves. Unfortunately, just being there is not enough.
The rise of online shopping is certainly no secret, hence the market is a lot more competitive than the high street. The online retail market is an environment where consumers are exposed to such vast choice, are increasingly web-savvy and determined to find the best deals. A website that is well optimised for search engines is crucial to you being found by consumers, then there are sponsored links, affiliate networks, social media and numerous other online marketing channels that you need to use properly to attract visitors to your website.
However, in today’s online world you can do all this effectively and it could still prove insufficient if your website is difficult to use. The fact is, if a user finds it too hard to do something on your site, they will just visit one of your competitors to do it, and these drop-offs can be costly for any retailer. Many people say that the online only retailers will not suffer anything like the high street retailers. This is probably true, but companies like Amazon have put a massive amount of time and money into making their sites as usable as possible ever since their inception.
The bottom line is that retailers who put the necessary time, effort and money into making their websites as usable, optimised and well marketed as possible may well not suffer the worst effects of the credit crunch. But those who do not the make user experience a priority will see themselves lose out to the competition in the online market just as they have done in the high street, and this presumed online immunity will give way to the worst symptoms of the credit crunch.
Read more!
Good month for...
Twitter – January may be the month the micro-blogging platform hit the mainstream with it securing a 10-fold increase in users over past last 12 months, it spawning a global charity event and to top it all off securing its very own plug on Jonathan Ross thanks to Stephen Fry
Online Retail - IMRG’s Capgemini e-Retail Sales Index for December 2008 reports a 16.2 per cent year-on-year growth in online sales
Fallon – Their new advertising campaign for Cadbury's has all the infectously viral qualities of previous campaigns but will it be more popular than that Gorilla?
Read more!
Online Retail - IMRG’s Capgemini e-Retail Sales Index for December 2008 reports a 16.2 per cent year-on-year growth in online sales
Fallon – Their new advertising campaign for Cadbury's has all the infectously viral qualities of previous campaigns but will it be more popular than that Gorilla?
Read more!
Bad month for...
Empire Direct – The UK Electricals retailer fell into administration after a poor Christmas for most stores selling televisions and washing machines was aggravated by the loss of credit insurance. The news highlighted the difficulties many previously pure online stores face as they make their way onto the high street.
Read more!
Read more!
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