Member News: ONLINE RETAIL IN THE CURRENT ECONOMY by Kathy Heslop, Director of Communications at Ve Interactive Ltd
Article Date: 4th Feb 2010
The credit crunch has accelerated and energised the growth of online retail activity. E-retailers are not only capitalising on the access that the internet gives them to the wider domestic, let alone global marketplace, but also the culture switch that has now embedded digital shopping into everyday life. As of June 2009, approximately 1.67 billion people worldwide were using the internet, (Miniwatts Marketing Group). Indeed research, carried out by accountancy firm Deloitte, claims that the online retail market, (worth £9bn in the UK back in 2005), will leap to £25bn by 2010, as more consumers switch to the convenience of online purchasing. Deloitte also found that 46% of people buy more products online now compared to a year ago.
Inspired by the fact that online retailing is continuing to rise at a much faster pace than the overall retail market, (uSwitch, the impartial online comparison service, is predicting that online retail will account for 40% of UK retail sales alone by 2020) and conscious of the economic downturn, many e-retailers are concentrating their efforts on online customer acquisition and retention. A key focus being developing effective and ergonomic ecommerce sites and superior customer e-retail experiences.
Along with site optimisation, the other current focus of web and marketing teams is to measure sale conversions, using analytics to gain critical metrics for understanding their websites’ transactional performances. However according to PMP, (who provide a range of services for those responsible for purchasing, advising on or marketing IT), and who surveyed a cross section of leading organisations for their opinions on the use of web analytics, there is substantial room for improvement in most organisations in acquiring knowledge and understanding of their web site visitors, with 42% of online companies saying that they had poor or low level of knowledge of their customers’ behavioural merchandising. This information can also only be generated by completed sales.
And more neglected still is the 800lb gorilla of ‘abandonment’ on sites. Critical metrics and the data of aborted customers, (who could well just be having problems navigating unfriendly shopping carts, or have been distracted mid transaction) are completely lost, and that customer lead vanishes upon that abandonment. However if this data is already captured in spite of the abandonment, a subsequent timely email nudge, or some friendly personal contact from the e-retailer could potentially convert these visitors into sales.
It’s big business too. The loss of potential online revenues caused by abandonment has been independently identified as one of the biggest problems that website owners face, since average abandonment rates across the web are currently at 65% of all commenced transactions. When you consider that The Telegraph described Monday December 7, 2009 (Cyber Monday), as the ‘busiest online shopping day ever’ and that ‘between the hours of 1pm and 2pm alone, Brits spent a combined total of £33 million, a year-on-year increase of 21 per cent,’ the calculation of approximate lost potential revenues through abandonment is staggering.
It is the behemoth of these lost revenues that VeCapture helps to address. Forrester Research has found that after a transactional abandonment has taken place, a combination of two sensitive follow up emails achieves an impressive 46% conversion of those customers. VeCapture software provides the perfect solution for this, allowing web site owners and administrators to generate code that is easily integrated into their sites and which will retain the customer data entered regardless of abandonment. This means that the e-retailer can then re-initiate contact. By following up with the lost customer immediately or soon after the abandonment has taken place, the e-retailer can then engage in helpful customer service dialogue and/or remarket their products, possibly by even offering them a promotion or free shipping. This has the added benefit of personalising the transaction and building greater consumer trust in the online brand.
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