13/9/06
This year, we are each predicted to spend £1,000 on goods and services online, says the IMRG Senate. Some £26 billion will be spent in webstores by the end of the year, resulting in 540 million parcels. Further, for every pound spent online, the web will influence the spend of another pound in-store. The catalogue remains a main driver for online sales with YouGov research commissioned by Axon Publishing concluding that 60 per cent of UK consumers are more likely to buy online if they see products in a printed catalogue first.
The aforementioned Axon research supports recent figures by Royal Mail showing that catalogues are enjoying a rebirth in the era of online shopping. It found that 60 per cent of retailers are now sending catalogues to customers to drive online sales - double the number of five years ago. The research also highlighted that catalogues play a significant role in driving the over 50s to the internet. Two-thirds of respondents aged 50+ agreed that they were more likely to buy online after viewing products in a catalogue. Seventy per cent said that even if a website is easy to shop from, they still like to look through catalogues at home. This suggests they prefer the design and creativity of print publications to online sites. The results also show a strong preference for catalogue shopping amongst ABC1 consumers, particularly females. Ellen Brush, publishing director at Axon publishing, stated, "While the internet is an increasingly popular method of home-shopping, this survey shows that sought-after consumers are still turning to catalogues for creative inspiration first."
Conversely, a number of recent surveys are disputing the convenience of websites, finding that online retailers are failing to deliver in terms of customer service. This failure to satisfy the needs of customers is leading to an outbreak of widespread "web rage". Research carried out by SciVisum found that 78 per cent of online shoppers complained that frustration with website performance has led them to switch off their PCs. One in three refuse to give even their favourite website more than a second chance, before trying the competition or turning back to the high street. Northerners were found to be most prone to "web rage" - but are also the biggest online spenders, buy the most extraordinary items, and are the most willing to buy cars and houses online. The most forgiving consumers live in the South, which also houses the most conservative shoppers and cautious spenders.
The most common cause of web rage among more than half of online shoppers ( 54 per cent) is the inability to ask questions by telephone. This is echoed by research by Transversal, which found that retail websites could only answer five out of ten most frequently asked questions. The length of time taken by retailers to reply to customer email was equally poor - with one online grocer taking a staggering 97 hours to get back to the researchers. However, a fast response isn't any good if replies do not actually answer customers' specific questions. Only 75 per cent of email replies from electronics, grocery and fashion companies successfully answered the question asked, said Transversal. Similarly, just 60 per cent of email replies from and book sellers provided a useful answer. "Despite the growth of online sales, retailers are still not providing good customer service on the web, and they simply wouldn't get away with it on the high street," commented Davin Yap, CEO, Transversal. "Given that they are providing tangible goods this should be straightforward, however our research has found the exact opposite. Retailers will drive shoppers into the arms of their competition through their failings."
Other irritations include the technical performance of specific user journeys, with just under half saying website crashes during a transaction are one of their biggest gripes. Usability issues also rank among the top contenders for causing web rage with complicated registration processes (47 per cent); the inability to find information (46 per cent) and amend orders (45 per cent) all being named as major annoyances.
"Web rage is a burgeoning online phenomenon," said Deri Jones, CEO, SciVisum. "With less than half of online shoppers prepared to give their favourite website more than two chances to get it right, the message to e-tailers is very clear. Online shoppers are showing zero tolerance to poor performance - and e-tailers must follow this lead if they're to avoid losing their customers to competitors or the high Street."
One explanation for this poor performance could be that marketers have yet to get to grips with the web and its intricacies. Recent research from Coremetrics found that online marketing is being let down by a lack of education. Almost three-quarters of marketers surveyed felt that traditional education methods did not prepare them for today's information-led organisations. In particular, over half wanted to improve their analysis and measurement skills, while 42 per cent wanted to strengthen their search engine marketing techniques. "In order to retain competitive edge, companies must make the most of online strategies, concentrating on precision marketing and making the most of targeted messages," said Joe Davis, CEO, Coremetrics. "Unless we bridge these critical skills gaps, corporate marketing techniques will remain fundamentally flawed," he concluded.
Online retail sales in Europe will more than double in the next five years, to £263 billion in 2011, according to Forrester Research, as the number of online shoppers grows to 174 million.With the UK heading the European league of online spenders and Forrester claiming UK consumers will outspend even their US counterparts online, retailers must get in shape to cope with increasing demands. The above research shows that whilst consumers are increasingly tuning to the web to shop for goods and services there's plenty more room for improvement.
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