New research conducted by Verdict Consulting on behalf of Webloyalty reveals ten online retailing trends for the 2010s and the most important actions online retailers should take to grow their business post-recession.
The report, 'Internet Retail Trends 2010: Ten Actions For Your Business', states that despite growing by 13.3% in 2009, internet retail has been significantly impacted by the recession — costing internet retailers an estimated £1.6bn in lost revenues that would otherwise have been gained had the economy not fallen.
"The recession has certainly caused online shoppers to alter their purchasing habits and online retailers are now also facing a severe slowdown in new customers," says Verdict's Neil Saunders. "Our report suggests that retailers must turn their attention to driving repeat business — shifting marketing spend away from attracting new customers and instead focussing it on adding value for their existing customer base. Those retailers that try to win on price alone will be left behind but those that clearly offer extra value, and communicate it upfront to the customer will be ahead of the game."
"These are the major things that we believe all retailers must consider when setting out their online strategy for 2010 and beyond," continues Saunders:
- Growth will be more difficult — The channel is slowly maturing and with many of the easy wins now maximised, further progress will be much slower. Retailers need to think more strategically about maximising revenue online
- The recession has impacted — A critical lesson for the online channel will be to add value and persuade customers to trade up in what they buy
- Acquiring new customers will be tougher — As customer acquisition becomes more challenging, retailers should switch more marketing budget to maintaining existing customers and driving repeat business
- There will be more mouths to feed — Deep knowledge of your competitors' online offerings coupled with sophisticated testing of different customer acquisition strategies will be crucial to stay ahead of the market
- Expectations will rise — Retailers must focus on adding more value than they have done in the past. They must clearly communicate why customers should shop with them, and what extra benefits can be gained from doing so
- Loyalty can be increased — Those retailers that offer a combination of one-off tactical deals to excite the customer, combined with long-term strategic programmes with extra value benefits to lock in customers, will have a winning strategy
- Conversion will be key — Website personalisation is a key way in which conversion can be grown. If 'cherry-picked' products are pushed through to relevant customers when they visit a website they are far more likely to see a product which appeals to them, and therefore make a purchase
- Basket abandonment is here to stay — Providing clear, accurate and detailed information on products, prices and additional charges is a key way to reduce basket abandonment
- Customers will be channel blind — Those retailers that offer multiple consumer touch points will see benefits; though branding must be consistent across all channels
- It's more than about selling — To boost revenue, retailers should consider monetising their web pages by linking with third parties that offer products and services that suit their target market
"With the internet retailing market becoming more mature and shoppers savvier, there is a demand for more sophisticated strategies," explains Martin Child, managing director of Webloyalty Europe. "Webloyalty works with internet retailers to monetise their websites by generating incremental revenue and driving repeat business. Programmes such as ours bring something valuable to the online high street."
Readers can download the complete report free of charge
from Webloyalty's website.