Ecommerce or die - your choice
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20 February 2009
Posted in
Blog
According to a new report from Tenon Recovery, a turnaround, restructuring, recovery and insolvency specialist, retailers who do not provide an online sales option to their customers are going to lose out on their business, as more shoppers are preferring e-commerce to high street shopping.
Businesses which do not invest in e-commerce are 30% more likely to fail, says Tenon. Online retail sales in the UK rose from £46.6 billion in 2007 to £53.2 billion in 2008.
The rise in online sales was simultaneously marked by the closure of several high street stores. According to Tenon, the high street casualties are increasing as the businesses are investing more in brick and mortar buildings but not in e-commerce sites.
Key findings in another report are that the number of retailers with ecommerce sites has risen to over 35%, from 11% in 2006 - confirming trends reported by bodies such as the IMRG. Of those that don’t have an ecommerce site 22% claim they have firm plans to launch one.
This mirrors what we at Wintercorn are experiencing. Clients who don't have an ecommerce function are quickly building one and the clients who do, are expanding. It's the most cost effective method of retailing. Several clients have the advantage of a huge and fanatical user base, so adding a shop has been relatively pain-free. Even if you sell milk. (Bring back Humphrey!)
Other clients have had to start from the beginning and we have advised them on technology, strategy, marketing, statistical analysis and day-to-day management.
Most companies though would be hard pressed to beat the results from a new company called Twenga (I know, another Web2.0 name. I thought they'd all died out.) who claim a whopping 500% increase in revenues from 2007. And this from selling other peoples stuff.
On the other side of the coin is usability. New research into e-commerce web sites has found that only around half of users were able to complete simple usability tasks set for them, highlighting that online retailers still have work to do to make their sites easier to use.
The research, conducted by usability agency Yuseo and research firm Ciao Surveys, tested over 3,600 users across the UK, France and Germany using 14 different sites, including Amazon, Play.com and Littlewoods.
Big names indeed. So some sites spend a lot of money on ecommerce simply to fall at the first hurdle. It's like having a shop with a sticky door.
It's clear which ever way you look at it though. Ecommerce is the way forward in the good times and the only way forward in the bad times.
The only question is - are you ready for it?
