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Comment: Online sales are up, but are retailers making the most of it?

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Recent IMRG figures show that more people than ever are spending online, with online sales rising 17 per cent year-on-year in June. A hugely positive sign for the sector, this growth indicates a considerable shift in consumers’ confidence in online shopping.

However, retailers are still facing difficulties with the different challenges that online throws their way. Despite shoppers turning to the internet, the retail world is yet to deliver what customers expect in the digital age and capitalise on the potential that online brings.

Only recently we saw the likes of BHS and Austin Reed closing their high street stores. The high street is changing, and fast. With a similar fate looming over other retailers, it’s inevitable this will put pressure on selling better online. But retailers must see this as an opportunity  not a threat.

Looking at even the top retailers in the UK, it’s clear that there are some fundamental challenges they’re still facing in delivering a stronger and more enjoyable online experience. But by persevering and looking at how they can be overcome, the potential gain that will result is well worth it.

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One aspect that continues to plague retailers is site speeds, particularly for the product pages, which slow down the customer’s journey to purchase. Another area of frustration for consumers is a lack of guest checkout – a result of retailers prioritising customer data over customer experience. Similarly, product imagery can often be limiting with only one or two images available in a poor quality.

For many retailers, these simple yet crucial aspects all make it less likely a customer will buy from you. These key issues form barriers for customers shopping online and the risks are high. Each barrier gives customers a reason to leave and look elsewhere. Failing to realise, and more importantly address these challenges and the impact they have on the customer’s likelihood to buy, potentially weakens the businesses’ bottom line.

As well as this, online marketing budgets must be set in a more sophisticated way. At the core of great customer planning is budget allocation, knowing how much to spend on your online marketing and when, for maximum business impact. Above the line advertising is still getting a huge amount of investment but retailers need to be spending more money online. Without effective and efficient measurement techniques retailers are missing out on valuable sales.

A great example of where a company has realised the importance of online is Carpetright, which previously relied heavily on its physical presence. Carpetright is Europe’s largest flooring retailer, with over 500 physical stores, and has significantly invested on its online experience to broaden its business. It has focused on creating content to inspire its customers, and the online user experience across desktop, mobile and tablet to ensure customers are well served no matter how they interact with the brand. In addition, digital marketing now has a much greater share of its overall marketing budget, resulting in growth that outstrips the market. This is a retailer that is investing in the right places, and as a result hit over one million in weekly online sales in 2015 and is continuing to grow.

The increase we see in the June IMRG figures is great news for the online retail industry – the potential is huge. If these issues are addressed we could see a rise more like 37 per cent next time around. There’s a lot to play for.

Hedley Aylott is the CEO and co-founder of online retail specialist Summit

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Published on Friday 29 July by Hedley Aylott, Summit CEO And Co-Founder

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