UK consumers are forecast to spend £10.8 billion with online retailers in December this year,with the average conversion rate across all devices to hit a 5-year high of 5% during the fourth
quarter of 2013, according to the latest analysis on the IMRG Capgemini e-Retail Sales Index. Butdelivery costs remain a hurdle for online shopping, a separate survey showed.The British e-commerce association IMRG said it is the first time the e-Retail Index will havesurpassed the £10 billion mark in December. During the final nine weeks of the year in the peakChristmas period, online shoppers in the UK are expected to spend a total of £20.4 billion.
Talking about growth for the whole of 2013, Tina Spooner, Chief Information Officer at IMRG,said: “For the first time in 3 years, we expect annual e-retail growth to exceed the level recordedin the previous year, with 2013 sales on target to achieve 15% growth on last year. The increase inthe number of browsers that convert to buyers is also positive news for retailers as they gear upfor the key festive trading period, with the average conversion rate expected to reachpre-recession levels during the fourth quarter.”
The anticipated conversion rate of 5% for the last three months of this year follows threesuccessive quarters of increased conversion rates compared with the same periods in 2012. While itwas 0.2% up during the first quarter of 2013, the increase went up to 0.6% during the secondquarter and reached 0.7% during the third quarter.
IMRG estimates that Monday December 2 will be the busiest day of the year in terms of sales,although the peak days may vary by retailer. According to IMRG’s survey of around 50 retailersconducted last month, the majority of the respondents expect the week starting 9th December to betheir peak week.
“Already we are seeing a number of retailers ramping up their online offering in the run up toChristmas. Click & Collect, next day delivery and even one-hour delivery slots are just a fewof the options on offer to attract the lucrative festive shopper at this highly competitive time ofyear,” Spooner added.
Chris Webster, Head of Retail Consulting and Technology at Capgemini, highlighted the greatimpact of mobile devices on online shopping this year. “This forecast is in direct response to theoverwhelming growth we have seen in sales via tablets and smartphones over the last few years. Thehuge strides in technology and the improved mobile services from retailers, such as digitalwallets, mobile coupons and location based services, have all played a major role in driving growththrough these channels. Improved mobile sites have made shopping on the move much easier, so we arealso seeing an increase in click & collect services.”
However, despite strong e-commerce growth and great expectations for this year, the percentageof online shoppers abandoning their baskets in the past year before completing the purchase remainshigh with 77%, the latest eCustomerServiceIndex (eCSI) results from eDigitalResearch and IMRGrevealed. The estimated annual loss of revenue to UK online retailers due to checkout abandonmentis expected to reach £6bn in 2013.
As the main reason for basket abandonment, over half (53%) of the 2,000 consumers surveyed nameddelivery costs that they considered being too high, suggesting that many were only made aware ofthe delivery prices once they reached the payment stage. Almost three quarters (65%) of those whoabandoned at the checkout because of high delivery costs kept researching online to see if similarproducts were available elsewhere from another retailer. This shows the impact that deliveryconcerns can have on customer loyalty, IMRG explained. Only 8% returned to the store that offeredexpensive delivery to make the purchase while 1 in 5 shoppers (20%) made no purchasewhatsoever.
Derek Eccleston, Commercial Director at eDigitalResearch, commented: “Delivery has long been akey part of the customer journey that online shoppers feel that retailers must improve. Investmentin better parcel tracking, timed delivery slots and other innovations has gone some way toimproving customer satisfaction with overall customer experience, but these results clearly showthat issues surrounding delivery are still a massive barrier to purchase for a large chunk ofonline shoppers.”
Claiming that the majority of shoppers would prefer to pay not more than £5 for home delivery ofsmall or medium sized goods, he urged retailers to improve their delivery experience to encourageshoppers to spend more, especially in view of the Christmas shopping boom this year.
