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Paul Hudson
Paul Hudson CEO of Intersperience
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Online retail wins, but still fails to deliver

The flurry of retail Christmas trading statements is over. And without a doubt the winners were online retail. This year, online retail scored a bigger and more significant win than ever before – average spend per online shopper was up by a massive £25 per head, a 15% increase from 2010. By contrast, high street shoppers spent on average £13 less than in 2010. So online retail was clear winners.

However, on closer inspection, our research (conducted through our syndicated online research community, TrendSpot) shows that online retailers are not taking full advantage of their position and sales could and should have been higher.

1 in 2 online shoppers experienced some form a problem or difficulty with their online shopping. Some 26% noted stock shortages and 25% had a delay with delivery. More alarming still was the 9% who didn’t receive at least one gift in time for Christmas day. This figure is half what it was last year, when twice as many didn’t a present in time for the big day – the snow obviously had a big impact – but nearly 1 in 10 is quite a large chunk of your customers being frustrated.

And annoyed, they were……

“So, no Christmas present for my son, who goes without! A very frustrating experience! This has made me more wary of using unknown websites”

“Next year I will think again before ordering online”

“The experience has meant that I will never shop online with them again”

“Won't buy this type of gift online anymore”

“I was annoyed and frustrated, so had to then give up and went into town instead”

“…go elsewhere and got a different one. I would though be more cautious of ordering from Tesco as this kind of thing should not happen to a website/company as big as this, especially with no proper form of apology”

These problems do take their toll. After last year’s severe problems, 9% of shoppers were put off spending their money online this year. That’s right – the proportion of UK shoppers who actually shopped online fell this year for the first time. Despite the headline growth in sales, it appears fewer shoppers parted with their money through websites. The traffic to sites was up, the use of the web to search out bargains was up – but 9% chose not to spend online after last year. This wasn’t a freak occurrence; we and other organisations predicted it before Christmas .

Perhaps most startling was the impact on under 25s – 44% of under 25s who didn’t shop online cited worries about delivery as their reason for not buying online. The figure was half that for over 25s.

As online retail matures, these things will matter more. As with any other business, service, dissatisfaction, trust and word of mouth are the things that drive customers to your business or away from it. In the words of one customer, “…how they handle your concerns and complaints when things go wrong is really important for online customer loyalty”

Online will continue to grow without a doubt; as the headline sales figures demonstrate, there is a big appetite for its convenience amongst UK shoppers. As the press focuses on what impact this has on our high streets, where the bloodbath is likely to be severe, individual online retailers need to improve if they are going to survive in the long term.

Behind the headlines lurks a creeping distrust and dissatisfaction.

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