Quite simply, online retail got it right this Christmas. This year, online shopping hit new records and transformed what could have been a poor retail period into a very successful one (The Telegraph, Online Sales Surge and Retail Week, Multichannel shopping comes of age this Christmas). It is easy to assume that this is just ‘part of the trend towards online’. And in part, that is correct. But it isn’t the whole story. This year, online retailers have pulled their socks up and got on and done a better job than ever before. Last year, online retail screwed up somewhat (see my blog 'Online wins but still fails to deliver', Jan 2012).

It is true, the headline figures in the last two years were good, but underneath the surface there were lots of missed opportunities. Last year, an astonishing 50% of people experienced a problem while shopping online and a quarter admitted they bought less online as a result. The year before, the figure was 68%, although the very bad weather undermined the retailers’ efforts by delaying deliveries.

Last year the problems were largely of the retailer’s own making with the majority of problems being stock shortages.

This year, only 13% had a problem with stock shortages and 20% with delivery problems. In addition, retailers got savvier in combining online and high street – John Lewis is a good example, with the flexibility of collection options. (Econsultancy recently analysed John Lewis’ performance).

The main reasons why online retail shone this Christmas are:

• Choice to collect in store
• Flexibility in delivery slots
• Free delivery options available
• The early start to online sales before shops (27% shopped online on Christmas Day)
• Better stocking levels

Most of these are improvements in the basic foundations of the service – just doing what they say they will. It’s not earth-shattering strategy. The need for a bargain also helped, with customers going online to search out the best prices and also taking advantage of online sales.

However, the challenges for retailers going forward are more strategic:

1. They must integrate stores and online much more – the same product offering, integrated customer service, similar pricing and critically, internal measurement that encourages joint working as opposed to two competing businesses (only John Lewis really leads the way here).
2. Integrate mobile. This is much harder. Very few retailers understand how consumers really use mobile for shopping – many still think it is a transactional route when the real benefit is integrating mobile into the in-store experience. This will harness the so-called ‘show-rooming’ trend.
3. Improve customer service. The demise of Comet emphasised the importance of this and the ‘show-rooming’ trend has further shown more improvement is needed. Staff need to be far better aware of online competition, availability, consumer reviews and maybe even have empowerment to change prices.
4. Improve store experience and layout. This is vital if high streets are to thrive. Data shows that people still recognise the benefits and convenience of stores – but the quality of the shopping experience and service is paramount to this benefit being realised.
5. More flexible open hours. Whilst shopping seems to be round the clock, high streets need to respond to later opening times to accommodate modern work pressures.

So the conclusion is a big ‘thumbs up’ to online retail for a job well done, a ‘must do better’ for the high street and a ‘still lots to do’ if retailers are to ensure their own survival.