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Why is the UK leading the EU in ecommerce - and what does that tell us?

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23rd Nov 2015
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The UK was the top performing territory in the EU for ecommerce in 2014, according to a recent report from the Office of National Statistics. Online purchases increased in the UK by 44% since 2005, with 79% of British people purchasing goods online in 2014, the highest proportion in the EU.

However, many European online retailers don’t have it so good. Only 10% of Romanians and 22% of Italians made online orders, while Scandinavian countries provide stiff competition for the UK, with up to 78% of shoppers buying online. With Black Friday 2015 predicted to be the UK’s first ever £1bn shopping day, it’s safe to say that there are parts of Europe that could learn from the UK’s success.

So, what are UK businesses doing differently?

Primarily, many UK retailers have been smart, investing in optimisation and re-engagement strategies at each point in the sales funnel and hiring the right people to implement these new technologies. According to a Barclay’s research report, it is expected that companies will collectively increase business technology spend to $2.1tn for business technology by 2016, which is a 6.7% uplift from 2014.

With this, UK businesses have woken up to the need to implement online mechanisms to turn traffic into conversions and boost sales, by understanding the behaviour (and value) of the user and adopting new technologies to address this. For example, a key consideration for any retailer should be looking at abandonment rates. Simply put, the more abandonments you can prevent, the lower your cost per conversion will be.

Re-engagement is key

No matter how streamlined your on-site check-out systems are, you will find that a significant portion of your prospects will naturally drop out of your sales funnel. There can be any number of reasons for this, and often it is the case that consumers never intended to buy in that session in the first place. In these situations, email re-engagement represents a huge opportunity for retailers, to recover users that would otherwise be considered lost.

Within this, businesses can tailor each message to the specific opportunity - by leveraging their existing customer data, recipient lists can be neatly segmented for relevancy. In addition, the content of the email can be targeted to each of these prospects and email deliveries can be timed so as not to bombard the customer with too many calls to action. Done right, email re-engagement can bring a significant boost to your bottom line. Econsultancy figures have shown that email is the best digital channel for ROI and re-engagement is a key factor within this.

After the checkout

Ecommerce businesses are nothing without their delivery methods. Throughout 2015 many UK retailers have started to offer a more diverse range of delivery options, whether that be heavy discounts, free on certain days, or click and collect. Argos in particular is acting aggressively, moving to rival Amazon in offering same-day delivery to all online shoppers. The more options you give your consumers the more successful your ecommerce efforts will be. Consumers like to feel in control, and if you give them that, they will return.

Greater transparency

Nothing turns a customer off more than being surprised by booking fees, delivery charges, taxes and other hidden fees right at the end of the checkout process. You’ve put all that effort into converting them, only to lose them at the final hurdle. ICM Research reveals that one in four UK customers will abandon their purchase at the checkout with key complaints if the site’s asking for too much information, forced account registration and not trusting that the website is secure.

UK retailers have adapted to this by understanding the behaviour and psychology of the average consumer. For example, a progress bar is generally easy for developers to implement and helps consumers understand where they are in the process.

The rise of the mobile shopper

In the coming years, being top for ecommerce in Europe will not be enough to keep British businesses ahead of the pack. The astounding growth of mobile commerce (or mcommerce) means that retailers must optimise their sites for mobile.

Indeed, international research conducted by RetailMeNot found that UK shoppers are set to spend £14.95 billion via mobile devices in 2015, an increase of 77.8% on £8.41 billion over the same period in 2014, while PC spending is expected to grow by only 2%.  John Lewis announced similar results, with their annual ‘How we Shop, Live and Look’ retail report, which states that mcommerce revenues rose for the group by an impressive 68% in the last 12 months.

Mobile is a platform that needs to be taken seriously: the form factor of today’s phones means that if a site isn’t optimised it’s often incredibly difficult to use. Retailers should react to consumers’ changing shopping habits accordingly, while continuing to integrate technologies which help optimise the on-site journey.

So how can UK ecommerce stay at the top?

By continuing to look at all aspects of their business, customer journey and lifecycles, they can make use of every opportunity to convert users. However, ultimately it is up to retailers to determine their success through adapting, innovation and investment in core business technologies.

Tom Weeks is director of retail at Ve

This article originally appeared on MyCustomer sister site BusinessZone.co.uk

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