You snooze, you lose, experts warn e-commerce firms

Consumers are doing more product research online before making purchases

At a time when most businesses are looking to just survive the economic downturn, online shopping has remained one of the few areas of growth in a struggling UK retail industry.

So those pureplay 'e-tailers' that operate exclusively online, as well as those that have a transactional web presence as part of a multichannel model, must perform a delicate balancing act. They must invest in the latest technologies to attract, retain and grow online custom while, at the same time, maintaining tight control over costs.

E-commerce technology experts gathered this month to discuss whether now is the right time for retailers to consider updating their platforms to better meet their long-term goals.

“To use a turn of phrase: a web site is not just for Christmas, it’s for life,” said Chris Russell, director of e-commerce market intelligence firm eDigitalResearch. He said that to ensure their long-term success, e-commerce sites must become part of the consumer’s lifestyle by enabling them to find more of what they want.

“The technology and suppliers are catching up with what consumers want. But the irony is that consumers often don’t know what’s possible online until they find it,” he said.

Russell added that the consumer expects a seamless, personalised experience, which could be an issue for more traditional retailers whose e-commerce web sites are often separate from the legacy operational systems that feed them.

Matthew Tod, chief executive of digital optimisation consultancy Logan Tod & Co, said younger consumers are highly adept at researching potential purchases using a variety of channels, and that retailers needed to respond to this.

“They may use price comparison web sites to find the best deal, visit a number of retailers’ web sites to research a potential purchase, physically visit a store to touch and feel the product before they buy, and even check social networking sites, blogs and Twitter for real user feedback – all before buying through any one of the channels they’ve used,” said Tod.

He added that as the recession continues to bite, this kind of pre-purchase research would get far more prevalent.

“Consumers have much higher expectations of what they want, as well as when and where they get it,” Tod continued. “The problem comes with the fact that, although e-commerce is smaller, faster and hungrier than other sales channels, it’s the place where retailers are being driven by their sales figures and customers to invest more.”