Ten online retail trends for the next decade

The report, ‘Internet retail trends 2010: Ten actions for your business’, was conducted by Verdict Consulting on behalf of Webloyalty, a leading provider of incremental revenue for online businesses.

The new Verdict report states that despite growing by 13.3% in 2009, internet retail has been significantly impacted by the recession - costing internet retailers an estimated £1.6bn in lost revenues that would otherwise have been gained had the economy not fallen.

The findings show that sales growth will not return to pre-recession levels, with online retail predicted to grow by an average of 11% per year over the next four years.

Those that shop online are also becoming ever more demanding, looking for the best price, the biggest discounts and extra value from online retailers according to Verdict. This provides a key area of opportunity for retailers to differentiate themselves from the competition.

Neil Saunders, Verdict Consulting, said: “The recession has certainly caused online shoppers to alter their purchasing habits and online retailers are now also facing a severe slowdown in newcustomers. Our report suggests that retailers must turn their attention to driving repeat business – shifting marketing spend away from attracting new customers and instead focussing it on adding value for their existing customer base. Those retailers that try to win on price alone will be left behind but those that clearly offer extra value, and communicate it upfront to the customer will be ahead of the game.”

In 2009 over 60% of shoppers will have used the internet to shop, and by 2012, the Verdict report estimates this to reach over two thirds of shoppers.  This represents far lower growth in online shopper numbers than that experienced in the previous five years, says Verdict.

However, there is significant potential for retailers to generate revenue from monetisation of their websites.  Verdict estimates that by the end of 2009 the potential value of the monetisation of retail websites, excluding any revenue from advertising banners, could be worth up to £220 million.  As online retail continues to mature, Verdict forecasts this figure will only increase: potentially up to £949 million by 2013.

Martin Child, Managing Director of Webloyalty Europe, said: “With the internet retailing market becoming more mature and shoppers savvier, there is a demand for more sophisticated strategies. Webloyalty works with internet retailers to monetise their websites by generating incremental revenue and driving repeat business. Programmes such as ours bring something valuable to the online high street.”

Other key findings from the Verdict research include:

·          Abandoned baskets: More than £2bn of potential sales will be lost every year due to abandoned baskets.

·          Increase in channels: In 2009, Verdict estimates that around 18.7% of all retail sales were made using two or more channels - numbers that could easily double to around 40% by 2020.

·          Sales growth: Verdict state that if retailers lift the daily conversion by just 0.1%, unique visitors by 2% and the average transaction value by 3% - these small improvements in total could contribute to a total +10% increase in sales growth.

The following table summarises the ten trends and actions for online retailers in 2010. Neil Saunders, Verdict Consulting, said “These are the major things that we believe all retailers must consider when setting out their online strategy for 2010 and beyond.”

Find the complete report at:

http://www.webloyalty.co.uk/Webloyalty_internet_retail_trends_2010.pdf