E-tailers missing out to the lure of the high street

Online retailers need to get their ecommerce act together or they'll lose sales to high street competitors, according to a survey from management consultancy AT Kearney.

Online retailers need to get their ecommerce act together or they'll lose sales to high street competitors, according to a survey from management consultancy AT Kearney.

Four out of five online purchases fail and a third of online transactions have to be completed by phone. Consumers would buy more if alternative ways of buying online were available, and over 60 per cent of consumers are loyal to just one or two e-shopping sites. These are some of the startling findings of the global e-shopping survey, which canvassed 1,264 internet shoppers in the UK, US, Japan, Sweden, Germany and France. One of the survey's key findings was that four out of five attempted web purchases are abandoned because prospective shoppers find sites too hard to use. Problems included onerous information requests (52 per cent), site malfunction (42 per cent), and inability to find the product required (40 per cent). Alison Rawlings, UK head of user intelligence at web consultancy Razorfish, emphasised the need for would-be web retailers to invest upfront in usability research. "It's absolutely vital to find out beforehand how your customers shop on and offline, and prototype the site to highlight any problem areas before you launch," she said. Kate Buggeln, president of the relaunched boo.com, believes that e-tailers need to avoid sacrificing usability to design. "There were many lessons learned from the original boo.com, but the foremost is that high design doesn't necessarily make for a comfortable shopping experience," she said. "You need ease of use, attractiveness and a great product in combination to create a site people will come back to again and again." The survey also found, contrary to popular belief, web shoppers are more brand-loyal than high street shoppers once they find a site they like. Over 60 per cent repeat-buy at only one of two sites - the main reason being that it's too much trouble to re-enter personal data such as contact details and credit card information at each new site. AT Kearney's research indicates that best-in-class e-tailers are investing around $8m in setting up web sites, against an average investment of only $1m to $2m. The firm argues companies need to spend more to deliver acceptable ease-of-use levels. Joe Dickinson, survey leader and vice president of AT Kearney, said: "Many e-retailers skimp on basic front-end design and application investment, which leads to significant lost revenue and downstream costs." Respondents generally preferred to stick to websites with a bricks and mortar presence, reasons being the ability to touch and feel the products (64 per cent) and a greater feeling of security (58 per cent). This echoes findings, by financial services and consumer information provider Goldfish, that e-tailers are coming under price-pressure from conventional retailers' online operations. Its October e-tail price index found these 'clicks and mortar' competitors were undercutting the pure dot-coms by 12.7 per cent across a range of goods and services. By Candice Goodwin