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Business

How the rise of online window shoppers is making life hard for internet retailers

Online conversion rates drop as shoppers browse and compare more...
Written by Steve Ranger, Global News Director on

Online conversion rates drop as shoppers browse and compare more...

Online shopping

Online shoppers are now visiting several websites to compare products before they decide to buyImage: Shutterstock

Savvy internet shoppers are making life harder for retailers in the UK as they take more time to browse, research and compare products before parting with their cash.

Online conversion rates in the UK have fallen by 55 per cent over the past five years as consumers have become more willing to shop around.

Retailers' online conversion rate is calculated by taking the number of orders as a percentage of the number of unique website visitors each month. If the online conversion rate declines it may imply that sites are getting more visitors, but that the number of orders isn't growing in parallel.

In 2006, the average online conversion rate for retailers was 8.4 per cent, according to the IMRG Capgemini e-Retail Sales Index published on Thursday, but that figure has steadily declined and the latest results reveal the rate to now be 3.8 per cent.

IMRG's CIO, Tina Spooner, said the steady decline in online conversion rates in recent years is evidence that consumer purchasing behaviour has changed, and the average online shopper today is "making more considered purchases" and often visiting several websites in order to compare products before deciding to buy.

As a result, retailers need to work harder to hook such consumers by creating a personal shopping experience and relevant offers based on their shopping habits, the report said.

"With the advent of mobile shopping and the popularity of tablet devices, consumers now have the freedom to browse online stores at any time of day, even while on the move. This will inevitably result in a considerable increase in visits to online retail sites, and therefore we may see conversion rates continue to decline," Spooner said in a statement.

Still, while conversion rates have dropped, the total size of the market has grown from £30.2bn in 2006 to £58.8bn in 2010, as more shoppers than ever spend money online.

Clothing and fashion retailers have generally seen higher conversion rates than the overall online shopping market, with rates rising between 2009 and 2010 despite the overall decline in the total market. This trend is continuing in 2011, with clothing retailers recording an average conversion rate of 5.3 per cent in the first half of the year, compared with five per cent in the first half of last year.

The report attributed the rise to the nature of fashion products which, it said, work particularly well with rich media tools such as video, 3D rotation and zoom, and the capacity to personalise and edit products such as selecting colours from a palette.

In previous years, retail sites largely had to rely on fairly basic, static images and text product descriptions, which did not engage shoppers as much or encourage browsing and product comparison.

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