News
Monetisation of online retail sites worth £949m by 2013
Webloyalty and Verdict Consulting predict the key internet retailing trends for 2010 and beyond
LONDON, UK, 9 November 2009 - A new report launched today, reveals ten online retailing trends for the 2010s and the most important actions online retailers should take to grow their business post-recession. The findings forecast that monetisation of online retail sites could be worth up to £949m by 2013.
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 new customers. 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."
| The ten trends | The ten actions | |
| 1 | Growth will be more difficult | The channel is slowly maturing and with many of the easy wins now maximised, further progress will be much slower. Retailers now need to think more strategically about maximising revenue online |
| 2 | The recession has impacted | A critical lesson for the online channel will be to add value and persuade customers to trade up in what they buy |
| 3 | Acquiring new customers will be tougher | As acquiring new customers becomes more of a challenge, retailers should switch more marketing budget to maintaining existing customers and driving repeat business |
| 4 | There will be more mouths to feed | Deep knowledge of your competitors' online offerings coupled with sophisticated testing of different customer acquisition strategies will be crucial to stay ahead of the market |
| 5 | Expectations will rise | Retailers must focus on adding more value than they have done in the past. They must clearly communicate why customers should shop with them, and what extra benefits can be gained from doing so |
| 6 | Loyalty can be increased | Those retailers that offer a combination of one-off tactical deals to excite the customer, combined with long-term strategic programmes with extra value benefits to lock in customers, will have a winning strategy |
| 7 | Conversion will be key | Website personalisation is a key way in which conversion can be grown. If 'cherry-picked' products are pushed through to relevant customers when they visit a website they are far more likely to see a product which appeals to them, and therefore make a purchase |
| 8 | Basket abandonment is here to stay | Providing clear, accurate and detailed information on products, prices and additional charges is a key way to reduce basket abandonment |
| 9 | Customers will be channel blind | Those retailers that offer multiple consumer touch points will see benefits; though branding must be consistent across all channels |
| 10 | It's more than about selling | To boost revenue, retailers should consider monetising their web pages by linking with third parties that offer products and services that suit their target market |
Press Contacts
Webloyalty
Sarah Simmie: +44 20 7291 8742
sarah.simmie@webloyalty.co.uk
MS&L:
Verity Lowe or Lennard van Otterloo +44 20 7878 3286
webloyalty@mslworldwide.com
About Webloyalty
Webloyalty is a leading provider of incremental revenue for online businesses. Worldwide, Webloyalty has more than two million memberships, benefiting from savings, discount and protection programmes, including Shopper Discounts & Rewards, which offers discounts of up to 20% at over 900 top online retailers. Webloyalty's UK clients - over 40 online retail and travel business sites - benefit from increased revenue and repeat purchases.
About Shopper Discounts & Rewards
Webloyalty's membership programme, Shopper Discounts & Rewards is designed for regular online shoppers.
For a 30 day free trial and only £10 per month ongoing, the programme will provide members with the following benefits:
- Year round savings and discounts of up to 20% when shopping online at over 900 top online retailers. These discounts are in addition to any other online discounts that these retailers may offer from time to time.
- Additional Shopper Discounts & Rewards seasonal promotional discounts, and free postage deals
- An initial £15 cash back voucher towards the next booking at Purplueparking.com
- Valuable shopping protection benefits, which are available for purchases made on and offline irrespective of whether the purchase is via a retailer in the Shopper Discounts & Rewards programme. (These include Best Price Guarantee, Extended Warranty of up to 12 months, Damage Loss & Theft Protection, and Delivery Guarantees)
- A dedicated Customer Service Centre with 35 UK based representatives that support the queries of members
For further information please visit: www.shopperdiscountsandrewards.co.uk
About Verdict Consulting
www.verdict.co.uk is the leading authority on retailing. The firm has privileged access, at the highest level, to key executives working within the top 200 retailers. Its research and publications provide executives working in a wide range of business sectors - retailing, manufacturing, advertising, marketing, professional services, property, finance and the media - with unrivalled independent analysis of the retail sectors, key trends driving each, insight into the major players and forecasts.
For more information please visit: www.verdict.co.uk
