Benchmarking the Digital high StreetUK EcommErcE PErformancE IndEx 2012

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contentS1. IntrodUctIon

2. mEthodology

3. ExEcUtIvE sUmmary

4. thE onlInE oPPortUnIty

5. WEbsItE ExPErIEncE

6. broWsIng

7. bUyIng

8. aftEr salEs

9. conclUsIon

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introDuction

ecommerce is an area of consistent growth. our own research reveals that over a third of online shoppers (36%) have increased the amount of online shopping they do over the last year. for all sorts of products and services, consumers are increasingly turning to the web to make their lives easier but, as the online market matures, so too do consumer expectations.

almost half of online shoppers have shopped using a mobile device in the last six months, so ecommerce challenges and opportunities continue to evolve as technology develops. With retail competition as fierce as ever, it is vital for online retailers to differ-entiate themselves and offer the best possible experience, on every device, in order to keep customers spending.

but what exactly are consumers expecting from online retailers now? and how are other online trends, such as the uptake of social media, affecting online shopping be-haviours?

We conducted consumer research to gauge the expectations of online shoppers and identify the make-or-break factors for consumers parting with their money online. We then took these findings and assessed the websites of 25 of the UK’s top retailers against our best practice benchmark, to see just how many are meeting the expecta-tions of today’s web-savvy consumer.

are retailers ticking the right boxes and delivering an engaging and rewarding web expe-rience? or are they risking customer loyalty, extra revenue and market share by underes-timating consumer expectations? this report reveals all, and offers practical advice and real-world examples to show how online retailers can improve to meet and exceed expectations.

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In order to assess how the UK’s top retailers were faring against consumer expectations, we combined the following two studies:

1. consumer survey on attitudes to buying online

2. retail benchmark study

for the consumer study we surveyed over 1,000 people in the UK about their views on:

- the features that are important to an online shopping experiencewhen visiting an e-commerce site

- the features that are important to the online shopping experiencewhen researching a product on an e-commerce site

- the features that are important to the online shopping experiencewhen purchasing a product on an e-commerce site

- the top three most important elements that contribute to a positiveonline purchasing experience

methoDology

In the benchmark study, we selected 25 of the top UK retailers from the Hitwise Top 50 Hot Shops list and assessed them against the four e-commerce areas explored in the consumer research: the overall web experience, browsing, buying and after-sales. We scored each retailer using a range of criteria for an in-depth assessment of the e-commerce experience they offer consumers. the total points available to each retailer was 600 and each was awarded a score out of 100%.

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overall weBSite experience:

- does it offer a wide range of customer service options?

- Was a loyalty scheme publicised on the site?

- does it enable the sharing of products/links via social media?

- does the retailer offer value added content such as articles or blog posts?

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2BrowSing:

- does the site display good quality product pictures? are they zoomable or rotable?

- Is it easy to search for products?

- does the retailer enable product comparisons?

- does it give consumers the option to create a wish list?

after SaleS:

- Does the retailer send an email confirmation of order placement?

- does the company notify consumers when dispatching items?

- does the site offer online tracking?

Buying:

- how quick was the checkout process?

- does it have clearly displayed shipping costs and or return policies?

- does the retailer offer free shipping?

- does it offer consumers the opportunity to claim discounts or vouchers?

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the Scoring waS BaSeD on four main categorieS, aS followS:

* Each website in the benchmark study was analysed in July-august 2012. a weighting has been applied to the scores achieved by each retailer to award each one an overall score out of 600.

* the commerce consumer study was conducted in July 2012. the results of answers to the questions were translated into percentage values.

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executive Summary

the top performing retailerS are:1. amazon – 72.5%

2. marks & Spencer – 70%

3. house of fraser – 66%

4. aSoS – 65%

5. argos – 65%

note: apple, IKEa and h&m were not assessed in the 2011 report

The dual research has provided extensive insight into how some of the UK’s top retailers match up to consumer expectations online. the results reveal that funda-mental website aesthetics and functionality are generally delivered well but, when it comes to purchase-specific functions (e.g. checkout process) and content (e.g. displaying returns policies), UK retailers are letting consumers down. also, surpris-ingly few of the top retailers are taking advantage of non-essential, but highly valu-able, features such as video content, free delivery, and loyalty schemes, which could really set them apart.

overall, the online retailers we assessed scored a slightly disappointing average score of 58% against our best practice benchmark, which is down on 2011’s score of 63%. The top five performers, however, have an average score of 68%, which is a slight (2%) improvement on last year and suggests that the biggest players are maintaining their efforts.

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weBSite uSaBilityOnline shoppers place the greatest importance on easy navigation (92%) around retail websites and effective product search (89%), which retailers largely seem to have covered.

However, a quick and efficient checkout process is also viewed as important or vital to their online shopping experience, and many of the retailers that we assessed are falling short here. as the second most common reason for abandoned purchases, this really is an issue that retailers should be looking to remedy.

Every one of our 25 retailers scored full marks for high quality images, however many fell short in providing a range of customer service options such as phone, email, social media and instant chat. This is a significant area of concern, given that it is one of the top five most important considerations for UK consumers.

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making a purchaSeEven the top retailers are struggling to meet expectations when consumers get as far as purchasing a product, which could be seriously impacting conversion rates. For example, the most important thing for consumers is to see clearly defined shipping costs (92%) but the average score for this was only 75%. Hidden delivery costs are also the number one reason for online shoppers to abandon a purchase, so transparency is key.

Unsurprisingly, nine out of ten consumers said that free shipping is a priority but re-tailers should note that it is considered ‘vital’ to one in three online shoppers. Only one in five of the retailers we assessed is currently offering free shipping.

communication is also very important to online shoppers and most retailers hit the mark by providing an email notification of purchase. However, one in three disap-pointed when it came to providing an email notification of dispatch.

the main disconnect between retailers and consumers was revealed to be in clearly displaying returns policies. The vast majority (88%) of consumers said this was important or vital, but only one in ten retailers show this information during checkout.

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online Shopping BehaviourSover a third of the online shoppers that we surveyed (36%) said that the amount of online shopping they do has increased over the last year, so the ecommerce op-portunity certainly continues to grow. almost half have also made purchases using a mobile device in the last six months.

our research also showed that loyalty is perhaps surprisingly high online, as over half (57%) said that they have a few favourite websites that they like to shop from,

whilst 40% will buy from whichever site offers the best price. this demonstrates that price is not always the clincher, and that retailers ought to concentrate on delivering the best possible customer experience online.Even more so because consumers are increasingly vocal online. one third of online shoppers has contacted a retailer through social media at least once in the last six months with a problem, query or complaint.

57% have favourite websites they like to shop from

40% buy from whoever has the best offer

57% 36%

40%

36% increased their online shopping the last year

50% made purchases using a mobile device the last 6 months.

50%

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over a third of the online shoppers that we surveyed (36%) said that the amount of online shopping they do has increased over the last year, so the ecommerce op-portunity certainly continues to grow. almost half have also made purchases using a mobile device in the last six months.

but what are these shoppers buying? Perhaps unsurprisingly, the answer included pretty much everything! however, it was interesting to see that there was no single product category that leapt out as a clear leader, which suggests that consumers are increasingly open-minded about the types of products they will buy online.

the moSt popular typeS of online purchaSeS are:1. clothes/shoes

2. cDs/DvDs/video games

3. Books/stationery

4. electronic goods/gadgets

5. groceries

our research also showed that loyalty is perhaps surprisingly high online, as over half (57%) said that they have a few favourite websites that they like to shop from, whilst 40% will buy from whichever site offers the best price. this demonstrates that price is not always the clincher, and that retailers ought to concentrate on delivering the best possible customer experience online.

Even more so because consumers are increasingly vocal online, as one third of on-line shoppers has contacted a retailer through social media at least once in the last six months with a problem, query or complaint.

In delivering the best possible customer experience, retailers need to consider the entire online shopping journey. this means:

• overall website experience

• Browsing stage

• Buying stage

• after sales

Here’s how our top performing retailers are balancing the key areas:

notice how amazon, the top scorer, has scored an even spread of points in each of the four key areas. this shows that the company has carefully considered the entire shopping journey and implemented best practice at every stage.

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Websites have become much more than just an online ‘shop window’, which has resulted in an explosion of retailers taking advantage of the ecommerce opportu-nity and a dramatic shift in consumer expectations.

such a competitive market space has created almost insatiable, ongoing demand for improved technologies and driven rapid advances in software over recent years. such developments are showing no signs of slowing, and provide savvy retailers with continual opportunities to extend their competitive advantage by improving the online experience for customers and ultimately boost sales.

retail websites are expected to be interactive, dynamic places that draw consumers in with relevant, engaging content. online shopping should be an enjoyable, simple process, and consumers expect as much of a helpful and personal experience as they might on the high street. Whether visitors are looking for information, brows-ing or buying, the overall experience needs to be a positive one that increases brand loyalty and drives them towards a conversion point.

are retailerS meeting conSumer expectationS?When visiting websites, online shoppers place the greatest importance on easy navigation (92%) and effective product search (89%), which the retailers that we assessed largely seem to have covered.

However, a quick and efficient checkout process is also one of the most important/vital factors in their online shopping experience, and many of the retailers that we assessed are falling short here. as the second most common reason for abandoned purchases, this really is an issue that retailers should be looking to remedy.

Another critical area where we identified room for improvement is in the range of customer service options provided, and how simple they were to find. With so many communication channels available now, consumers want to be able to engage with brands on their terms – be that over the phone, email, instant chat, or twitter. only three of our retailers scored top marks here: debenhams, house of fraser and homebase.

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who DoeS it BeSt?Marks & Spencer and Debenhams came out on top for overall website experience, both with a whopping 95% score against our best practice benchmark.

Both sites are excellent examples of attractive, easy to navigate websites that allow customers to find and purchase what they’re looking for efficiently. Indeed, many of the top retailers that we looked at scored highly for navigation, but marks & spencer gave itself an edge by providing added-value content through its m&s stories site and offering a mobile version of the main website. meanwhile, debenhams joined m&s in top position by scoring well for its range of customer service options and its beauty card loyalty scheme.

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BeSt practice tipS

• make products easy to find – make your website clean, clear and easy to navigate. Provide visitors with clearly displayedproduct categories and advanced search functionality so they can find what they’re looking for quickly and easily.

• Share offers – Don’t be afraid to shout about your latest offers, but remember - one size fits all is no longer good enough; be smart and personalise the website experience so that the offers are targeted to different visitors. tell them why theseproducts will benefit them and make it easy for them to click through and buy; they’ll appreciate you giving them a moneysaving deal on something they really need.

• Don’t sell all the time – Your website isn’t all about selling. Build trust and let your brand’s personality shine through bydeveloping content that really sells you and not just your products.

• get social – This could be the difference between a boring bit of copy and creating a viral consumer experience; if some-one likes your brand, make sure they can share this with a friend. It’s important that these customers have an opportunityto engage with you over these channels too, and that your brand’s personality and messaging remains consistent across theboard.

• remember mobile – Don’t put mobile off. It’s not an afterthought. Create a site optimised for thumbs (as well as mousearrows) from day one. overlook it at your peril. a native web app can be a good idea, but not a substitute for your mobile-friendly site.

• Base decisions on analytics – there is an ever-increasingly variety of devices, operating systems and screen sizes on themarket. supporting all of them can be a daunting prospect, so use your analytics information to ensure that you support thekey ones and determine which platforms you need to support.

• personalise – look at what you can personalise within the entire customer journey – from greeting people by name torecognising what they’ve done on the site before and showing them tailored offers.

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When online shoppers are browsing with intent to buy, retailers need to do eve-rything they can to make the process informative and enjoyable. from providing as much detail in product specification as a customer might need, to making it simple for them to compare products and see reviews from other customers.

Product associations and recommendations shouldn’t be underestimated either. Not only are these useful for shoppers who want to make an informed decision before parting with their cash, they are also a key tool for retailers to increase basket values.

are retailers meeting consumer expectations?browsing is a critical stage for retailers to encourage sales, but the average retailer score in this area was just 62% against the benchmark. so where are they going wrong?

Effective product search (88%) and detailed specification information (70%) are the key concerns for online shoppers when browsing, and retailers are performing well here with average scores of 92% and 88% respectively. However, our research reveals a significant disconnect between consumers and retailers when it comes to video content. With only one in four retailers providing this, it seems even the big-gest players are underestimating the importance of video to consumers.

high quality images with multiple angles and zoom functions (62%), and user reviews (54%) are also important to online shoppers, and over 40% appreciate the ability to compare products.

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who DoeS it BeSt?M&S and VERY came out on top, both scoring 84% against the browsing benchmark. They are great examples of how going the extra mile with user reviews, product recommendations, and video content can elevate a retail site from providing a good visitor experience, to an outstanding one.

at the other end of the scale, however with less than 20% score against our best practice benchmark for browsing, h&m lost a lot of points by overlooking the core importance of search and detailed product information.

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BeSt practice tipS

• Spell it out – Give as much information as possible on everything from pricing to shipping to returns. Don’t hide it away either, makesure everything is easy to find at every stage of the shopping journey, and on each device.

• make it visible – Many consumers like to see a product from more than one angle, so it’s worth investing in rotatable, zoomableimages and, where appropriate, video.

• give visitors options – consumers often like seeing what else is available out there, so recommend a product or showcase add-ons. this is a great way to boost sales.

• enable comparisons – allow people to compare products in the same category. this is especially important with more technically-based products, where even the smallest variance in specification can make a world of difference.

• focus on context – have a clear picture of how your customers will use the site and the user journeys they are likely to take. Where are they? Why are they looking now? What do you need to do to support them?

• include reviews – customer reviews are powerful endorsements for your products: they reassure customers and overcome lastminute fears. according to ratings company reevoo, a review reader is 200-300% more likely to convert than a customer whodoesn’t read one (and 67% of customers trust reviews even more when they see both good and bad ones). And that goes for mobiletoo.

• keep your site sticky – While it sounds obvious, look at ways to keep customers on your site – give them the information theymay be leaving your site to find (e.g. reviews, video demos, price comparisons, price promises etc.) and make it easy to come back(saved wish list).

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Buying

For any online retailer, it’s the final conversion that really matters and that’s why the checkout process is so important. By the time a customer clicks ‘checkout’ they generally have the intention to buy, yet drop-off rates at this final stage can be high. this suggests consumers are not afraid to abandon a sale and go elsewhere if they encounter the slightest issues at any stage in the checkout process, so it’s vital to get it right.

the checkout process also gives retailers an opportunity to add value, either through cross- and up- sell mechanisms or by building brand advocacy through offers like free shipping.

are retailerS meeting conSumer expectationS?Even the top retailers are struggling to meet expectations when consumers get as far as purchasing a product, which could be seriously impacting conversion rates. for example, the most important thing for consumers is to see clearly defined shipping costs (92%) but the average score for this was only 75%.

Unsurprisingly, nine out of ten consumers said that free shipping is a priority but retailers should note that it is considered ‘vital’ to one in three online shoppers. Only one in five of the retailers we assessed is currently offering free shipping.

the main disconnect between retailers and consumers was revealed to be in clearly displaying returns policies. The vast majority (88%) of consumers said this was impor-tant or vital, but only one in ten retailers show this information during checkout.

but what impact does all of this have on conversions? We asked online shoppers to tell us what is most likely to make them abandon an online purchase and they said:

1. hidden delivery costs

2. complicated/lengthy checkout process

3. Slow website

4. lack of product information

5. compulsory account registration

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who DoeS it BeSt? Amazon is a great example of a painless purchase process, scoring top marks for speedy checkout (including a ‘1-Click ordering’ option), free shipping, support for multiple payment options, and a clearly displayed returns policy.

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BeSt practice tipS

• make registration optional – give your customers the option to checkout as a guest, saving them valuable time and removingany barriers to making that sale (often the first). You still gain their basic information and profile that you can use to lure them back.

• provide a progress indicator – let your shoppers know how long the journey will take by giving them an indication of howmany steps they need to complete and where they are in the process. a back button enabling shoppers to move between pages ofthe checkout process without losing information is also good practice.

• provide photos of items in their basket – make it easy for consumers to recognise and review the items they have purchasedand add or remove products in their basket.

• give options to leave and return – allow shoppers to save their basket for later, so they can return to purchase items whenit’s more convenient.

• consider the whole multi-channel sales journey – tempted to view mobile, web and in-store as discrete, separate chan-nels? Your customers don’t. They’ll move from web to app in-store to social media to review sites without a second thought. Theirfinal purchase channel isn’t always the research channel where they first encountered your products. Ensure mobile is a seamlessexperience that’s consistent with your core site.

• promote social connections – While explicit sharing and customer reviews are key objectives – on mobile and desktop –they’re not the only way to benefit from social connections. Simply showing that your visitors’ connections have brought from youcan deliver the levels of trust needed to make a sale.

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after SaleS

When shopping online, perhaps the biggest drawback is the time gap between purchasing and playing with your goods. regularly communicating with customers post-purchase will help keep them satisfied and reassured that their purchase is being handled with urgency. A few basic, automated processes such as email or SMS notifications are simple to provide, but hugely valuable to the customer.

are retailerS meeting conSumer expectationS?Our research demonstrated that communication is very important to online shoppers, and most retailers hit the mark by providing an email notification of purchase. However, one in three disappointed when it came to providing a simple email notification of dispatch.

The average overall score for after sales service was 65%, so there is certainly still room for improvement. The most common area where retailers were falling down is in providing SMS updates along the delivery journey, with only one in five providing an SMS alert at any stage.

who DoeS it BeSt?Apple, Topshop, River Island and Boots all scored a healthy 85% by providing online order tracking, email notifications, SMS alerts and delivering orders in good time.

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BeSt practice tipS

• Send a confirmation email – Once a shopper has purchased an item, make sure they receive an almost immediate automated confirmation of thepurchase.

• confirmation of despatch – Let your shopper know when you’ve despatched their product as they’ll appreciate knowing the process is movingforward. If things are delayed, make sure you tell them and don’t leave them waiting.

• provide online tracking – give customers the option to track their purchases online, or provide tracking numbers so that they can do this via thepostal service or courier.

• Delivery notifications – In an increasingly mobile world, it’s a nice touch to give customers the option of receiving a text message to confirm theirdelivery time.

• content creation – think about how you can enable customers to create their own content around your products (e.g. how they are using them)

• loyalty counts – 57% of people have a few favourite websites they shop from so don’t forget to nurture your customers for the next purchase. Use their profiles to offer them personalised email and social offers or give them special status for shopping regularly with you.

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concluSion

This report has identified what matters most to consumers when shopping online. With this, we have also highlighted where retailers are meeting and even exceeding consumer expectations and, critically, where they are falling short.

The overall score of 58% is an indication that retailers are faring reasonably well, but also demonstrates that there is plenty of room for improvement and a real opportunity for savvy retailers to give themselves a significant competitive edge with just a few simple measures.

We’ve seen some great examples of websites delivering excellent service in particular areas, but very few are scoring well at all stages of the online shopping journey. many retailers have fallen down at different points, from the overall website impression and browsing through to buying and after-sales. amazon, the retailer that scored the highest overall, is a great example of how taking care of every stage can deliver a superior customer experience and this will ultimately support increased conversions and sale values.

the good news for retailers is that implementing many of the features that will enhance the browsing, buying and after sales experience is relatively easy and very cost effective. With the right website design and development, combined with an effective, easy-to-use e-commerce and content management system, retailers of all sizes can make their websites more engaging and interactive places.

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give uS your feeDBackWe would love to know what you think of this ebook. do you agree? disagree? have we missed anything out?

you can give your feedback via twitter to @episerver or by email to marketing@episerver.com

We look forward to hearing from you.

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