UK RETAILERS MUST INVEST MORE ONLINE TO PROTECT SALES THIS CHRISTMAS ACCORDING TO HYBRIS

Published 17th December 2008

...research carried-out for hybris by Verdict Research suggests that to protect their market share and revenues UK Retailers must invest more in the online channel...


London – 15 December 2008: Research released today by hybris (www.hybris.com), a leading multi-channel commerce & communication software vendor, has revealed that the Internet still offers huge potential as a more sustainable route to market as UK retailers fight to grow sales in the current economic climate and the run-up to this Christmas. According to the research, carried-out for hybris by Verdict Research, Internet shoppers in the UK are expected to spend £7bn in the fourth quarter of 2008 in the run up to Christmas – a rise of almost 40% on last year according to the research.

Critically, however, the research suggests that many retailers will struggle to manage the impending peak sales period because of underperforming websites that are not able to cope with increases in demand. Restricted access, complete unavailability and poor customer experience is forecast by Verdict to result in a loss of £139m sales from the online channel, amounting to almost 2% of total online sales in the fourth quarter of 2008.

In its report on the research, ‘Robustness and Speed to Market’, Verdict suggests that UK retailers seeking to reduce lost sales from the online channel must combat uneven patterns of demand from increasing numbers of Internet shoppers by ensuring that their sites are robust enough to cope with high levels of online and traffic typified by the festive season. The importance of a smooth, uninterrupted browsing and transactional experience cannot be overstated, according to the report, if retailers want to prevent customers from taking their business elsewhere, whether it be to a physical retailer or to an online competitor. Retailers must tackle the problem of lost sales now before the Internet as a channel becomes even more popular and the volume of transactions increases resulting in greater pressure on sites that do not have the appropriate infrastructure in place.

Verdict points out that the drive for robustness cannot be at the expense of evolution if retail sites are to respond to ever changing consumer demand and expectations. According to James Flower, Senior Consultant at Verdict Research; “The online retail revolution has resulted in significant change since the first transactional websites of the early 1990s. Technological developments offer retailers the opportunity to enhance customer service, add functionality and increase customer personalization but they are going to have to be much more creative online if they are to stand out from the crowd and appeal to a far more Internet savvy customer. The online marketplace is evolving more rapidly than ever before and if retailers want to maximize the opportunity that this presents, they must ensure that their systems have the flexibility and scalability to keep ahead of the market.”

Retailers are right to offer a credible online presence as part of a multi-channel retail strategy but Verdict stresses that Internet retailing is becoming increasingly complex and retailers will need to address six key challenges if they are to get it right online and emerge from the current downturn primed for growth.

The six key challenges are identified as:
• Robustness
• Speed to market
• Personalization
• Range management
• Communications
• Integration

Commenting on the research, Ariel Lüdi, CEO of hybris group said; “The research from Verdict shows that even though online sales are increasing in the UK, overall retail sales are set to decline in the current economic downturn. As Retailers struggle to protect their market share the importance of maintaining a robust and effective online presence has never been greater, without effective websites and online ecommerce platforms this will be a struggle for many companies.”

To view the Verdict ‘Robustness and Speed to Market’ white paper, please visit: http://www.trends.hybris.com/report1.pdf