The three biggest online shops are AliBaba, Ebay and Amazon and retailers started none of them, yet the amount of online shopping on those three sites dwarfs the spending on the websites of traditional retailers.
AliBaba, for instance, turns over in one day what some traditional retailers with websites turn over in a year.
To put it simply, there is a huge gulf between top online retailers and many traditional high street brands. Why are many experienced retailers failing to make the grade online? Because they don’t realise that people behave completely differently when shopping online.
Individuals from the finance, technology and education sectors started Amazon, Ebay and AliBaba. They had no traditional retailing experience. Similarly, the hugely successful, UK-based fashion site Asos was started by people who ran a props-for-hire business for the TV and film industry.
All these businesses have one thing in common- they had no traditional retail preconceptions and instead learnt about customers via their websites. Indeed, Amazon built its own software that learns from every action visitors take on its site.
It’s not so much about what traditional retailers are doing wrong; it’s more about what online retailers are doing right. The effective online stores make shopping convenient, it’s easy for shoppers to go directly to what they want.
Products can be found quickly using a Google search, price-comparisons can be made and an order placed within minutes that is delivered same day.
A research study conducted for the BBC revealed that 42 per cent of people start their online shopping journey in a search engine and not on a retailer’s website. Shoppers enter what they want into the search engine and then click on the product result that is presented to them. More often than not, those results come from the leading online shops, set up by people with no retail experience.
Meanwhile, the websites of traditional high street retailers often require visitors to browse their sites, often presenting items in the same groupings or ‘aisles’ as they use in their physical stores.
It is as though they are trying to recreate an online version of their physical store and it’s an indication that these stores haven’t noticed that people behave differently online.
Those struggling traditional retailers introduce concepts like ‘click and collect’, which offer convenience, but by doing so they often reduce their physical store’s offering because if shoppers want something, they can go online and get it.
The problem for shoppers is that the convenience of the real-world store is then diminished because the variety of products is less and visitors can’t ‘showroom’- see everything in-store before buying online.
During a recent BBC radio program where I was a guest, listeners discussed their frustrations with online shopping. Some callers were annoyed that traditional stores were making things less convenient. Similarly, other callers who loved the convenience of online shopping were frustrated by the lack of product knowledge or expertise, something they could get with an experienced real-world retailer. Research regularly shows younger generations are shopping in completely different ways to their parents; however, it seems retailers have yet to take this into account.
Online stores are reducing the convenience of being able to find exactly what shoppers want by introducing a variety of techniques for up-selling and cross-selling, which seemingly just frustrate and annoy people. Meanwhile, traditional stores are cutting down the convenience of getting what you want in town by pushing more of their product lines to online only.
Retailers appear to have forgotten that convenience is central to shopping and a large part of creating an enjoyable experience. There are people emerging now who don’t enjoy the experience of shopping either online or in the real world. Retail is struggling but it does seem there is a great deal it could do to help itself by ditching pre-conceived ideas about shoppers and studying how people behave online.
Retailers who do that will probably boost sales at their traditional outlets also. The online experience is about getting what you want instantly. Shoppers are accustomed to finding what they want immediately but what do bricks-and-mortar retailers do? They change layouts and shop design seasonally, making it harder for people to find things.
This just increases the frustration with traditional retailing, sending more people online.