We've heard it all before: the internet is encouraging us to spend more than we have ever done before, and mobile shopping is changing the way we buy. This is all well and good, but do the companies we spend money with online really know what's going on?
On the surface, the numbers readily suggest online shopping is on the up and up: Statista values worldwide consumer online sales at a $1.4 trillion, while recent research suggests that online sales in the UK, US, Germany and China will grow by £320 billion by 2018. However, these healthy stats mask the underlying picture.
The conversion problem
It's broadly accepted across the industry that in a high street shop around one in five visitors will eventually go on to buy something. This might not seem like much, but this is exactly why high street shops are designed in the way that they are, with attractive window and checkout displays. Brick-and-mortar stores need to attract as many people as possible through their doors to make sure that there will be plenty of visitors who are ready to lighten their wallets.
The story is very different online. According to ContentSquare data, online shopping sites tend to average at about 1.5% conversion rate (the percentage of visitors that go on to buy). Imagine being the owner of a shop where for every 100 visitors, only one would buy anything: you'd be getting nervous, to say the least.
Who buys online?
To many this is surprising: the media is full of reports of widespread data collection by the likes of Facebook and Google, as well as retailers. Given this glut of data on customer spending habits, why haven't retailers been able to sell their products online more effectively, and what can this tell us about the state of the internet more generally?
The core problem is a simple one: most businesses just don't know what's going on on their websites. Most ecommerce managers wouldn't be able to tell you, with certainty, why traffic or purchases go up or down on a particular day.
It's all about experience
Comparing high street shops with online stores can be an unfair comparison. High street shops are inherently easier to navigate: consumers are used to the layout and experience of brick-and-mortar stores, and there are shop attendants to help visitors if they get lost or stuck.
By contrast online stores have no such luxuries. While the average consumer is now relatively familiar with shopping online, ecommerce websites and their myriad different layouts and checkout flows can still be confusing, and if a user encounters a difficulty such as lack of availability for a specific product it's highly likely they'll just click away and go to the next online store.
While some companies are turning to technologies like chatbots and VR to help people make purchases online, there is a simpler way. So many ecommerce websites create needless confusion around the checkout stage of purchase - things like online forms, confusing instructions and broken links can be a real turn off, right at the point you're ready to make a purchase.
There's a name for these difficulties: poor user experience (UX). If businesses thought more about the actual experience people have when browsing websites and making purchases, they'd have an easier time of converting more of the online shoppers.
In the next few years good UX will become an increasingly vital ingredient to any ecommerce website: Walker even predicts that UX will overtake price and product as the key brand consumer brand differentiator by 2020.
Online shopping isn't new, but this enhanced appreciation for good design and quality experience is. Retailers are finally understanding that the general public has an eye for quality, and want their online experience to be as smooth and easy as that found in-store. Over the coming years, we can expect more parts of our online lives to be governed by a drive towards better UX.