Retailers are still struggling to get to grips with digital, as customer expectations soar to new heights. But how can brands close the gap?
As the dust settled following our standard Christmas shopping extravaganza in the UK, 2014 was declared by many as a record breaking year digitally, with UK online retail sales exceeding £100bn for first time. However, despite the influx of more and more of our pounds online, for a lot of retailers, 2014 (and in particular, the run up to Christmas) wasn't always successful.
The Black Friday/Cyber Monday weekend exposed the shaky digital infrastructure of a number of Britain's most prominent retailers. Major brands experienced online outages, succumbing to the sheer quantity of customers logging on to splurge their festive millions. Some sites took up to an hour to respond, at great cost in terms of revenue lost, as well as damaged customer loyalty.
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Unfortunately for retailers, while digital struggles and website crashes have become the norm, customer attitudes are changing fast.
We recently surveyed 2,000 UK consumers, revealing that retailers and online services need to get it right, quickly, with more than a fifth of consumers (22%) claiming that they would switch to an alternative brand if a website or service doesn't work within just five seconds. In line with this, a massive 82 per cent say a fast website or mobile app is important to them when they engage with brands - so much so that a significant 31 per cent of shoppers would not complete a purchase if the online experience was poor.
Meanwhile, a third of consumers (32%) report that slow website speeds, irrelevant online content and security concerns will negatively affect their perception of a brand. Nearly a quarter (24%) would go on to tell others about a negative experience should they have one - further impacting on loyalty and future custom. With social media usage ever rising, the ripple effects of negative experiences are hard to measure, but are sure to be getting ever more damaging and harder to reverse.
Acclimatising to the digital era
The easiest way forward for retailers is to get their online offerings right consistently. Our experiences of brands are often defined by how we are served online. Demanding consumers expect a consistent experience whatever the digital channel; brands only have to get it wrong once and customers will go elsewhere. Understanding how, when and where consumers are interacting with brands and each other - and where this places strain on a company's digital infrastructure - is now a crucial component for any customer facing business.
Brands shouldn't treat online as a single area. They must deliver the right type of content, optimising it for different audiences and devices. Location and context must also be taken in to account. For example, someone accessing their online banking from home, using a brand new iPad, will experience a different website or application than someone trying to do the same with an old mobile from a beach in Thailand during their gap year travels. In both cases the provider must ensure that the required information is delivered in the appropriate format.
Behavioural patterns also vary greatly and are changing over time. For example, the UK is way ahead of Europe in terms of using smartphones for online shopping, with 32 per cent using it for purchases compared to just eight per cent in France and 15 per cent in Germany.
In terms of recent failures, 2014 couldn't have come as a surprise to retailers. Online shopping has increased at an average of 11 per cent year on year, growing from £38bn in 2009 to £104bn in 2014. As for Christmas, that tends to happen every year.
Whether it's simply delivering an app in a fast and sleek manner, ensuring your data centre can cope with a rise in visitors during peak trading seasons, or using customer insights to refine the service you provide them with, brands must take responsibility. Consumers are no longer willing to wait for the right service. They'll simply hop online and find a rival able to offer it here and now.