Online sales grew by more than 30% in the fourth quarter, but store sales slid by 6.1% year over year.
Limitations imposed by existing technology and infrastructure are the top obstacle to improving e-commerce sites with new shopping features, which increases the demand to test technology performance, Retail Systems Research says in a new study.
Retailers of all sizes report that limitations imposed by existing technology and infrastructure are the top obstacle to upgrading the shopping experience, according to a new study released this week from Retail Systems Research LLC.
Moreover, migrating to new technology features-like online videos to demonstrate products and virtual models that help shoppers determine the rights product size-requires retailers to step up their testing of how well pages load and new shopping features function as expected.
“In the early days of e-commerce, it was a common technical faux-pas to have your site crash because too many people tried to access it at the same time, or to have it look odd on one browser over another,” the report says. “Today, retailers can no longer assume that their sites are able to easily handle increased holiday volume or that customers will stick around to wait for a web page to load. Delivering quality web experiences while using advanced web technologies is now a competitive necessity.”
Among leading retailers (or “winners” that outperform their peers in sales), 70% say that existing technology prevents them from moving forward with new solutions. 56% of average retailers and 67% of so-called laggards (retailers that underperform their peers in sales) also cited technology limitations as an obstacle to improving performance, the report says.
In addition, 56% of winners, 41% of average merchants, and 33% of laggards say they face technology challenges, including durability of hardware devices and expense.
When asked which technologies offered the most promise for engaging customers, 77% of winners said online tracking behavior and 100% of laggards cited online behavior tracking. 62% of winners said expanded video capabilities (reviews, product demonstrations) and 27% of winners said virtual human interfaces (avatars, virtual models) held the most promise.
For laggards, 40% cited expanded video capabilities and 20% cited 3-D (online stores, product views.)
The study also found that many retailers are “unimpressed” with their current e-commerce providers. 43% of retailers with more than $1 billion in annual sales said they were “not at all satisfied” with their vendor, while 29% said they were “somewhat satisfied,” 14% said they were “satisfied,” and 14% said they were “very satisfied.”
Among retailers with between $250 million and $999 million in sales, 12% were “not at all satisfied,” 12% were “somewhat satisfied,” 62% were “satisfied,” and 12% were “very satisfied.” Among retailers with less than $250 million in annual sales, 17% were “not at all satisfied,” 31% were “somewhat satisfied,” 36% were “satisfied,” and 17% were “very satisfied.”
Among suggestions offered by the report:
• Retailers-especially multi-channel retailers-should spend less time emulating pure-play e-commerce sellers because they have an entirely different goal set, according to the report.
• Retailers should simplify payment options, perform basic segmentation of their online consumers, and enlist comprehensive reviews and video to build community around their brand.
• Retailers should get more innovative with their web sites. “Retailers simply can’t wait for consumers to dictate what they haven’t even figured out for themselves. E-commerce winners will be the ones to invent something new, not track what customers tell them they want.”
“As you make these changes, it’s critical to keep up with testing and monitoring of web site performance,” the report says.
The study, “ Playing Well with Others: eCommerce’s Evolving Role in the Customer Experience,” was sponsored by Gomez Inc., a provider of web site performance technology and services, and Microsoft Corp.