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Conversion rates are projected to reach pre-recession levels.
British shoppers will spend 10.8 billion pounds ($17.40 billion) online in December, according to the IMRG Capgemini e-Retail Sales Index, marking the first time shoppers will spend more than 10 billion pounds (US $16.11 billion) on the web during the month. For the final nine weeks of the year, the index predicts online sales will total 20.4 billion pounds (US $32.86 billion).
The strong finish to 2013 will lead to a 15% increase in U.K. web sales in 2013 over 2012, according to the index, which is released by technology consultancy Capgemini and U.K. e-retail association Interactive Media in Retail Group (IMRG).
However, a separate study shows e-retailers are losing sales because of shipping fees shoppers consider too high.
As part of their holiday research, Capgemini and IMRG polled 50 web retailers in October and asked them to predict the week in December that will bring in the biggest online sales. The week of Dec. 9 ranked first, with 37% of retailers predicting it would attract the most web sales. The week of Dec. 2 ranked second, with 29%. Additionally, the firms forecast average conversion rates will reach 5% in Q4, the highest rate for the quarter in five years.
“The increase in the number of browsers that convert to buyers is positive news for retailers as they gear up for the key festive trading period, with the average conversion rate expected to reach pre-recession levels during the fourth quarter,’” says Tina Spooner, chief information officer for IMRG. “Already we are seeing a number of retailers ramping up their online offering in the run up to Christmas. Click and collect, next-day delivery and even one-hour delivery slots are just a few of the options on offer to attract the lucrative festive shopper at this highly competitive time of year.” Click and collect is a U.K. term for buy online and pick up in store.
Chris Webster, head of retail and technology for Capgemini, says the increase in mobile sales is a major contributing factor to the overall rise in e-retail sales. “The impact of mobile devices in 2013 has been very significant, and this forecast is in direct response to the overwhelming growth we have seen in sales via tablets and smartphones over the last few years,” he says. “The huge strides in technology and the improved mobile services from retailers, such as digital wallets, mobile coupons and location-based services, have all played a major role in driving growth through these channels. Improved mobile sites have made shopping on the move much easier.”
The Hudl tablet from U.K. supermarket chain Tesco and MyTablet from general merchandise retailer Argos—both unveiled this year—will likely be popular holiday gifts and continue to drive mobile sales into next year, he says.
Still, not all U.K. shoppers are content shopping on the web. Many don’t like the fees they have to pay to get their goods, according to a separate research report released this month by IMRG and eDigitalResearch. 77% of U.K. online shoppers have proceeded to the checkout of a retail site in the past year only to leave the site before completing the purchase, according to the latest eCustomerServiceIndex (eCSI), a survey of 2,000 online shoppers conducted in October. The top reason for leaving, noted by 53% of shoppers, is shipping fees, suggesting that many consumers were not aware of those fees until they went to check out. Additionally, 26% say they have placed an item in their basket only to check shipping fees and change their mind based on the price, while18% say they have abandoned a cart after learning how long it would take to get their goods delivered. The two firms estimate the revenue loss to U.K. online retailers stemming from shopping cart abandonment will reach 6 billion pounds (US $9.66 billion) in 2013.
65% of shoppers who abandoned a purchase at checkout because they felt delivery costs were unreasonable went on to see if similar products were available with lower delivery costs from another e-retailer. Ultimately, 8% of those shoppers went to a store to make the purchase. Most consumers in the survey (54%) say retailers should communicate delivery fees on the home page rather than waiting to reveal them during checkout.
Derek Eccleston, commercial director at eDigitalResearch, says consumer research from his firm suggests that most U.K. shoppers do not want to pay more than 5 pounds (US $8.05) for delivery of small or medium-sized items. “If retailers really want to capitalize on the Christmas shopping boom this year, then they must look to improve their delivery experience—from costs to timescales—helping to encourage shoppers to spend more,” he says.