Online retail gets bigger – and more friendly

Online retail is set to explode over the next year, according to Interactive Media in Retail Group’s (IMRG) recently published annual statement.

It predicts that internet shopping will become mass-market, fuelled by a substantial improvement in the range and quality of e-tail services on offer. Meanwhile, brands that have still not prepared for the e-commerce revolution will look back at 2004 as a watershed year.

The IMRG, whose senior members include Argos, John Lewis, Royal Mail and Microsoft, estimates that 20 million British shoppers will spend &£17bn online this year.

E-tail, according to the IMRG, will be boosted by “the industry’s serious commitment to providing satisfying customer experiences, the large critical mass of confident online shoppers, the highly secure payments solutions now provided by MasterCard and Visa, brisk take-up of broadband, and the roll-out of ISIS – the industry- and government-backed trustmark scheme that independently verifies e-tailers as trustworthy.”

Consumers, the report says, now expect brands to provide usable online shopping services: “Those that do not, or whose services are deficient, will find themselves shunned by shoppers and business partners alike.”

Looking further ahead, the IMRG says that by 2009, a quarter of all UK shopping will be via the internet or mobile devices, and the market will be worth &£80bn. A further fifth of purchases will be influenced by online research.

However, the e-tail industry faces “many challenges”, according to the IMRG. The group’s 12 “high priorities”, ranked by importance, are: customer-retention strategies; the effectiveness of marketing by medium or channel; multi-channel integration; advertising and marketing; statistics; customer relationship management; legislation; fighting fraud; Web design and usability; e-mail management; delivery and fulfilment; consumer confidence; and dispute resolution.

IMRG members voted consumer confidence the top industry priority last year, so the IMRG Senate decided that the ISIS (Internet Shopping Is Safe) merchant accreditation scheme should be further developed in order to foster consumer confidence in internet shopping, raise industry standards and enable reputable online merchants to compete for trade on a level playing-field. As a consequence, consumer confidence has slipped to 12th in this year’s priority list.

Other primary e-tail industry challenges are associated with e-mail, which is severely blighted by spam and viruses; the delivery of physical products, described as the “Achilles’ heel” of e-tail; and the law governing online retail, which, the IMRG claims, remains seriously imbalanced to the detriment of merchants.

Whereas 27 per cent of British consumers have shopped online, the European Commission reported this month that internet shopping is not as widely used in the rest of the European Union – just 16 per cent of EU consumers have made a purchase online, with consumers’ lack of confidence a key inhibitor.