Prime Minister David Cameron said last week that the UK budget deficit was worse than we thought. Then a week later the new “Fiscal Watchdog” downgraded the growth predictions for our economy. Now, today, we know that part of the problem is because Internet sales are much worse than we thought. A new study by the accountancy company Sage, has shown that 93% (yes, almost everyone) gives up buying stuff online. Only 7% of people who go to an online shop ever end up buying anything. Imagine, for a moment, that you run a high street store – indeed you may have your own physical retail outlet. What would you do if 93% of people who came into your shop walked out without making a purchase? If only 7% of your footfall actually dipped their hands in their pockets you would be out of business pretty fast.
Next year, online retail is expected to be worth £52bn in the UK alone. If that is a mere 7% of shoppers, just imagine where we would be if more people bought online. And just think what your own life would be like if you could convert more visitors into buyers.
The real tragedy is that online shops of all kinds are failing to do that. In spite of the success of Amazon and others, they actually still represent only a tiny proportion of total sales. Less than a third of all retail sales happen online; people still like physical shops. But perhaps we don’t actually really prefer all that tedious driving, parking, carrying heavy bags and driving back home again. Perhaps it is simply more convenient than the hassle of much online shopping?
After all, online shopping carts are notoriously complex and much more cumbersome than paying in a shop. There is plenty of advice on reducing shopping cart abandonment, which helps, of course. But the Sage study released today highlights other issues which are important if you wish to sell more online.
Some of it is obvious, yet few online stores appear to do it. For instance, the fewer pages you have to click through to actually buy something, the better. Amazon has had its “one click” buying system in place for several years. Why don’t other sites do the same? Payment pages that are customised get more people to buy. With shopping cart “software as service” providing only limited customisation it appears that online shoppers are confused as to actually who they are buying from. That reduces the likelihood of purchase.
Importantly, the study also found that shoppers were more likely to buy if an online shop is an active user of social media. In other words, if your Internet business is not active on Facebook and Twitter you are less likely to be able to sell anything via the web. Another reason for needing to get to grips with social media.
Overall, the findings of this study make somewhat depressing reading. In spite of all the advice available on improving online selling, few businesses actually take it. Perhaps they are so focused on driving traffic and getting to the top of Google, they have forgotten that the real success goes to people who convert most of their visitors into buyers. This research confirms that people are not converting anywhere near enough online shoppers as they might be able to. Part of the reason is failure to truly connect with those visitors, but perhaps another part of the reason is that online retailers are too focused on the wrong target – Google. Even though search engine marketing is important, more important to your business – and ultimately to the sad economy – is conversions. That should be the principal target of your business, not other online activities.