If you’re an ecommerce retailer you probably already know how important it is to understand the market or markets, you operate in. Whether you’re expanding across borders or just want to improve your ecommerce experience at home, consumer insights are essential for growth.
This is especially true for substantial ecommerce markets like the UK, which has the most avid ecommerce shoppers of the European countries according to The Masterindex 2017. UK consumer insights from the report should be of interest to all ecommerce retailers, not just those already operating in or looking to expand into the UK. As a leading ecommerce market, the UK is often the first to adopt emerging technologies and experience changes in shopping behaviour, with other EU countries following. Developments here could be indicative of more widespread trends to come.
The key insights
Overall the British are the most avid EU ecommerce shoppers with 41% of consumers making purchases online every week, and 8% purchasing every day. This far exceeds the average EU figures of 25% and 6% respectively. In fact, when it comes to consumers who shop online at least once a week, Ireland is the nearest rival with just 32%.
That’s a lot of already engaged customers. Of course, with lots of customers comes lots of competition. Fortunately, with more competition and more consumer choice, UK ecommerce is just as attractive to overseas shoppers as it is to businesses. Britain’s nearest neighbour Ireland, for example, tops the list of EU countries for cross-border shopping with over 60% of online shoppers buying abroad at least once a year. For the rest of the EU, this makes the UK a potential launch pad to reach consumers and markets outside the UK.
Like the rest of Europe, clothes, tickets and books are the top three most purchased product categories. The UK is, however, unique in their love of online grocery shopping. They are twice as likely to buy groceries online than their European neighbours in Holland, Belgium and France with 1 in 3 UK ecommerce shoppers spending their time and money on groceries online. With so many Brits now regular ecommerce shoppers, it is perhaps unsurprising that online shopping has become so fully integrated into everyday life.
When it comes to payment methods, EU countries are twice or even three times as likely to use online banking than debit or credit card. Conversely, the UK, along with France and Ireland, are still far more likely to use card for online payments compared to any other method. While ecommerce retailers should always be looking to offer a wider choice of payment methods to capture as many purchases as possible, the focus should be on providing the most popular solution in your destination country.
Appealing to UK consumers
Consumer insights define and drive the actions needed to ultimately impact your bottom line. Understanding online shopping behaviour should be the first step in identifying and acting on opportunities to keep your current customers engaged, and to win new ones. Based on the key insights from The Masterindex 2017 and current UK trends, here are some current opportunities you could be looking at to engage the UK market.
For UK shoppers, the simple magnitude and prevalence of online shopping make convenience a must have. The widespread adoption of online grocery shopping shows how British shoppers have readily adopted ecommerce to make even the most everyday tasks convenient.
Subsequently convenience, such as choice and immediacy, is expected from all ecommerce retailers, not just supermarkets. Marketplaces such as eBay and Amazon, as well as retailers such as Argos and John Lewis, join Tesco in the top 10 ecommerce sites in the UK. All continue to meet and exceed customers’ expectations for convenience, offering services such as same day delivery and click-and-collect that have become standard in UK ecommerce.
Retailers based in the UK should therefore look to develop and promote their delivery options, offering consumers a wider choice of faster or more convenient services. While cost is always a factor, 39% of UK shoppers say convenience is most important for delivery, compared to 23% who say cost is the most important thing. In 2016 72% of consumers made use of click-and-collect services and that number is expected to rise.
For both ecommerce and omnichannel retailers offering these services it’s now about keeping customers as much as winning them. Retailers should promote these services on their homepage and throughout their site to both inform and attract customers. Where cost is a concern, it should always be best practice to set a minimum order value for offers like free delivery. Basing your minimum delivery cost on your average order value will help stop free shipping eating into your margins.
Offering shoppers a wider choice of payment options means more customer needs met and fewer sales missed, but ecommerce retailers should be optimising their checkout process to meet the key needs of their customers. With card payments dominant in the UK and all European shoppers rating convenience (35%) and speed (29%) as their two of their top three payment priorities, merchants need to be providing checkout processes that streamline card payments for UK shoppers.
Limiting the number of steps to checkout and offering a guest checkout option can be the first steps to reducing abandoned cart rates for ecommerce retailers. Additionally, merchants can make card payments easier for customers by providing the option to save card details. As well as promoting an easy and quick checkout experience in general, this option can encourage your customers to create an account and inspires repeat purchases. Amazon is perhaps the most well-known example of an easy checkout process, reducing the entire experience to a one-click checkout.
While the UK continues to outpace the rest of Europe in online shopping frequency and total online sales, overall growth has slowed in recent years with Germany and Spain now experiencing growth at a faster rate. For ecommerce retailers looking for growth opportunities in the UK, mobile might be the answer. UK online spending via mobile is the fastest growing in the EU at 35.6%, compared to just 11.5% growth in overall online retail sales between 2016 and 2017.
Google has been prioritising mobile friendly sites in search results since 2015 and continues to refine their algorithm. Whilst most retailers have a mobile offering, the growth of mobile ecommerce presents emerging opportunities that retailers should look to take advantage of to stay ahead of the competition and meet growing consumer demand.
Progressive Web Apps is just one example of how mobile growth has led to retailers looking beyond basic mobile-friendly web design. Taking inspiration from the superior experience of mobile apps, PWA’s use the latest web technologies to enable mobile browsers to work offline, send push notifications and work just like an app. Websites like AliExpress have put mobile first with their simple web design and now take advantage of PWA’s for their mobile experience. Forbes has most recently updated their mobile site to the PWA format, speeding up load times from as long as 12 seconds to just 0.8 seconds.
If a Progressive Web App isn’t a suitable solution, retailers should look to implement the key aspects of PWA’s on their website, including faster loading times and the simplified user experience. Optimising for mobile could meet the current and future needs of your customers as well as keep you ahead of the competition.
Protect your customers
When it comes to online shopping abroad and paying online in general, the UK is not alone in its fear of fraud. Ecommerce retailers that fail to inform their customers of their security measures or fail to maintain security measures such as SSLs, will pay the price. Merchants should regularly review their security measures and should be clearly informing customers about security practices to encourage trust.
As a key barrier to purchasing, security and fear of cybercrime are now at the forefront of ecommerce. Subsequently, most ecommerce platforms now offer merchants a range of advice and information about protecting from malware and cyber-attacks and have taken steps to improve their own security. Regular updates and patches for Magento merchants make keeping secure easier than ever.
Target your customers
Consumer insights should be used to guide when and how to target customers. Identifying your bestsellers, items frequently bought together and when customers are most likely to shop online are some of the most basic & effective ways to target your customers. Although simple, this data can help retailers reach and appeal to more online shoppers and should form the foundation of marketing activities.
Along with the rest of Europe, UK online shoppers spend on clothes and footwear (48%), tickets (34%), electronics (33%) and books (31%). To maximise sales, ecommerce retailers offering a range of products across several categories should focus efforts on popular items. Similarly, with most online shoppers purchasing weekly rather than daily, retailers should look at peak times during the week to target their customers. Drilling down into consumer data from Google Analytics and profiling through social media can reveal when your customers are most active and engaged, highlighting when to target for maximum impact.
Savvy consumers, savvy competition
The UK ecommerce market offers opportunities and growth for ecommerce retailers, but a big pie doesn’t always guarantee a big slice. As online spend increases so does the amount of competition. Retailers will need to be more creative and innovative to cut through the noise and keep consumers engaged. With convenient delivery, express payment and sophisticated mobile first design now commonplace, merchants should continue to adapt their digital marketing strategy and take advantage of emerging opportunities to stay ahead of the competition.
If you want to know more about putting these practices into action, or would like to find out how to improve your digital marketing strategy to engage more customers, contact one of our team today.