European Consumers Move Online. Will Your Web Site Keep Up?

Recession drives consumers and companies online
Businesses throughout Europe are worried about the long term impact of the global financial crisis as consumers around the world are reducing their spending and watching their pennies much more closely.  As a result, many organisations are looking to reduce expenditure and this increasingly means placing a greater focus online and investing in Web sites over physical premises.  As budgets are slashed across all sectors, moving resources to the Web is an effective and economical way to reduce overhead.

Furthermore, the Internet continues to grow in importance as more and more potential customers first research a company’s products online before making the decision to purchase and do more price comparison shopping prior to an actual purchase.  In the case of the UK 65% of online users research products online before buying online, and 56% research products on the web and then purchase on the high street. Since the company Web site is often the first port of call then, it is crucial to make sure any visitors are left with a positive impression and are able to quickly find the information they are looking for. However, running an effective Web site is an ongoing task and requires consistent and ongoing investment. 

To stay ahead many businesses are adding new applications, features and more third-party content to their sites every day, thereby forcing a more rapid application development cycle.  Complicating matters further is the fact that complex technologies – such as AJAX and Flash – that provide the much wanted personalisation and interactivity make maintaining websites high performance levels even more challenging.

What’s the Impact?
Yet, many organisations are so preoccupied with developing the styling of their site, that they crucially overlook how their Web sites will perform in the real world and the end-users’ experience.  But, outages, glitches or just a site that your customers find difficult to navigate can all significantly damage revenues and brand image, forcing existing customers to buy elsewhere, and discouraging first-time visitors from ever returning.

For retailers, the impact of the credit crunch on the high street is very pronounced – in the UK, several leading retailers suffered their weakest sales on the high street last Christmas.  However, in contrast, the same shops recorded stronger online sales when compared to the same period the previous year. 

The situation is similar in Germany – in 2008, German consumers spent 13.4 billion Euros online and the sector is predicted to grow 10% in 2009 according to Bundesverband des Deutschen Versandhandels, a trade group for the e-commerce and mail order business.  The growth in online retail is not surprising given that the Web presents not just a more convenient experience for many shoppers, but also an easy way to watch every penny as the recession deepens.

In France meanwhile, according to a study published by the Fédération du e-commerce et de la vente à distance, the French E-commerce federation the number of consumers buying online rose by 2.5 million in 2008, to just over 22 million. In addition, 53% of the firms polled by Le Journal du Net reported levels of repeat business (customers returning to purchase again within 12 months) up since 2007. A similar proportion (52%) had found conversions rising. The average order value also rose in 2008 for 46% of these online merchants, while 30% said it had stayed the same.

To capitalise on this growth, retailers, like all businesses with an online presence, need to invest and make sure their Web sites are up to scratch and able to cope with growing visitor populations.  The same is true of all websites, but the effect is particularly pronounced in the retail sector at the moment.  Some people have speculated that the internet will soon replace window shopping due to its convenience and the fact that it is easily accessible – more and more consumers are being driven towards online shopping in a bid to avoid the hustle and bustle of the high street.

Online Retailers Performance – The winners
In the run-up to Christmas last year, Keynote Competitive Research, the industry analysis group of Keynote, monitored the technical performance of the top retailers’ Web sites in both France and the UK, measuring and ranking the sites in terms of responsiveness and reliability.  Using Keynote products which utilise Internet Explorer to provide a true end-user perspective of Web performance, it was possible to gain full visibility into the performance and availability of Web transactions.  In both countries, the results varied considerably with some retailers consistently topping the rankings while others suffered severe outages. In the UK, House of Fraser, John Lewis and BHS all performed consistently well, while in France the winners were Darty, Rue du Commerce and Toys R Us.  Other major high street brands that you would expect to have a strong online presence suffered the consequences – for example, HMV in the UK experienced several outages, with the home page taking almost 14 seconds on average to load one week.  In France, some sites were only available 89 percent of the time during the first day of the Christmas sales – again, a missed opportunity for the retailers concerned.

At such a busy and important time of year for the retail sector, such problems result in a significant loss of revenue and put off customers when they come round to doing their Christmas shopping later this year, as one bad experience is often all it takes to turn a consumer away for life. 

Companies should consider strengthening their online presence to ensure their sites are able to cope with an increase in visitors, particularly at peak times.  To guarantee this, it is essential to undertake comprehensive and ongoing test and measurement of the sites, including load testing to prepare for peaks in traffic at the busiest times of the day and year.  Failure to do so could results in online revenues declining and frustrated visitors turning to competitive sites providing better performance for the end user.

To avoid these consequences, companies need to set themselves two key objectives – firstly, understand what is required to match the online capabilities, usability and performance of their key online competitors, and secondly secure the investment necessary to raise and maintain the standard of their online customer experience to ‘best-in-class’ level.  An online presence is only going to become more important, especially as the recession continues to bite and the cost of running a business becomes prohibitively expensive for some.  However, the online customer is often more demanding and expects the experience to be as smooth and straightforward as possible.  As a company website ultimately represents the company brand, it should be given the same care and attention as its products, as it can be the first port of call for both potential and existing customers.  

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