Since the boom of E-commerce in the early noughties, online shopping has become the norm for many, with £250 billion being spent online between 2000 and 2010. Going back to 2001, only six million people in the UK were purchasing goods from the internet, spending around £1.8 billion. Now in 2010, this figure is expected to surpass the £58 billion mark and is evident from the £4.4 billion that was spent in June 2010 (an 18% increase from what was spent in the same month the year before). IMRG and Capgemini predict that the online retail market is set to reach £123 billion by 2020, an increase of 110%. Although annual growth is predicted to slow down, dropping to an increase of 12% per annum between 2009 and 2014, as opposed to the 35% increase that we have seen over the past 10 years.
On average, 40% of UK consumers will buy online once a week, spending an average of £71 each month. Not surprisingly, the two main reasons that people have turned to the internet to shop is price and convenience. Additionally, the appeal of free shipping, price guarantees and customer reviews also hold a heavy influence too. However the main deterrents for making purchases from certain websites are predominantly poor navigation, concerns about security and overly long check out processes.
Verdict, an online retail analyst, predicts that by 2014 the number of online shoppers will increase by 14% to 32.5 million. The markets that are showing the greatest growth potential are the 15 - 24 and 55+ age brackets. Currently, those aged between 34 and 44 spend the most online and accounted for approximately a third of all online sales in 2009.
So what bearing does this have on online marketing?
With more and more money being spent online each year, the importance of search and social media marketing has never been so prevalent during a buyer’s decision making process.
61% of online consumers use search engines to research and ultimately purchase a product online. The vast majority of which will be influenced by the websites that are prominent in the organic search engine results pages, namely those listed on the first page.
The importance and influence that social media has during the purchase decision phase has grown drastically in recent years, especially amongst 18 – 26 year olds. 75% of people in this age bracket who use social media networks take into account recommendations from these websites before purchasing products online.
These figures are in stark contrast to the likes of more traditional online marketing strategies, such as email marketing, where only 36% of people will make a purchase after being prompted by an email. This information is backed up by research by Litmus, an email marketing solutions company, who identified that 51% of marketing emails (of 4 million opened), were deleted within 2 seconds.
Therefore, it is now critical that online retailers to have a recognisable presence in the search engines, or social media (dependent upon their key demographics), coupled with a website that has undergone suitable usability testing, in order to reduce bounce rates and people exiting the website in favour of a competitor.