Distance shopping expert Zendor has followed up its research into the online retail market with a further in-depth study of more than 50 top retailers. The original research highlighted that a large proportion of retailers do not have a transactional website and many are yet to move online. The new study reveals the reasons behind their reluctance and identifies the main cause for concern - Money.
Zendor’s initial research found that a large number of top retailers do not yet have a transactional presence online despite the buoyant market; 75% of those in the home and garden retail sector; 65% in clothing and footwear and 60% in health and beauty have yet to make the move. These surprising results prompted Zendor to try and identify exactly what is behind this ‘nervousness’ about taking the step online.
Zendor conducted discussions with more than 50 retailers who had not yet ventured into online selling and this revealed a common theme – money. Feedback from over half the retailers spoken to included financial concerns; ‘We don’t feel there is sufficient money in it’, ‘It won’t be cost-effective for us’, and ‘We can’t afford it at the moment’. Other reasons included the fact that they had ‘tried before and failed’ or that ‘our competitors aren’t doing it so why should we?’.
The results are surprising because with the online market so buoyant - Verdict research forecasts that the online market will triple over the next five years (e-Retail 2004) – Zendor expected the vast majority of retailers to be at least looking at developing an e-commerce channel. The benefits have been proven by many retailers selling online and include providing customers with more choice and convenience, driving the halo effect (multi-channel shoppers spend more than single channel customers) as well as reducing the risk of losing customers to competitors who are already selling online.
Retailers’ reluctance may be due to the fact that they are more likely to fail if they lack the right knowledge and expertise, particularly in the area of fulfilment – an area that is notoriously difficult to get right. Zendor suggests that for those without the necessary expertise, they can reduce the risks and keep entry costs low by outsourcing to an established fulfilment provider or at least calling on an expert in the field. They should also consider that the lead-time to transactional selling may be up to 1 year – so the costs do not tend to be immediate and can be spread out over that time.
As for those retailers who have tried and failed in the past, Zendor points out that the market has matured substantially over the last 2 to 3 years; online shopping has now become more widely accepted to the point where customers invariably expect it. Many retailers have learned from their initial mistakes, are reviewing their websites, and are once more taking the plunge with renewed optimism and often with different objectives – objectives around improved customer service and relationship building are increasingly common, rather than being purely financially based.
Finally, Zendor’s investigation also found that retailers were reticent about developing a transactional website if their competitors had not moved online yet; despite the opportunity to ‘steal the march.’ Many retailers prefer to focus on store development, with a multi-channel strategy taking a back seat. Zendor feel that this could be an expensive mistake, as there is a lengthy learning curve involved in online or multi-channel retailing for those retailers who are only used to trading via the high street, and waiting until the competition makes a move, could prove costly while the retailer struggles to catch up.
Nick Allen, Zendor Chief Executive, says, “The online retail market is developing fast and retailers who hold back too long now risk missing the boat. It is unlikely that there will be enough room for everyone, so those who are concerned about how much it’s going to cost them to go online should now start thinking, ‘How much will it cost us if we don’t?’
For further press information please contact: Liz Ebbrell, The Scott Partnership, The Old Barn, Holly House Estate, Cranage, Middlewich, Cheshire CW10 9LT Tel: 01606 837787 Fax: 01606 837757 e-mail:
Notes for Editor
Manchester-based Zendor handles a range of fulfilment services for retailers interested in moving into the distance shopping arena. Zendor’s services include consultancy, marketing, e-commerce, customer services, logistics and merchandising. For further information please e-mail visit www.zendor.com or call 0161 237 4900.
Published on: 12:00AM on 24th September 2004