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Recent figures published by BRC-KPMG give the UK retail industry another grim reality check.

According to the report, there was only a small 2.3% rise in total UK retail sales numbers during February 2012, a significant slowdown when compared to January (where sales grew 11.3%) and 2011 (where overall growth was 18.5%).

While it isn’t exactly breaking news that the UK retail industry struggling, the fact that online sales are slowing down too is far more startling.  

E-commerce has long been a key driver for retail growth in the UK. So any sign that this catalyst, upon which many retailers have been building their business strategies, could be running out of steam is real cause for concern.

So, what does this all mean for future e-commerce strategies?

The end of e-commerce?

While the BRC figures might suggest that ecommerce growth is now plateauing, all is not lost. The revival of the British high street is unlikely, but e-commerce business is still a safe – and, indeed, crucial - investment for retailers.

What we are seeing is not the end of e-commerce, but its inevitable maturing. 

In order to continue to succeed in this changing digital world, I think there are three areas where ebusinesses need to focus:

1. Customer experience

Cynical voices have already proclaimed that the end of e-commerce is in sight, but the plain truth is that the market has simply reached its natural saturation point.

And with so many players now fighting for their stake of the e-commerce pie, the focus for retailers must now change.

Being there is not enough anymore. The e-commerce experience you provide has to be second to none in order to win in this highly competitive space.

2. Monitor increasingly savvy customer behaviour

As customers become more familiar and comfortable using digital channels, the features and functionality they will expect and demand will change. 

For example, you might find more customers start to take pictures of your products instore and then share them with friends on social networks before making a purchase at home online.

Understanding behaviour like this and adapting digital channels to match it will provide a number of new opportunities and will benefit customers too.

3. Invest in new digital channels

E-commerce might be going through a consolidation phase, but other routes to market for retailers like mobile and social media are only just getting going. This presents yet another challenge.

As more devices come into play and retailers are challenged with creating destinations on mobile devices and even on social networks like Facebook, the importance of unifying a customer’s experience of your brand becomes even more important and yet even harder.

This is the year when retailers need to reassess their approach to e-commerce. Any retailer that is committed to taking its ecommerce strategy to the next level needs to provide a seamless multichannel customer experience to avoid missing out.

And, if you follow the steps above, there is no reason why your business can’t be one of the winners when the BRC figures come round again.

Geoff Galat

Published 5 April, 2012 by Geoff Galat

Geoff Galat is Worldwide VP of Marketing at IBM Tealeaf and a contributor to Econsultancy. 

25 more posts from this author

Comments (3)


Nadeem | Azam Marketing

"According to the report, there was only a small 2.3% rise in total UK retail sales numbers during February 2012" - a 2.3% growth in one month, the shortest month of the year, is a huge growth percentage. While it's natural that ecommerce growth will plateau, it's important to put things in perspective: if most readers of this article got a 2.3% growth in salary each month they would be thrilled to bits.

over 4 years ago

Andrew Lloyd Gordon

Andrew Lloyd Gordon, Digital Marketing Expert, Speaker and Trainer at New Terrain Limited

I'd agree that it's difficult to draw conclusions from just one month's figures. Especially with regard to the idea that e-commerce is plateauing.

Surely, we'd need a series of reports over several months and even years to reach that conclusion?

If nothing else, as all retail sales suffer, surely e-commerce will also slow down?

Is it not possible, that when retail sales start to pick up, e-commerce levels will also rise? When people have more money and more confidence, they will buy more through all channels.

over 4 years ago


Mark Quinn-Newall, Consultant at E-commerce

Not sure taking single months figure especially Feb 2012 , (was it adjusted for 29 days, unlike 28 day in 2011) helps make any statistically valid case for overall internet future growth projections, however the points on differentiation with a more mature market are valid...but should be best practice anyway even in fast growing market situation...

over 4 years ago

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