With the UK payments association, APACS revealing that Brits are set to spend over £5 billion this Christmas, e-retail is continuing to be a vital sales channel for businesses. However, new research from the US suggests that online sales are beginning to level off because companies are “overly focused on innovation while ignoring the basics”. Tim Hoang reports on how companies could be doing more to improve their online shopping experience.

Earlier this year, The New York Times reported on how online sales had begun to “lose steam”. Despite online spend growing by around 25 per cent year on year, a new study by the New York-based consultancy firm, Future Now has revealed that this slow down in growth is due to businesses failing to implement the same customer focused offline shopping experience onto their respective sites.

Future Now sent mystery shoppers and experts in online conversion to over 300 retail websites to analyse how much emphasis businesses placed on the customer experience. The 2007 Retail Customer Experience Study assessed the customer experience of the websites based on 69 different criteria and took into account amongst others, the ease of use, quality of images and convenience.

The findings reveal how businesses still have plenty of room for improvement - the top-rated site only scored 67 out of a possible 100. Other findings from the research showed how companies are not providing customers with what many would perceive as a basic prerequisite of any online shopping experience. 61 per cent of the sites reviewed did not offer any information on the product page regarding in stock availability and only 58 per cent answered email queries within 24 hours.

Brand and design agency, Brandhouse feels that consumers are turning away from online shopping because businesses are failing to take advantage of the technology available to provide the same emotional stimuli associated with shopping offline. “Ultimately shopping is an emotional experience and this is something online shopping is currently failing to effectively provide,” said Mark Wickens, Chairman and Creative Director at Brandhouse.

“Most online experiences have been built around ease of navigation (which is of course vital) but on the High Street we aren’t paraded up and down row after row of goods, we are treated to a retail experience. One website that does this well is the fashion site ASOS.com: after selecting clothes of interest, shoppers can click on a short film of a catwalk model wearing the garment to show the wearing experience.

Many retailers treat their web presence as second in importance to the High Street experience in terms of the effort they put into customer experiences. Being simple outweighs being engaging in their priorities.”

Tony Perry, managing director, Saveoo, the reverse auction site believes that while implementing a more customer focused experience is a key factor if online shopping is to continue growing, businesses should also be looking at introducing new experiences that their offline stores cannot offer. Saveoo claims to put the consumer at the centre of its sales, forcing retail sites to compete to provide the lowest prices.

"Saveoo reverses that online shopping experience by empowering the consumer, as it is the dealers who compete against each other to offer the most competitive price. Once the bids are in, the buyer can pick and choose which dealer and price they want or simply walk away,” said Perry.

While the study concluded that customers will vote with their wallets for companies “that have an intense focus on satisfying their needs”, Mario Thomas, co-founder and managing director of digital agency Chapter Eight is not convinced that online shopping has reached its peak.

"I’m not sure that online sales are levelling off, we’ve just had our biggest year ever with our clients - e-commerce is 400% up year to date on the same period last year. In fact, on Monday at 1:09pm for 60 seconds over £767,500 was spent online, making Monday 10th December 2007 the busiest EVER online shopping day.

Further evidence of the surge in online is the predicted total of retail sales online in the festive three months hitting over £17bn – an increase of over 82% on last year.

So I think I disagree that e-commerce spending is levelling off. If it is it is just the run down to Christmas, but it will definitely recover after Christmas - especially with all those brand new broadband connections coming online," said Thomas.