Xmas shopping online:

behind the numbers

Holiday season sales results show winners and losers in the online game…

BNZ’s New Zealand Online Retail Sales report, released this week for the full Christmas period, shows that online sales are booming. But further analysis of actual sales data shows that success is being enjoyed by the more sophisticated operators, both here and abroad, while laggards struggle to compete.

This, said James Gilbert, director of ecommerce specialist Solutionists, points to the necessity for ‘maturity’ in online retail platforms. “Success in the online world is becoming increasingly challenging owing to the sheer volume of competitors. The winners tend to be more sophisticated; they invest in the technology that underpins their websites and they get the return for it,” he explained.

BNZ’s report said online retail spending was up 14 percent compared to December 2015, behind November which was up 19 percent as the peak month for purchasing goods from overseas sites, with many customers wanting delivery in time for Christmas.

Online retail spending at offshore sites was up 17 percent; the bank said strength in the NZ dollar made imported online goods cheaper, driving those sales. BNZ said this marked the 13th consecutive month of double-digit growth, outstripping bricks and mortar growth at 4 percent.

But the range of success is very broad, said Gilbert. “In a competitive environment – and make no mistake, the online shopping boom has made for an exceptionally competitive environment, where local and international sites are vying for the same dollar – not all boats will float on the rising tide. Consumers are increasingly sophisticated and if a great customer experience isn’t delivered along with other fundamentals like low prices, extensive range and rapid delivery, they will go elsewhere.”

Analysis of 2016 results from Solutionists’ own customer base, Gilbert revealed, showed what differentiated the best performing from the average was good products, good management and continuous re-investment. “The top 10 performing stores averaged 53 percent annual growth year on year,” he confirmed.

Solutionist’s platform supports around 70 sites, including the likes of Barkers, Smith & Caughey’s, Burnsco and Nest.

What is more, Gilbert pointed out, was that the top 10 stores spent an average 2.5 percent of their revenue on development of their sites, which supported the 53 percent increase in revenue.

“We’ve seen it in the field: among the ecommerce operators we work with, those who are investing in their platforms and technology are winning,” he said.

Asked what ‘maturity’ means in the context of ecommerce, Gilbert explained that it is making use of best-of-breed and best practice technology. “We’ve seen a lot of organisations which have built a state-of-the-art ecommerce site which was great 4 or 5 years ago, but which doesn’t compare with the today’s market leaders. And customers notice.”

They would, added Gilbert, because of the inherently ‘international’ nature of the internet – and also owing to the overwhelming presence of major ecommerce giants, like ASOS, Amazon and,  closer to home, The Iconic. “These are your competitors and your benchmarks,” he said.

Maturity benchmarks are top of mind for Gilbert as his team has just developed an ecommerce maturity assessment tool. This allows both retail and B2B ecommerce operators to evaluate and benchmark the functionality of their sites, and identify opportunities for improvement. Gilbert advises that the top 10 performing sites average score sits at just over 90/100. Readers interested in measuring their maturity ranking are welcome to complete their own assessment (note that no user registration is required).


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Donovan Jackson

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