Retailers missing out on potential £9bn additional revenue online
Research whitepaper reveals that UK retailers are still failing to take full advantage of the opportunity that social commerce offers for growthnToklo's latest whitepaper reveals that UK retailers are missing out on a potential £9 billion in additional revenue online. The whitepaper also reveals how user generated content (UGC) is shaping online retail faster than the retailers themselves and how s-commerce is not yet the sum of its parts.
According to figures from nToklo’s work with retailers and brands, the use of UGC and recommendations could account for up to a 27 per cent uptake in sales. IMRG reported that the UK’s online retail spend for 2011 was £68.2bn and this online spend is expected to grow by a further 13 per cent in 2012. Therefore, when you consider that, according to nToklo’s research, half of retailers don’t offer online recommendations to consumers, it can be estimated that retailers missed out on an estimated £9bn worth of additional revenue online last year.
Anton Gething, co-founder & product director at nToklo, said: “The increasing interest in social commerce stems from the natural progression of two trends that have seen tremendous growth in recent years: online shopping and social networking. However, this research shows that social commerce is yet to become the sum of its parts and many businesses are missing out on a potentially significant additional revenue opportunity. In strained times, this additional revenue could provide a much needed lifeline for British retailers.”
The research highlights that ‘social’ is important to UK retailers, with over 90 per cent of those surveyed having a presence on Facebook and Twitter. However, only 65 per cent of retailers’ sites utilise the integration technology these social platforms can offer, such as Facebook Connect. In fact, over three quarters (76%) of the retail sites reviewed also did not have their own social community functions onsite, despite many requiring customers to sign-in to the site in order to make a purchase. Additional findings from the research include:
• 50 per cent of retailers do not provide customers with recommendations through their website
• 73 per cent of those sites surveyed do not offer consumers the ability to actively discover or share recommendations through social platforms
Gething continues: “Presenting users with relevant, timely recommendations has been an understood and valuable part of the traditional retail purchase funnel for a number of years, whether in-store or online. However, with the explosion in social engagement, recommendation content is no longer provided by the retail brand alone and increasingly consumers are seeking out more ‘social’ user reviews and recommendations. Therefore, those retailers in a position to offer a cohesive social experience online will be in a position to take advantage of the potential growth in revenue available to them.”