As the memories of the dot-com crash fade, replaced by a rash of excitement over new web start-ups that pledge to make revenues, it is worth noting that, more prosaically, online retail has enjoyed broadly consistent growth.
Monthly online sales have increased 2,600% to £2.3 billion since April 2000 and average individual annual spending is expected to break into four figures in the UK for the first time in 2006, according to the Interactive Media in Retail Group (IMRG), the online shopping industry body. The 10-week run-up to Christmas 2005 saw online spending jump 50% over 2004, as British shoppers spent almost £5 billion online.
For every pure online venture such as Amazon, Dabs and Figleaves, there are many more bricks-and-mortar retailers who have successfully expanded onto the Web. How have they managed to avoid becoming casualties of the revolution that many predicted?
Brand and reputation are clearly an advantage which more established chains have over their newer online competitors. A survey in January 2006 highlighted John Lewis as the UK’s favourite shop; that customer loyalty extends to the department store’s website too. In December 2005, johnlewis.com celebrated sales of £100 million for the previous 12 months, as customers sought to avoid the in-store queues for top-sellers such as iPods and flat-screen TVs.
Ian Tansley, head of IT and web at John Lewis Direct, the business unit responsible for online and catalogue sales, says branding is “probably the biggest reason people shop at John Lewis online and the website backs up that brand with great service and great products.” It also helps assuage security worries, he adds.
Ease of use
But Tansley believes ease of use is also vital in converting clicks to cash, using good content and photography. “We aim not to over-complicate things,” he says. “‘Simple’ isn’t really the right word, but we want to create a very straightforward shopping experience – and we aim to avoid complexity in the IT systems supporting it as well, so we can cope with peaks and scalability.”
Usability testing, internally and with the public, found that the maxims that have served the store so well also apply online. “People didn’t like things pushed in their face – it’s not the John Lewis way of doing things,” says Tansley. “We don’t go for strong promotional activity, we’ve not gone overboard with bells and whistles and extra functionality because it’s not what customers want. They want to see more products and better prices – they just want the basics to work extremely well.”
As a result, very few visitors to the website drop out at the crucial checkout stage. “Accessibility, usability and search engine optimisation are all linked together, we do all three at once,” he says. “The type of terminology, the words we use to describe furniture etc. for accessibility purposes, are the kind of terms we know from experience are being searched on Google.”
John Lewis has 16,000 products available online, however Tansley believes there has to be an upper limit, to maintain usability. With such volume, the website is run as a separate branch within the company, with its own profit and loss – and its own IT function. “It is working very well at the moment and while the business is growing it gives us maximum flexibility,” says Tansley, though he does not rule out it being more closely integrated with the rest of the business when it is more mature.
One area where there has been close integration is the use of the store loyalty card to monitor consumer behaviour. Through analysis of that data, Tansley is convinced that there has been little of the cannibalisation that many retailers feared. “We are not really seeing major migration from [in-store] sales onto online,” he says.
Further reading at Information Age
More on ecommerce: Ecommerce's new dawn
More on search engine optimisation: Standing out from the crowd
More on user interface design: Man and machine