The trajectory of consumer spending has been changed significantly in the past decade. With various events including the Covid-19 pandemic, Brexit, and geopolitical unrest, the concept of globalization has been in rhetoric. As a result, the inflation rates have been increased and the supply chain has been disrupted, making the e-commerce sector thrive. Nonetheless, the e-economy, including E-Commerce in particular has survived through all the natural and anthropogenic challenges.
This article will delve into the early signs of economic growth and examine how UK e-commerce merchants are adapting and performing in this evolving landscape.
The state of UK retail: eCommerce at a crossroads?
The UK economy experienced a technical recession in the latter half of 2023, primarily attributed to a significant 0.9% decline in retail sales during the fourth quarter, as reported by the Office for National Statistics (ONS). However, the online market prominence is increasing as evidenced by the RetailX UK Top500 2024 report. This landmark study reveals a significant shift in the industry, with many retailers transitioning from a store-centric to a digital-first approach. The report also underscores the growing influence of brands and marketplaces, with the former now constituting half of the Top 500 and the latter dominating online traffic. This period of unprecedented growth has set a new benchmark for all players in the UK e-commerce market.
Over time, digital commerce in the United Kingdom is expected to expand even further. So, how do you exploit this market’s potential? Online retailers who wish to be competitive in this industry must prioritize customer value and experience optimization throughout this time.
10 ways UK online retailers can drive consumer spending
Although the RetailX Consumer reports have given multiple reasons for UK shoppers to shop online, some are discussed here in detail.
Obsess your product line
The goods and services you provide are, of course, a reflection of your business. Whether you’re shipping low- or high-end things, you should always ask yourself if your inventory reflects your overall plan. Does your stock listing make sense or is it completely chaotic? Make sure your product listings are easy to read and clear if you want customers to buy from you and come back.
For Instance, to create an effective product listing page, ensure it has all the relevant categories, including easily navigable category names, high-resolution product Images, a filter menu with all essential filtering options, a sorting menu, and a comprehensive product description, to increase your visibility and conversion rate.
Re-focus on your value proposition
Customers will interact with your product or service in multiple ways. An organization’s website, product descriptions, email marketing, loyalty programs, promotions, and everything in between all contribute to the overall narrative of the brand. Think about these important parts of the customer journey and how your messaging and channels did concerning them. Doing this exercise will help you refocus on successful streams while suspending or eliminating unsuccessful ones. It’s an easy approach to remove wasteful streams while improving consumer spending.
Explore new sales channels
The volatility of customer spending suggests that you should reconsider your current sales channels and consider expanding into other online markets. By trying new things and getting your items in front of more people, you can boost your profits. Streamline integrations, increase delivery possibilities, and enhance areas like order processing and label generation with sophisticated marketplace shipping software and a careful selection of a delivery partner.
Provide a subscription option
Customers who want more say over their spending and businesses who want more consistent income can both gain from subscriptions. Three in four people in the UK (73%) have at least one subscription. Moreover, the subscribers in the UK spend £2 billion yearly, even though the plan needs to be adjusted because of the cost-of-living problem. Many other subscription models are available to us now; some charge a fixed fee, some charge per month, and others bundle basic and premium features. Consider your options and what’s required if you want your online subscription store to grow.
Expand into new markets
Global retail e-commerce sales rose to $4.4 trillion in 2023, up from $1.3 trillion in 2014. In short, that means 20% of global retail sales are now online. By 2028, Forrester forecasts that global retail e-commerce sales will grow to $6.8 trillion and capture 24% of global retail sales. As a result, online retailers in the UK will have a multitude of opportunities to profit from demand in other nations. Kun fulfilment is one example of a consolidator that helps streamline export rules and international parcel shipment. They offer a variety of international parcel delivery choices, including economy, express, fully tracked, and untracked, as well as a single point of contact for collection.
Offer preferred payment methods
By offering and directing customers to their chosen payment methods, you may save them time and reduce cart abandonment. Research from RetailX Consumers shows that over half of all UK online shoppers have used a third-party checkout service in the past year. Concerning the selection of an online retailer, 49% of those people said that a preferred form of payment is a “very important” factor. The customer experience, conversion rate, and likelihood of trust and loyalty are all positively impacted by providing a preferred payment method. Traditional and well-known methods, such as PayPal, credit cards, and debit cards, continue to see heavy usage. However, you should also consider what individuals in other nations appreciate if you wish to boost your sales abroad.
Have an easy and reliable returns process
Parcel returns are an essential part of the buying process for online customers since as many as 71% of UK consumers return items at least sometimes. The need for free returns is being partially diminished as retailers change their return policies to include charges. Nevertheless, the desire is still present. The most important thing is how easy it is to use. To make things easy and transparent for everyone involved, the best way to return an item would be for the consumer to be able to either drop it off at the store or arrange for its pickup from their house. There is a direct correlation between an easy return policy and an increase in upselling opportunities and consumer loyalty for online stores.
Maintain online presence and discoverability
Unsurprisingly, top UK online merchants are investing heavily in marketing and IT to pique clients’ attention and encourage them to make purchases. In today’s fiercely competitive e-commerce market, businesses of all sizes must maximize their digital assets to boost exposure and traffic. Industry standards like Shopify and WooCommerce are complemented by tools like Trellis and Route, which provide advanced features such as dynamic pricing, listing generation, AI-powered content creation, and more.
Optimize your UX and CX
Enhancing the CX (customer experience) and UX (user experience) should be your top priority if you wish to retain clients and expand your market share. Customers will visit your business in search of a dependable and effortless process. However, where should I begin? The majority of customers feel that retailers should prioritize the checkout process to improve the shopping experience (51% of consumers believe this according to the Unified Commerce Benchmark for Specialty Retail). keeping navigation easy, keeping product availability apparent and accurate, and customizing search results are further ways to enhance your CX farther up the funnel.
Bottom Line
Online selling continues to thrive despite global challenges, making it crucial for e-commerce retailers to analyze consumer behavior and strategically influence buyers’ spending habits. Learn how Global Retail E-Commerce Sales are expected to soar to $6.8 Trillion by 2028.
