Online retailers who fail to make the most out of their e-commerce offerings are losing out on £2.3bn in revenue each year, according to a new report.

'How to pull customers online', a report produced by Verdict Consulting for Webloyalty, argues that many online retailers are allowing shoppers to slip through their fingers. The report calculates that an e-commerce site converting just one per cent more visitors into paying customers could generate an additional £678m in revenue.

Also included in the report is an assessment of strategies for winning customers in the competitive online environment. It examines six key stages of building successful online relationships, including how to attract customers, how to sell to them and how to increase their loyalty.

Despite some gloomy findings, the report goes on to argue that the online retail industry is set to grow 129 per cent in next five years. Internet sales currently represent 6.7 per cent of all retail spend in the UK, equal to £19.4bn. By 2012, Verdict forecasts this to reach 13.6 per cent of all UK retail sales, with a value of over £44bn.

However, the research shows that levels of online loyalty are 10 per cent lower than in physical shops.

Consulting director at Verdict Neil Saunders comments: “Standing out from the crowd on the internet has become more of a challenge. Online retailers have to work harder than ever to attract consumers. This is not a challenge restricted to smaller sites - big players face the same issue. They all need to be more creative about customer acquisition. Old methods of driving traffic still have their place, but are increasingly being replaced by new strategies.”

Webloyalty managing director Europe Martin Child says: "Offline, retailers have become sophisticated at utilising space in their stores to generate incremental revenue. It is all about leveraging their high levels of footfall. The same principle applies online, where web traffic can help generate much-needed incremental revenue for retailers."

Via: Precision Marketing

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