IKEA’s new UK CEO, Gillian Drakeford, knows she needs to improve her company’s online performance. Currently only 10% of IKEA’s sales come through online. Given the fact that currently 12% of all UK sales are online and the small number of stores that IKEA has, this is a startlingly low figure.
Drakeford and IKEA are not alone. Many UK retailers all know they need to go omni-channel – after all within five years more than 20% of sales are likely to be online. But how well are they doing it?
Some are doing it very well. For example, when Burberry boss Angela Ahrendts announced in mid-October that she is quitting to join Apple the news wiped nearly £536m off the company’s value. That was testament to the success she has had building the retailer’s omni-channel strategy.
The Burberry website has a sophisticated recommendation engine, and the company invests 60% of its marketing budget in digital campaigns such as live streaming of catwalk shows. This has paid off with soaring sales over the past few years. In just the first quarter of 2013 they rose by 18% with a company statement saying ““footfall was soft offline but grew strongly online”.
John Lewis is another company that clearly recognises the importance of omni-channel. While its September 2013 trading update was somewhat flat its online sales soared 19.9% year-on-year. Its click-and-collect business is performing particularly strongly.
Indeed for many companies it is the delivery aspect they need to tackle above all else. A recent survey from Which? asked more than 14,000 members their views about the online shops they had used in the previous six months. One-third of all negative responses involved delivery. Top delivery irritations included items turning up damaged (9%), which was the main gripe, followed by deliveries not turning up (8%), inability to choose a delivery slot (7%) and delivery outside the agreed time (6%).
That survey also ranked leading retailers for their omni-channel performance. Languishing in bottom place was B&Q, criticised by customers for having a hard-to-use website. One B&Q shopper told Which?: “I had a truly terrible experience with shopping online. The stock availability was incorrect and the whole customer service experience was rubbish.”
2012's worst performer, PC World, crept up to second last. One PC World customer said: “The whole process was long and not to the standard of other online companies I use. I had to ring to check when the order was coming.”
Even some of the retailers heralded as e-commerce leaders need to improve their performance. Go to Marks and Spencer’s website and try to buy food, furniture and clothing in the same basket. It won’t let you. It insists you buy them all in separate baskets. How many shoppers are put off by this and abandon carts or go elsewhere?
Those retailers need to look into this and take immediate action. Single channel retailer is, quite simply, redundant. The experiences of Woolworths, Comet, Jessops and HMV should sharpen the mind of any retailer that believes it can delay any longer. Succeeding in omni-channel requires investment, but it is investment no retailer can afford not to make.