Newcastle, Tyne And Wear United Kingdom (PressExposure) October 28, 2006 -- With more than 63% of the UK population now online and rapidly becoming experienced surfers, simply having a web presence is no longer enough for the majority of businesses.
Under the wave of genuine growth in the dot com sector - where eCommerce is now soaring and set to soar even further - companies must now step up their online real estate, making it a fully integrated part of their total offering. Indeed, rather than simply matching off-line offerings, eCommerce brings businesses an invaluable new dimension, which will help them maximise their revenue potential.
The figures speak for themselves and illustrate how online audiences are continuing to grow and how, as they become more sophisticated in their internet usage, so too do their expectations of online offerings. For example, more than 73% of internet users have been online for at least three years and 18.2 million people in the UK are now using broadband â up 49% on last year.
Online retail is rocketing. 18.5 million of the UK population are now shopping online, spending Â£19.2 billion online in 2005 â an increase of a third on 2004 - with Â£5 billion spent during the Christmas period alone. 86% of UK consumers also use the internet to research and compare prices of products and services that capture their interest, whilst 13.3 million do their banking over the internet â indicating a major shift in consumer purchasing behaviour.
Embracing these advancements, North East brand technology and web design company, TH_NK, is working with successful companies, such as Northern Rock and Northumbrian Water, to help them build their digital business â and is already witnessing many of its clients see an increase in profit year on year. Online communication is increasingly the way customers want to deal with businesses and TH_NK is at the forefront of developing innovative solutions to help brands make this move online.
Why is eCommerce on the increase?
Visibilityâ¦Accountabilityâ¦Cost Effectivenessâ¦Securityâ¦Level Playing Field â¦Online Marketingâ¦
As audiences move online, businesses are having to consider digital communication as a means of customer acquisition and retention. The added advantages of relatively low set-up costs and the prospect of national or global exposure have led to a solid shift towards eCommerce.
This growing trend has also led to dramatic technical advancements in analytics, metrics and accountability. eCommerce businesses can now track their key performance indicators with much more precision, and in real time, which ultimately leads to a more focused business and a healthier margin. This is why TH_NK has partnered with world leading web analytics provider, WebTrends, which offers the most advanced and comprehensive analytical reports on consumer usability and behaviour, conversion rates, key performance indicators and return on investment (ROI).
Businesses are not only using digital technology as a form of customer acquisition, but are also recognising the huge potential in digital communication as a means to retain one of its most valuable and lucrative assets - its existing customer base. eCRM (Electronic Customer Relationship Management) is therefore a key growth area within eCommerce. Not only does eCRM allow businesses to significantly reduce the cost to serve, it is also an ideal opportunity to maximise revenue by cross-selling or up-selling further products to existing customers using advanced digital technology.
e-CRM also enables brands the opportunity to provide their online customers with a highly personalised and secure service, which now rivals face-to-face communication. This is not only more cost effective, but also allows true, long term online customer relationships to be developed.
For SMEs and individual entrepreneurs, eCommerce also offers a level playing field on which to compete in a national or global market. Devote enough energy to developing an eCommerce website and an SME can compete with - and even out-perform - a larger competitor.
Businesses can no longer afford to miss out on capitalising on this phenomenal growth while their online competitors reap the benefits.
The Growth of Online Marketing
Where the audience goes, so does the advertising spend. As figures show, this makes online marketing one of eCommerceâs most powerful growth areas.
UK digital advertising increased by two thirds in 2005 to almost Â£1.4bn and is now driving the market, leaving other mainstream media in decline. Digital now represents 8% of all UK advertising and is forecast to be over 10% by the end of 2006. In 2004 it was 6%. This illustrates how digital advertising has really grown up and is now taking the lead.
As original founder of Lever Brothers, William Hesketh Lever, said, 50% of all advertising is wasted, but he didnât know which 50%. This is no longer true. Digital marketeers can now monitor the true return on investment (ROI) of their online marketing channels in real time.
If something isnât working they can identify it and change their campaigns accordingly at a momentâs notice. Ultimately, this means they can focus on the advertising that they know is the most effective and minimise wasting spend on any âgreyâ areas.
In particular, âsearch marketingâ has seen phenomenal growth, which not only offers the ability to track true ROI but also offers the advantage of being the most targeted form of advertising available to us today. Marketeers can now advertise in âsearch resultsâ pages allowing them to target a sector of consumers that they know are already receptive to their offerings.
Digital technology has also lead to the growth of affiliate marketing, which offers online merchants the ability to develop a limitless number of virtual sale representatives across the internet. This virtual sales force is paid on commission, based on sales they generate for the merchant. Affiliate marketing also offers merchants a low risk method to advertise online while affiliate publishers have the chance to profit from their online real estate.
Assuming that online audiences will continue to grow, we can expect growth in additional spend towards online brand positioning, which at the moment is relatively uncompetitive.
Businesses are waking up to online marketing as a real return on investment and are therefore searching for experienced agencies that can offer this knowledge, expertise and in-depth understanding of this fast changing media sector.
The future of eCommerce?
The increase in online consumer spending has lead to steady growth in the dot com sector. Calling it a âdot com boomâ may be the wrong analogy. It is not a boom waiting to deflate, but rather a steady and healthy growth, fuelled by a growing online market and endless possibilities in technical advancements.
eCommerce is expected to accelerate and increase to the value of Â£60bn in 2010, accounting for 20% of all UK retail spending.
It may have started as online mail order for books and CDs, but todayâs dot com success is just finding its feet as eCommerce is at last developing in its own unique directions and is even driving the creation of new sectors.
After books and CDs came the travel business and now a huge percentage of holiday, flight and hotel bookings are made online. The growth in online banking has also developed trust in online security. And then came ring tones and music downloads for the i-pod generation, which will change the face of the music industry forever. And now, feature film downloads are likely to create a major shake up in the cinema business while the huge explosion of gaming and gambling online in the past two years has created a completely new business sector.
This is really just the beginning â the way we do things is going through revolutionary change. The current buzzword is âconvergenceâ â the merging of technologies between the web, mobile and personal devices. We have already seen advancements in âconvergentâ technologies with the web being readily accessible through small portable devices such as hand phones, PDAs and laptops. Whichever way you look at it âconvergenceâ means more people online, more of the time. The future of eCommerce looks set.
As a result, businesses are looking for digital marketing agencies to take their web presence to the next level â it is no longer about building a good looking website, companies need to work in complete partnership with their agency where an intimate understanding of their business goes hand in hand with an in-depth knowledge of their target customersâ lifestyles, aspirations and buying habits. From here, agencies must be able to implement creative and truly engaging branding strategies to help clients through the all important customer acquisition stage, while also leading the way in marketing techniques to ensure customer retention. It is ultimately the agencies âin the knowâ that are helping companies build a robust online business that moves as fast as the digital world.
Sources: IAB/PwC report on 2005 online and Internet Advertising Bureau â 2005 report.