Local retailers battle to become profitable because of lack of insight into the end-user and the cost of maintaining an online retail store, says World Wide Worx MD Arthur Goldstuck. However, some South African online retailers say they are beating the odds.
European retailers are also losing millions on their online retail sites due to mismanagement, says Compuware.
A Compuware survey, conducted by independent research company Vanson Bourne, surveyed more than 200 CIOs in retail and financial companies across the UK, France, Germany and the Netherlands. Additionally, Spark Communications polled 400 consumers.
Key survey findings showed almost a quarter of respondents (23%) estimate they lose up to R21 million from poorly performing transactional Web sites. A further 21% said they were losing about R15.75 million, while another third put their annual losses at R5.25 million.
High costs
Goldstuck says "even the large retailers are battling locally because of the high cost of maintaining a transactional Web site".
He adds that audits of local online retail sites show huge gaps in implementation, content management and transactional processes. Local online retailers also show poor awareness of best practice in Web site strategy, he adds.
Filipe Serralheiro, application performance management consultant at Compuware SA, says international consumers find the mismanagement of Web sites highly frustrating, with 72% stating that if a Web site performs badly, they are unlikely to complete a transaction.
In addition, 68% said that if Web site performance does not match their expectations, they use an alternative site to make the purchase.
Goldstuck agrees: "A high proportion of visitors to transactional sites begin shopping, then abandon their baskets during the checkout process - often because of the complexity of the transaction process."
Making a profit
NetFlorist CEO Ryan Bacher says even though World Wide Worx's information is "spot on" in most cases, some South African e-tailers are bucking the trends described.
He says the country's top online retailers, like NetFlorist, Kalahari and Digital Planet, are all showing excellent growth.
"Although our technology costs are significant, they have not prevented us from reaching a profitable position in our business," says Bacher. "We've been experiencing year-on-year growth of 40% off a relatively high base, and the growth just doesn't seem to stop."
This is in contrast to the "abandoned" baskets findings, he says. "We don't have a big problem with abandoned baskets, and where consumers do experience difficulty, they can call our contact centre and speak to a customer service agent."
Share