At the first E-commerce Expo event in London last month, online retail and marketing experts hailed spectacular growth in the industry. But they also warned that
companies must keep a sharp eye on consumer behaviour, and be more flexible in their e-commerce strategies.

Opening the event with a keynote speech to delegates, James Roper, chief executive of industry body the Interactive Media in Retail Group (IMRG), pointed to recent research carried out by Forrester that predicted internet spending will top £13bn between October and December, putting the UK top of the league of European countries for online retail.

Roper added that bricks and mortar stores are still failing to capitalise on the huge revenue-generating potential of internet retail, explaining that only half of the IMRG’s Hitwise top 50 list of e-retailers were also traditional high street merchants. “This shows just how many are missing out,” he added. “We are just scratching the surface of where this industry is going, but so much of what we are dealing with just isn’t working.”

One of the biggest problems still to be resolved by many retailers is poor delivery, Roper explained, with recent eDigital Research figures showing that 35 per cent of consumers would be happy to pay for a timed delivery service.

Elsewhere at the event, Google director Matt Brittin advised firms to think of their web sites as “a work in progress” that can be updated according to customer requirements and what works successfully.

“Consumers are changing really fast ­ they’re no longer happy to be passive spectators,” Brittin argued. “We’re at the beginning of a journey and still working out what’s going on ­ you’ve got to keep trying and testing stuff; that mindset works well and is probably why the pure-plays do well.”

Brittin said firms needed to think carefully about whether their e-commerce strategy is core to the business or can be run as a separate business unit, or even be outsourced. He added that many online retailers need to put more effort into raising their web profile by “relentlessly focusing on usability”, being more customer-centric and listing 100 per cent of their products and services online, even if they’re not available for internet purchase.

Brittin also argued that engagement with customers is crucial to online retail success, especially encouraging community and dialogue. “Then you have to listen and respond accordingly, as Cadbury’s did with Wispa,” he added. “After the Facebook campaign [to bring back the chocolate bar], they got a ton of great PR.”

Tony Stockil, founder of e-commerce consultancy Javelin Group, said that integration of offline and online channels could also give firms a competitive advantage in the e-retail space, although this may require an overhaul of point-of-sale systems and product information management, he added.