The next phase in digital shopping

As we approached this millennium commentators were predicting the death of the high street and the emergence of a new breed of digital retailers fuelled by an explosion in online shopping.

However, as we enter a new decade online spending represents only a fraction of total overall retail spend (6.4%, according to Verdict), just a handful of the early adopters have succeeded, and the high street is still standing - albeit with a few notable exceptions.

Yet consumer shopping habits have perceptibly changed and the vision of a seamless cross-channel experience remains firmly on the board agenda.

Entering 2010, we have broadband access in the majority of UK households, a good proportion doing the bulk of their Christmas shopping online, and a double-digit growth rate of online sales that has stood up to the recession.

This decade will see a new phase in the digital shopping revolution as internet shopping starts to benefit from the ‘miracle’ of compound growth, mobile and digital TV become established channels in a truly connected world, and richer content drives a dramatically improved customer experience.

While 2010 will not be the year all these developments happen, it is a time for key decisions by retailers and their focus should be on three key areas:

Scale for growth Key to operating at scale is the breaking down of many of the silos that still exist to embed the online operation into the core retail organisation, delivering real-time integrated system solutions, and establishing an efficient fulfilment model. These scale challenges are quite different from launching and operating today’s medium-sized transactional website.

Customer experience Customers demand a consistent cross-channel experience and retailers must manage the additional complexity required to operate multiple digital shopfronts alongside a single view of the customer and integrated product information management. Retailers should aim to take their existing online customer experience to the next level through rich content, social networking, and personalisation.

Innovation There is real consumer demand emerging for mobile online services and we are starting to see the early shoots of what combining the internet with TV will really mean for the shopping experience.

A clear strategy should be put in place on how to position for this growth now, while acknowledging that significant sales will not come on day one.

Historically, convenience and price have been the trademarks of internet shopping and retailers with a strong brand have been successful if they delivered on this promise.

In many respects the future will be no different. However, the real high performers will be those that combine the basics with new channel innovation and an inspiring personalised customer experience that drives cross-channel loyalty.

Matt Prebble is senior executive at Accenture Retail