Figures just released by IMRG reveal that UK consumer spending for November 2009 was up by a quarter compared to the previous month and by 11% against 2008.

This news comes just after the BBC reports of critisism levied by the consumer advisory group Which?, who claim that many online retailers are breaking the law when it comes to complying with the Distance Selling Regulations.

Not Surprised

Neither of these stories surprise me if I’m honest.

Even though my household generally lives its life online, when it comes to Christmas shopping we’re traditionalists at heart; preferring to trawl around the retail parks rather than click away when it comes to filling our Christmas stockings.

However this year the allure and convenience of online shopping won us over particularly when faced with the pressures of limited time due to work commitments, apathy at leaving the house (brought on by bad weather and a touch of the lurgy) coupled with the need to watch the pennies this year. I suspect others are the same to a lesser or greater degree on all these counts, hence the shift towards the e-tailing platform by many shoppers.

As for Which?. They were critical of the websites’ of many major chains including Marks and Spencer’s and Game, who quite frankly, should know better and are suitably resourced to ensure they are compliant.

However it’s not the big names that we need to worry about when it comes to making sure we as consumers, are suitably protected by the law when purchasing online. After all, should it ever ‘kick-off’ then you’ve got a lot to lose Mr M&S and besides, we all know where you live!

Instead it’s the smaller retailers, the virtual businesses, the ‘drop shippers’ and the back bedroom entrepreneurs who at best, are misinformed or oblivious to their legal obligations; or at worst, are deliberately out to deceive us; that we need to worry about.

Low Barriers to Entry

The problem, some would say, is that the barriers to selling online are very low and policing is practically non-existent.

Think about it!

For as little as a couple hundred quid or so, anyone can download a free shopping cart such as OS Commerce, fill it full of products then bolt-on a PayPal account or even a simple web form that captures credit card details and Bob’s your uncle! You’re online selling! Minimal technical skills required and no real business behind it all, is needed.

To be fair there already is a whole raft of legislation when it comes to selling online. This ranges from the Distance Selling Regulations mentioned above, the PCI standards and the Trade Descriptions Act to name but a few. The banks try to do their bit, by dictating a standard of website before they will grant a merchant account, but judging by the number of e-commerce websites that I come across on a regular basis that fail to make the grade; the current level of policing isn’t enough to ensure adequate consumer protection.

For example, take a look at this website I came across recently. What’s wrong with it? Answers on a very large postcard please to…

My Top 10 Warning Signs

So to help consumers spot the warning signs, I’ve compiled a list of the top ten characteristics shoppers need to look out for if they want to buy with confidence from an e-commerce website.

1. Is there an easy way to contact the website owners other than email i.e. by telephone or post?
2. Is their telephone line answered by a knowledgeable human being? Give it a try.
3. Is there a real-world bricks and mortar postal address available on the site?
4. Is the company that runs the website a limited company? Look for a company registration number and check they exist on the Companies House website. Not essential, but a limited company is easier to track down.
5. Do they offer a clear delivery and returns policy? What guarantees do they offer in case of non-delivery or faulty products?
6. What is their payment policy, do they take a good leaf out of Amazon’s book and only take payment from your card as your goods are dispatched?
7. Are there other customer reviews or ratings (ideally user generated) on their website? What do they say?
8. How does the website handle credit cards? Look for the secure padlock symbol and ideally an association with a well known card processing provider perhaps linked to a major bank or a provider such as SagePay or WorldPay.
9. If you have doubts about the website, try googling them to see what other references there are to them on the web. You could be surprised what a search brings up.
10. Finally, does the design and shopping process you experience on the website, make you feel comfortable? If it doesn’t abandon your purchase and look elsewhere.

This list isn’t exhaustive, post your own suggestions below.

Happy Christmas to you all.

Protx was established in 2001 and provides online payment services for small and medium businesses (SMEs) in the UK, with a customer base of over 10,000 businesses. Protx online payment gateways are accredited by a range of banks including Lloyds TSB Cardnet, Bank of Scotland, Barclays Merchant Services, HSBC, Natwest Streamline, American Express, Diners Card, JCB, and Euroconex.

At the time of the acquisition Sage Group chief executive Paul Walker said: “The acquisition of Protx brings Sage the capability to integrate secure payment systems with our business management software. With Protx in the UK and Verus in the US, we continue our strategy to expand into new adjacent markets and broaden the range of services we can offer our SME customers.”

Protx has always been our online payment gateway of choice for those clients who are looking to sell online with a shopping cart based website or as a way of simply taking payments online in a secure manner through their website.

The company has some good value products that do exactly what they say they do and added to that, we’ve found their merchant and developer customer support to be responsive and helpful when needed.

When Sage came along and snapped them up I felt then as I do now, there’s no reason to change this view.

Protx Re-Branded to Sage Pay

A couple of years have now passed since the takeover and up until last month (April 2009) the company has continued to trade as Protx. The official launch of Sage Pay was on the April 21st with the launch of its new website www.sagepay.com This marked the demise of the Protx brand and its re branding to Sage Pay.

Will this re brand benefit the company? I think so. I always found that a lengthy explanation of who Protx were was needed when I recommended their products to our clients as the Protx brand had low recognition amongst SMEs. However with the introduction of the “Sage” name into the brand and the high recognition and confidence factors associated with this name amongst SMEs and the general public, I feel this will be reversed and will provide additional confidence to those shoppers who use Sage Pay merchant websites.

A short video from Sage about the change is below:

Consequently the need to trade on-line with an effective e-commerce strategy is now a real ‘must have’ for many traditional bricks ‘n’ mortar retailers who want to grow their businesses.

However, many retailers make basic errors when it comes to trading on-line resulting in their ventures collapsing before their very eyes leaving them disappointed and out of pocket.

So where are they going wrong? Here are the top seven mistakes many small retailers make when they decide to move their business on-line.

1. Failing to Research and Plan Using the web as a sales channel is full of pitfalls for the unwary so the whole idea should be a carefully researched and thought out process like any new business venture. Unfortunately many small retailers think they can compete online with the Amazon/Currys/Boots and Play.com’s of this world with an off the shelf shopping cart that costs them just a few hundred pounds (or less) marketed with a handful of adverts in their local paper. Any business looking to move into e-commerce should approach the matter with a workable and realistic business plan for the project that is S.M.A.R.T. (Specific, Measurable, Achievable, Realistic and Timely). To do otherwise will result in failure.
2. Getting The Name Wrong Naming an online business in a similar way to a competitors in the hope of ‘catching some of their traffic’ is a recipe for disaster and could leave an e-tailer open to litigation. Time should be spent researching names that do not conflict with an existing business (on-line or off-line) that offer the same or similar products to the intended online shop. This applies both here in the UK and over in the US as the Internet doesn’t recognize borders. Attempts to get both the .co.uk and .com domain names for the site should be made and researching the name to make sure it doesn’t conflict with any registered Trademarks or existing websites wil pay dividends. Useful resources on the web to help with this include: www.nominet.org.uk, www.companieshouse.gov.uk and www.ipo.gov.uk If the busienss has already been named it’s found to be similar to an established competitor; serious consideration should be given to renaming it. It’ll save a lot of grief later.
3. Poor Site Design and Usability No matter how little or how much you spend on a site, if shoppers can’t use it, can’t easily find your products and figure out how to buy them, or should they feel uncomfortable with the site’s security; then they will abort their sale and leave the site for another. If you’re serious about e-commerce for your business, make sure you work with an Internet consultancy or web design agency that has experience in the sector and can deliver a site to you that is custom designed for your needs. Such a company will also be able to offer you advice and guidance throughout the process of your site’s development on many aspects such as marketing, payment processing and converting visitors into sales. Remember, such people may not be experts at retailing your products in the high street, but they are experts at building online retail stores. Use them to your advantage and listen to what they have to say with an open mind. Yes, the up front development costs will be higher when dealing with such an agency in comparison to a single web developer, but it’ll pay you dividends in the long run as you’ll have a more professional site that is capable of competing with the big boys.
4. Poor Customer Service Within the bricks and mortar world of retailing, customer service is a personal, face-to-face relationship the trader has with their customers and is relatively easy to manage. In the online e-tailing world, that personal contact element is removed and must be compensated for with elements such as FAQ pages, secure certificates and real world contact addresses on your site. Easily visible telephone and email addresses that reassure the shopper and the use of a good secure payment processing provider will build shopper confidence. Liberal use of product and deliver guarantees with a good privacy policy and transparent T&Cs across the site will also help to reassure the shopper and encourage them to buy from your site.
5. Poor Order Fulfillment Getting all the ‘front end’ stuff right coupled with good customer service set-up is not the end of the story if the whole process goes pear shaped once the order has been placed. It won’t take many missed orders, or orders being delivered late or damaged before your brand becomes tarnished and your business starts to get a bad reputation. A few well placed blog posts by disgruntled shoppers can cause irreparable damage to any online shop and is very difficult to eradicate once it’s on the web. So make sure that you set-up an effective order fulfillment strategy that is capable of delivering nationally or if needed, internationally. Set delivery guarantees and make sure you stick to them. Be aware that it may be necessary to employ staff to specifically manage outgoing orders or at the very least make it part of an employee’s job description. Be prepared for this.
6. Lack of Marketing The days of “build it and they shall come” are dead and buried and it’s not good enough simply to launch a website and expect people to find it. The promotion of your e-commerce website needs to take into account a number of strategies including search engine optimisation and marketing, online advertising (PPC etc), perhaps e-zines and offline marketing in the traditional media. Marketing a website is not a low cost or quick option in these competitive times for any e-tailer and is often a time and cash hungry process. Build into your budget enough money for the site’s marketing once it’s launched and start to think about the whole matter before you start to build your website. Techniques such as search engine optimisation go hand in hand with site design, so build your site with this in mind rather than be burdened with potentially costly site reworks after launch.
7. Unrealistic Expectations Many small traders approach the setting up and ongoing marketing of an e-commerce website with unrealistic expectations both in terms of the time commitment needed and the initial set-up costs required. Serious e-tailers should be prepared to invest several thousand pounds in their online business and shouldn’t realistically expect a return on their investment in anything less than a year. One retailer, having spent his entire budget on getting his site launched, left no money for ongoing marketing and couldn’t understand why his site wasn’t flooded with orders within the first couple of months. In their initial business-plan, traders should take a long term view and work out how many products they need to sell in order to obtain a return on their investment. Unrealistic expectations will lead to disappointment and a lack of commitment.

Further Reading

Additional articles on the web that will help the small retailer avoid common mistakes include:

http://econsultancy.com/blog/1997-top-10-most-common-e-commerce-mistakes

http://www.allbusiness.com/sales/internet-e-commerce/3972–1.html

That’s right; we’re nearly into another “selling season”. Why not make the most of it?

This preparation could include bundling products together, rearranging your site’s Home Page with appropriate product images, call-out panels that draw people into specific product pages on your site or even encouraging shoppers to revisit your site by emailing previous customers with a discount voucher sweetener (you do email previous customers right?)

If you run a Google Adwords pay-per-click campaign to help promote your site, then here are a few tips from the team on the Google Adwords Retail Blog that will help you maximise the sales opportunities the 14th of this month can bring to your site:

• Target key age and gender demographics with unique Valentine’s Day ad texts, keywords & landing pages.
• Launch your campaigns early to meet increased search traffic by mid-January and don’t forget the last minute shoppers.
• Add both branded & non-branded keywords.
• Use Google insights for search to investigate your own product categories to see what searchers are interested in.
• Expand keyword lists using the Search-Based Keyword Tool.
• Use the Google Content Network to reach your target demographic and complement your search campaigns.
• Consider placing your Content ads on complementary sites; remember to target gifts for women on men’s sites and vice versa.
• Use Display Ad Builder to easily create image ads.
• Set appropriate CPCs and competitive budgets to anticipate increased traffic

Good luck and Happy Valentine’s Day!