What could kill both Web 2.0 and the high street?

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By: Wise Marketer Staff |

Posted on December 28, 2007

Web 2.0, which was possibly one of the bigger online trends seen in 2007, could well meet its end in 2008 while rising online sales will continue to put serious pressure on High Street retailers, according to UK-based web site testing firm SciVisum.

In making its predictions for the direction of online retail in 2008, SciVisum cited the main drivers of Web 2.0's expected decline as being a growing number of cautious advertisers being wary of allowing their brands to be associated with potentially unsuitable content on user generated content (UGC) web sites.

Web 2.0's novelty value expires
The novelty value of Web 2.0 sites may be coming to end, and their rapid growth in popularity may start to dwindle, the company warns. According to Deri Jones, CEO for SciVisum, "2008 is set to be a watershed year for e-commerce. We expect consumers and companies alike to continue to adopt an almost nomadic attitude toward Web 2.0 sites, rapidly flocking to the 'next big thing' until the market becomes so saturated that they will actually be turned off them completely."

High street decline?
But, just as significantly, 2008 may also be a year in which high street retail revenues start to decline. For this reason, the company suggests, many high street retailers will begin to focus more attention on their online shops, trying to remove any problems or barriers that currently stop customers using them as often as they could.

Each year the retail market sees significant increases in the amount of online spending. In the UK, government figures (from the Office for National Statistics) showed that online spending reached 130 billion in 2006, a growth rate of 29% over the previous year. As this figure increases to as much as 162 billion by 2020 (according to Uswitch), high street retailers that can't adapt to consumers' shopping preferences will begin to see a marked decline in sales.

Online sales recovery
The company also predicts that online competitive pressure will intensify for all industries, and that most companies will be forced to review and tighten up their e-commerce operations to gain the best possible return on investment (ROI) from them.

Recent research by SciVisum found that one third of consumer online journeys experience a 3%+ error rate, and more than 10% suffer from extreme inconsistencies in the speed of moving from web page to web page. Worryingly, while such "invisible errors" affect 2% - 5% of web site customer journeys, they can't readily be detected by standard web analytics and web logging systems. Examples of these errors include slow or inconsistent page loading speeds, or errors that unexpectedly empty or corrupt the customer's shopping basket.

In 2008, SciVisum expects companies to focus more resources on eliminating errors that impact the customer's web site journey to help ensure that marketing and advertising investments in attracting customers is not wasted.

Web site ownership changes
In 2008, the company predicts that corporate personnel will take more ownership of their company's e-commerce activities, and there will consequently be a shift in the kinds of performance metrics used to assess web sites.

SciVisum's research found that it is the business and marketing staff who are most aware when there is a problem with the company's web site. But these business personnel have often been 'fobbed off' by IT departments' use of irrelevant data and metrics that suggest that the web site is performing well enough. In 2008 it is expected that marketing and business executives will begin to push back, accepting only data that is relevant to the customer's experience.

Where sales figures were previously sufficient, web site operators are expected to begin demanding hard metrics that provide a more accurate picture of the customer's journey through the web site, highlighting any problems or inconsistencies that may be being experienced. These metrics will enable more informed choices about which solutions can deliver the best ROI, and will mean that the IT department's resources can be more efficiently channelled into fixing problems that are driving customers to defect to competitors instead of upgrades that could have a smaller long-term effect on both sales and customer loyalty.

A tax on bandwidth, at last?
Increased fears of global bandwidth shortages could also enable Internet Service Providers (ISPs) to charge a significant "tax" for organisations that currently offer video download services for free.

These charges would, in turn, be passed onto the end user based on the amount of content they download. This, SciVisum predicts, will lead to the decline of so-called "net neutrality" - the principle that data on the internet should be moved blindly and impartially without regard to content, destination, or source.

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