E-Tailers Try to Master the Customer Service Thing

by Michael Pastore

Thirty-five percent of all Americans report being very satisfied with their online holiday shopping experience, which is better than years past, but also leaves room for improvement.

Thirty-five percent of all Americans report being very satisfied with their online holiday shopping experience, according to the eSpending Report from Goldman Sachs, Harris Interactive and NetRatings, Inc. Additionally, 17 percent stated that their holiday shopping satisfaction is higher this season than last year.

"Quality customer service has not been impacted by the dot-com shake out or economic conditions this year and remains a key factor for online shoppers," said Sean Kaldor, vice president of analytical services for NetRatings.

Lower prices and the ability to easily compare products and item cost on the Internet led 39 percent of Americans to shop online the week ending Nov. 17. Sixty-seven percent of those surveyed said pricing was their main purchasing factor, while 59 percent cited product selection. Additionally, 26 percent of shoppers indicated that shipping costs are impacting their purchasing decisions this season.

"E-tailers offering free shipping promotions and competitive pricing have much to gain from luring price-conscious shoppers," Kaldor said. "Holiday shoppers feeling the effects of the slowing economy this season are watching their budgets and looking for the perfect gift with the right price."

Findings from the survey also revealed that one in three Americans have started their holiday shopping as of the week ending Nov. 9. Eleven percent of respondents indicated that they have completed their holiday shopping.

"With the holiday season starting in the second week of November this year, we can expect online activity to grow steadily as the season progresses," said Lori Iventosch-James, director of e-commerce research at Harris Interactive. "The overall outlook for the holiday season is positive, as popular online categories such as home and garden, toys and video games have already emerged as hot gift categories this season."

But with online competition only a click away, online retailers have to use extra care to maintain existing customers and add new ones. According to a report by Datamonitor, online retailers will lose $13.5 million in 2001 due to poor online customer service.

The report also found that 69.4 percent of all potential online transactions in 2001 were abandoned. Some of the most popular reasons that online buyers cited for abandoning their shopping carts were slow processing speed of their purchase orders, concerns over security and high shipping and handling costs. Of that 69.4 percent, 8.1 percent of transactions were lost because retailers failed to offer consumers a method to have queries answered while they were shopping.

"While online retailers did increase their investment in CRM technologies over the past year, it will take a shift in strategy to avoid future losses," said Brian Huff, technology managing analyst for Datamonitor. "Online retailers have been too focused on the logistics of selling over the Internet. In order to adequately service customers, they must focus on the customer rather than the channel."

Datamonitor, which estimates that 30.6 percent of transactions were completed online, found this figure is up from 25.4 percent last year. One of the reasons that accounts for this increase is personalized marketing messages. Retailers are currently second only to financial services firms in spending on online personalization technologies.

The second reason for increased completed transactions is the streamlining of online product offerings by retailers. According to Datamonitor, today's online retailer is resisting the urge to sell anything and everything over the Internet. This focus allows retailers to focus their marketing on items that have a higher likelihood of being sold online. For example, online retailers are better off offering incidentals, such as books and CDs, than big-ticket items such as automobiles.

Reprinted from CyberAtlas

  This article was originally published on Wednesday Nov 21st 2001
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