Australian e-Tailers Still Wishing For A Merry Christmas
By Shelley Dempsey
As Christmas time looms close once more, it’s interesting to take a step back and examine how far Australian e-tailers – many of them smaller operators – are progressing in terms of customer service compared to other countries. In order to do so, it’s useful to examine in detail a recent survey carried out by Computer CHOICE magazine, published by the Australian Consumers’ Association, (ACA) which is probably the most exhaustive survey yet carried out in the etail space in Australia.
ACA was one of 15 consumer organisations from 14 countries involved in Consumers International’s second global study of online shopping, titled: ‘Should I Buy? Shopping Online 2001: An International Comparative Study of Electronic Commerce’. The whole comprehensive report makes good reading and is available at www.consumersinternational.org The survey was conducted in late 2000 and early 2001, by researchers who placed a total of 412 orders to internet traders around the world, for items such as DVDs, clothing, computer accessories or food/drink. The researchers also booked a number of hotel rooms.
While some of the sites surveyed in Australia belong to large established retailers, such as Amway, Dick Smith, Dymocks Bookstore, Gowings menswear and Myer Direct, a good number of small sites were also represented. These include www.propellerhead.com.au, bluegumfinefoods.com, estore.com.au, wheretostay.com.au and bottleshop.com.au
Given that 19 per cent of SMEs are now selling online in Australia, up from 14 per cent in 2000, (Yellow Pages Special Report into E-commerce, Computer Technology and SMEs 2001), the findings have many implications for this sector. Consider also that 50 per cent of all businesses in the retail sector now regard themselves as part of the internet economy (‘Built For Business: Australia’s Internet Economy 2001’ report commissioned by Cisco Systems from The Allen Consulting Group).
Some of the more surprising Australian findings in the ACA survey are that despite the advances of recent years and the lessons learned in the importance of customer fulfilment in terms of repeat business, which is crucial to internet selling, only 31 per cent of goods ordered arrived within the quoted time, when a quoted time was available. Interestingly, only 54.5 per cent of the sites surveyed even offered a target delivery time, which would further seem to suggest a lack of confidence in fulfilment arrangements.
If there is any useful comparison to be drawn here with the Christmas of 1999, then it seems that on-time fulfilment levels have indeed improved in two years. The Sydney office of Boston Consulting carried out a fulfilment survey in Christmas 1999 that showed that about 40 per cent of its 50 orders placed online failed to reach consumers by Christmas Day and that 20 per cent were not delivered at all.
To be fair, while the 2001 Shopping Online report records better fulfilment practices, it must be remembered that the survey was not conducted over Christmas, when order numbers and postal services are much more chaotic.
Against these 1999 results were better trading results for Christmas 2000, where Australian online sales rose more than 200 per cent on 1999 seasonal figures, pulling in around $325 million, according to survey company www.consult (now ACNielsen.consult). Ninety-seven percent of customers were satisfied with their experience and intended to shop online in Christmas 2001, according to the survey.
Well, Christmas 2001 remains a mystery yet, but the online shopping report for earlier this year does give some positive indications. Overall, the 2001 report finds, Australian-based sites did better than the world average in providing details of which countries they sell to (73 per cent), in calculating an exact total cost and in giving information on returns policies. “Also encouragingly, 92 per cent of Australian sites gave customers the opportunity to review their orders before confirming them,” the report says.
In addition, about 81 per cent of survey orders were confirmed (presumably by email) after leaving the purchase website, but only 38.5 per cent confirmed when the order had been dealt with and was on its way to the customer.
Of all the Australian orders placed, 100 per cent had to be paid for before delivery, but only 69 per cent of orders arrived with a receipt.
In addition, none of the local sites surveyed featured a currency converter, which suggests they are either trying to discourage overseas business, which can pose tricky fulfilment problems, they have failed to think of installing a converter or they just don’t care. “No Australian sites surveyed included a link to a currency converter, suggesting that Australian e-commerce isn’t set up to deal with international customers,” says the report.
Refunds and Returns Not Up to Par
The main conclusion of the Australian survey was that Australian online retailers fall down on refunds and returns, with just 8 per cent of websites surveyed providing information on how to deal with possible problems with the order.
About 65 per cent of the sites in the Australian survey displayed a returns policy, whereas only 36 per cent of sites showed whether the item ordered was in stock or not at the time of ordering. On receipt of goods, only 23 per cent of customers were informed how to return the item if needed.
All of this is very illuminating, but how does Australia compare to the overall standards reported in the international survey?
Six Per Cent of International Orders Never Arrive
Seemingly, quite well. The overall results show that internet shoppers still can’t shop with confidence, according to the international report, with too many sites failing to deliver at all. In particular, 6 per cent of international goods ordered failed to arrive, and to make matters worse, in six of these cases, shops charged for goods that never turned up
In 16 cases (9 per cent) where goods were returned, the retailer never sent a refund and in 17 per cent of cases where a refund was sent, it took over 30 days to be credited. Consumers International also also identified clear failures to comply with current laws and best practice guidelines.
For instance, one in five sites failed to give a clear total cost of the transaction, less than half the EU -based sites gave information to customers about their right to withdraw from a contract – a cooling-off period that is required by EU law, too may sites failed to give information about key terms and conditions, (for example a quarter gave no information about their returns policy) and more than one-third of sites failed to make clear the countries to which they would and would not ship goods.
“Although there have been some improvements since 1999, business still has a long way to go both in reliable fulfilment of orders and in improving the information given on the site,” says Anna Fielder, director of the Office for Developed and Transition Economies of Consumers International.
“Although the internet offers advantages to consumers in terms of convenience and choice, a world where many goods fail to arrive and traders don’t send refunds does not inspire confidence in consumers to shop online.”
Similar conclusions were reached by the Australian researchers. “Results like these don’t fill you with confidence, and that’s the point,” says ACA in the Australian survey. “Without the certainty of a traditional over-the-counter purchase, online shopping will never be more than a last resort for most people.
“Clearly, Australian-based e-commerce sites have a way to go before they obtain the international reputation as an e-commerce “centre of excellence” that the government believes its ‘best practice-based’ self-regulatory framework will provide.
So what’s the solution? Well, a number of things. ACA is calling for strengthened legislation and an enforceable code of conduct for consumer protection in e-commerce, based on OECD e-commerce guidelines, for better education for consumers and businesses about their rights and obligations and for more monitoring of sites, proposing a “name and shame” policy towards sites that repeatedly fall below par.
In the meantime, any e-commerce traders out there might do well to peruse the OECD Guidelines for Consumer Protection in E-commerce, which are contained in the international 2001 shopping online report.
Reprinted from australia.internet.com