Despite Customer Service Woes, Online Retailing Keeps Growing

Michael Singer

Updated · Mar 21, 2001

For 10 consecutive quarters, more than 60 percent of U.S. online consumers have made at least one purchase on the Web within a 90-day period, according to Greenfield Online, and books and CDs remain atop the popular categories list.

For the third consecutive quarter, women continued to purchase online at a slightly higher rate than men (73 percent vs. 71 percent) during the fourth quarter of 2000. Those with household incomes of $50,000 or more are more likely to purchase online (81 percent) than consumers with household incomes under $50,000 (64 percent).

According to eMarketer’seCommerce:B2C Report,” consumers spent $59.7 billion online in 2000, compared to $30.1 billion in 1999, a 98 percent increase. eMarketer projects B2C global e-commerce revenues will reach $101 billion by year-end 2001, rising to $167 billion in 2002 and $250 billion by 2003.

“Despite all the negative press online shopping has received lately, we’re seeing that consumers continue to purchase over the Internet,” said Geoff Ramsey, eMarketer CEO. “Those B2C companies who deliver on the e-consumer need for convenience and customer service support will survive the current economic slide. Companies around the globe and across all industries are leveraging the Internet to achieve business efficiencies and deliver new levels of customer care.”

Customer service continues to be a seemingly impenetrable barrier for some e-tailers, and along with the dot-com downturn, it has been near the center of the aforementioned negative press. Getting Web users to come to a site is only half the battle, and, according to Gartner, Inc. research director Geri Spieler, many retailers need to make the shopping experience more satisfactory. In short, e-tailers need to direct resources toward fulfillment with the same zeal they direct resources toward marketing.

“Satisfactory fulfillment means that the customer receives the correctly ordered items in a timely way, and has an efficient and simple way to make returns if necessary,” Spieler said. “Online shoppers are removed from human interaction, and this separation allows them to leave the store in the click of a mouse. The challenge for a Web store is not only to engage the shopper, but to deliver an experience by which the customer can navigate and complete the shopping experience and actually achieve ‘e-fulfillment’ by the merchant.”

Top Five Online Purchase Categories
Within a 90-day period
Item Quarter
Q4 2000 Q3 2000 Q4 1999
Books 19% 25% 27%
CDs 16% 20% 22%
Clothing 16% 16% 12%
Toys or Games 12% 9% 14%
Computer Software 10% 14% 20%
Source: Greenfield Online

More than 60 percent of potential online consumer shopping is abandoned before reaching the credit card transaction process, Gartner found, and Spieler said this is directly related to the front-end design linking the shopping experience to the fulfillment process.

Customer service is also important to offline brands using the Internet. According to research by Jupiter Media Metrix, poor online customer service from a click-and-mortar retailer will drive 70 percent of U.S. online buyers to spend less money at that merchant’s offline store. Making matters worse, only 18 percent of click-and-mortar retailers are capable of accessing a customer’s consolidated account activity across all sales and service channels (online and offline). But 67 percent of online buyers said they expect store staff to be able to view their online account information, according to a Jupiter Consumer Survey

“Multichannel retailers have been treating their online and offline businesses as separate entities, but that’s not what consumers want. Since e-mail customer service is a weakness among retailers, consumers want to be able to go to offline with their concerns,” said David Daniels, Jupiter analyst. “Click-and-mortar retailers need to build their customer service infrastructure for the long-term, and changes in the market indicate that bringing those operations in-house is the only way to retain relationships across multiple channels.”

Jupiter’s survey also found that 83 percent of online buyers would like to be able to return online purchases at offline stores. Additionally, 59 percent said that they would like to order a product online and pick it up an offline store. But only 18 percent of multichannel retailers offer in-store pickup of items ordered online, and Jupiter analysts say that nonintegrated product inventory is a leading reason for customers’ dissatisfaction with online service.

Reprinted from CyberAtlas

  • Retail
  • Michael Singer
    Michael Singer

    Michael Singer is a career coach, podcast host, and author to help you step into a career you're excited about. Currently, He is a coach and trainer helping entrepreneurs and executives achieve business and leadership success. He is also an award-winning business journalist focused on the intersection of technology, Big Data, Cloud, SaaS, SAP, and other trending technology.

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