Make-or-Break Time

Shoppers are losing patience with e-commerce Web sites that don’t perform.

And merchants that fail to provide a positive online shopping experience this
holiday season risk being out of business by the second quarter of 2001, says
research and consulting firm Gartner Group Inc.

Mega-money is at stake here, too. Gartner said it is predicting that
worldwide online holiday shopping revenue will surpass $19.5 billion this

“After two online holiday buying seasons of lost orders, late deliveries and
broken promises, consumers have little patience for late or lost orders and
poor customer service,” said Geri Spieler, research director for Gartner’s
e-Business Services.

“Brick-and-mortar companies with online channels have some inventory
availability advantages over Internet pure-plays, but the point is lost on a
consumer who cannot get a
question answered or find out where an order went,” Spieler said. “With the
cost of customer acquisition ranging from $50 to $300 each, there is no room
for profit without repeat purchases. Without customer loyalty, e-tailers will
eventually fail to earn new business.”

Gartner cited three major Web site problems that are driving consumers away:
lack of product fulfillment information; poor customer-centric, intuitive
site navigation; and a lack of reasonable, reliable shipping fees and
delivery dates.

Most Web e-tail sites do not offer real-time information about the
availability of inventory. “The e-tailers need to have an integrated
‘decrement’ process in which a replenishment order is sent to the supplier
when inventory has reached a critical level,” Spieler said. “The customer
should be informed of every stage of the order, including
order confirmation, out-of-stock or back orders, and shipping notification,
and that each stage includes a tracking number.”

Many consumers also are getting annoyed by Web sites that are difficult to
navigate, slow to load and dense in logic to find information, Gartner said.
Online shoppers must be able to find answers in no more than two clicks.
“Good customer service will
offer simple-to-locate merchandise, helpful and fast service, a simple
transactional process, and cross-channel communication,” said Spieler. “This
means a customer can telephone, e-mail, or use live chat to access all their
order information from customer service, no matter where the order came from.”

Lastly, some e-tailers base shipping on the total amount of the order or
attempt to make shipping a profit center. “Savvy e-tailers can win client
loyalty by offering early bird shoppers reduced shipping fees with extended
delivery time and plan-ahead shopping
strategies,” Spieler said. “Online retailers that attempt to gain customers
by absorbing shipping fees do so at great cost to themselves. When they
return to standard shipping fees after the holidays, they may fail to create
a long-term customer relationship.”

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