Many Online Holiday Shoppers Find Frustration

One quarter of attempted holiday purchases over the Internet typically
end without a sale being made, according to a study by Andersen Consulting.

Attempting to purchase 480 gifts at 100 different Web sites, Andersen
Consulting was able to complete only 350 orders. More than one-quarter
of the sites explored could not take orders: they crashed, were
blocked, were under construction, or were otherwise inaccessible.

Web sites of pure-play e-tailers — Web retailers without a
brick-and-mortar presence — generally provided better customer
service than traditional stores with Web sites, the study found.
Shopping at the sites of traditional retailers took almost 30 percent
longer (14 minutes) than ordering from an e-tailer (11 minutes). The
study also found that e-tailers are the most effective at tracking
inventory: 44 percent of e-tail sites can inform consumers whether
items selected are in stock, versus 40 percent of retailers, and 37
percent of catalog companies that accept orders online.

“The fundamental question being posed this holiday season is if it’s
cheaper, faster, and more convenient to shop online,” said Robert Mann
of Andersen Consulting’s Supply Chain practice. “The answer is that it
may not be better to go to the Web yet. At the same time, retailers
which consistently satisfy online customers enjoy a distinct
competitive advantage, since selling products online isn’t just
another way to take orders. Success depends on fulfillment operations
that can meet high levels of customer service. Companies run a high
risk of losing customer loyalty through poor performance. Right now,
reliability and service are the only things that matter.”

Making a successful online order lasts six minutes longer (15 total
minutes) in the morning than in the evening, the study found. It takes
an average of nine minutes to place online orders after 6:00 PM EST.
The typical Internet buying experience between noon and 6 PM lasted 13
minutes.

To study online fulfillment, Andersen Consulting asked 25 employees in
its Supply Chain practice to purchase gifts online from a mix of
traditional retailers, Internet pure plays and catalog companies. All
orders were placed over a seven-day period, morning, afternoon and
evenings, and delivered across the country to Atlanta, Chicago, and
San Francisco. Andersen plans on conducting follow up analysis on
actual delivery trends.

Among the study’s other noteworthy findings:

• When Web sites provide order status information, items ordered
  were in-stock virtually all the time. Catalogers were the notable
  exception at less than 80 percent in-stock. This is probably because
  many e-tailers remove items from their sites as they run out.

• Traditional retailers are the least accurate with delivery
  estimates, hitting the mark only 25 percent of the time

• Shipping costs were 22 percent higher for catalogers than e-tailers or
  traditional retailers

• Relatively few Web sites can inform a customer at the time of order
  when to expect to receive a package. This makes it difficult, on
  average, to order for a specific holiday. There were some exce

  ptions,
  such as Amazon.com, which informs customers of a shipping mode to
  choose to insure a gift arrival for Christmas.

• The study found a variation in the shipping performance for different
  products. For example, electronics products arrive in approximately
  half the time (3.9 days) versus music (7.4 days).