Keep Those Online Shoppers Smiling

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December 18, 2000 (5:08 PM EST)

By Jill Morneau,

Keep the customers happy - that's the e-tailer mantra this holiday season.

"The number one cause of shopping dissatisfaction last year was late delivery," said Daniel Greenberg, vice president of marketing, Active Research.

After being deluged with complaints last year, the FTC fined seven e-commerce sites a total of $1.5 million, and sent letters to more than 100 other e-businesses warning them not to make promises they can't keep.

Retailers apparently have gotten the message. This year they're specifically focusing on customer service and availability, said Jill Frankle, director of retail commerce with Gomez Advisors, Waltham, Mass.

One such company, Toys "R" Us, Inc., Paramus, N.J., had tremendous problems last year making deliveries on time for the holiday season. This year, it has partnered with Amazon.com Inc., Seattle, a company known for its efficient operations and online service.

To make sure the products get to customers on time, 51 percent of e-tailers have signed service agreements with delivery companies such as FedEx or UPS, said Frankle.

But improved delivery is just the first step in customer satisfaction. Customer service also is a major problem for online retailers.

E-tailers get high marks for telephone support, but low ones for e-mail communications. And the strong phone support doesn't always satisfy customers, who generally prefer email contact, said Frankle.

As online shoppers grow in number, customer relationship management is becoming increasingly popular, especially at industry trade shows, noted Chris Long, vice president of strategic marketing with OrderTrust Inc., Lowell Mass.

Many electronic customer relationship management tools offer loyalty programs which reward customers with discounts and gifts for their continued loyalty. Yet, "The bottom line is, if you don't get the toy there for Christmas, no amount of frequent- flyer miles will make up for that," said Long.

Long's company, OrderTrust, is a back-end order processing component for online retailers. Long reports that so far its holiday season has gone well. "We've seen no glitches, no downtime, no significant outages, and everything is flowing pretty smoothly."

Research shows that the checkout process is one area that can use some improvement.

Currently, 75 percent of shoppers come to a retail web site, put an item in their shopping cart, and then leave the site without making the final purchase, said Long. Forty percent of those shopping carts are abandoned during the checkout process, he added.

Amazon.com, however, boasts that 9 percent of people coming to its site actually make a purchase, compared with 1.8 percent on an average retail site. Long noted that Amazon's checkout process is extremely well-done.

As more people make purchases online, e-retailers will learn from each other, said Long. Site functionality will be easier to follow, delivery systems will be streamlined, and customer satisfaction will increase.