The latest online retail sales figure came out earlier today. comScore is reporting that more than $26 billion has been spent online this holiday season so far, a 19% gain compared to last year. While not as strong as last years growth rate of 26%, compared to total retails sales growth this year it is a very impressive number. Early estimates are for a nearly flat year over year performance in retail spending. A tough economy has put a significant damper on holiday spending. Considering the dismal retail spending numbers, online retailers should be happy with the 19% year over year gain.
So...
While not a bad holiday season for online retailers, they cannot stand pat. There has not been much innovation from 2006 to 2007. Consumers expectations for online retail continue to go up. Online retailers need to keep pushing the envelope. What will be the improvements in 2008? Here are a few ideas.
- Moving from mulit-channel to merged channel. Whatever channel a consumer purchases from the experience should be the same. They should be able to seamlessly move between channels.
- Is it time for free shipping all the time, with no restrictions? I would challenge multi-channel retailers to determine the true cost when selling an item online vs. offline. I would be willing to bet that in almost every case it is far less costly online, even if you provide free shipping. When you factor in the increased inventory carrying costs, increased labor costs, increased facilities/real estate costs, it appears to be a no-brainer to offer free shipping all the time. This will eliminate price as a reason a consumer leaves your website to buy in a store. This is good for consumers and good for retailers. As a retailer are you willing to risk an intended customer to be distracted by other's advertisements and on their way to your store they buy from a competitor? All because they didn't want to pay the shipping charges.
- Real time inventory that crosses channels. If you truly want to provide that merged channel experience, you better let your consumers know if they are going to go to the store that the product is in stock. I can think of no more frustrating experience then after selecting the item to purchase you go to the store to purchase and they are out of stock.
- Better expectation management by online retailers. Retailers can better manage consumer expectations by making sure they know when items are out of stock, making sure they know the return policies, etc. Satisfaction, in simple terms, can be defined as a combination of what you get and what you expect.
While some retailers are already providing these capabilities, they need to be come the norm for all retailers. These are only a few things to think about. At the end of the day online retailers must continue to strive for improving the online experience and improving customer satisfaction. Improved customer satisfaction will lead to better financial results.
The ForeSee Results Top 40 Online Retail Satisfaction Index will be coming out in the next day or so. This is a satisfaction measurement of the top 40 U.S. online retailers during the holiday season using the American Customer Satisfaction Index methodology. It will be followed by a measurement of the Top 30 U.K. Online Retailer Satisfaction Index. Check back in the next couple of days for details.
By the way, I was on Bloomberg TV last week, you can see the clip here...Bloomberg clip
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Posted by: Jeb Archer | April 20, 2008 at 05:01 PM