Customer Service Worries Online Shoppers

Consumers think online shopping this holiday season will save them money, but are also concerned that online purchases will arrive late, according to online market research firm

In a “Holiday 99 e-Shopping Survey” conducted from November 12-22, 79 percent of the 1,031 Internet consumers polled said they expect to save money by shopping online this holiday season. Only 34 percent said they had shopped online for the holidays last year, whereas 71 percent said they plan to spend more than $150 online this holiday season.

The outlook from Internet consumers is less optimistic when it comes to the fulfillment of their online purchases. Sixty-three percent of those polled by still worry their online purchases will be late.

“Our data seems to support the view that e-tailers have moved quickly to convince consumers that shopping online can offer convenience and cost-savings this holiday season,” said Irwin Barkan, chairman of “What remains to be seen is their degree of success in managing back-end order processing systems, warehouse-to-front door fulfillment, and customer service follow-up. Then after the holiday promotions, e-tailers will have to retain customers still expecting bargains online.”

Poor customer service is going to cost online retailers $3.2 billion this holiday season, according to research conducted by Datamonitor. Last year, businesses lost $1.6 billion online last year by failing to Web-enable their customer service operations, Datamonitor found.

The research found the key to growing e-commerce profits is to maintain customer loyalty by offering live online customer service from representatives in call centers. However, only 8 percent of the 69,500 call centers in the US are currently Web-enabled. Less than 1 percent of all e-commerce Web sites currently offer live customer assistance, according to Datamonitor, and 10 percent of all abandoned shopping carts would be salvageable if better customer service was provided.

This data, of course, means there is a growing market for online customer service. The online customer support market will grow from $150 million in 1998 to $2 billion by 2003, according to Datamonitor. By 2003, 40 percent of all call centers in the US will provide multimedia customer service.

“Because growth in e-commerce is coming at the expense of other sales channels, revenues lost online translate to a loss of market share offline,” said Datamonitor technology analyst Leonard Chang. “Therefore, it is imperative for companies to integrate live customer service with their Web sites as soon as possible.”

The quarterly online customer service survey by Jupiter Communications brought more bad news for customers seeking help over the Web. It found that Web sites’ email customer service failure rates are on the rise.

The Jupiter study targets 125 top sites in five categories (content, consumer brands, travel, retail, and financial services) to gauge response time to emails requesting simple support. Forty-six percent of sites took five or more days to respond to a request, never responded, or did not post an email address on the site for customer inquiry. This failure rate is up from 38 percent from the third quarter of 1998.

More than half of the shopping sites Jupiter surveyed responded within one day, but the category still experienced a 40 percent failure rate, up from 28 percent in the third quarter fo 1998.

Is customer service the weak link in the e-commerce chain? While a recent study by Intermarket Group cited return hassles as a barrier to online shopping, one of the Web’s biggest drawbacks may be that it just isn’t the mall.

A survey by International Communications Research for MOHR Learning, a retail training firm, found the ability to touch and feel merchandise and the festive atmosphere of shopping offline during the holidays, give brick-and-mortar stores an advantage over the Internet. According to the survey of 975 consumers, 56 percent like to shop in stores during the holiday season because they can touch and feel the merchandise, 39 percent enjoy the festive atmosphere, and 36 percent can shop with friends. Twenty-nine percent do their holiday shopping in stores because it is tradition.

Female shoppers have particularly strong feelings about the entertainment value and social aspects of hands-on shopping, the survey fouund. Forty-seven percent of women say they enjoy the festive atmosphere and 43 percent prefer that they can shop with friends.

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