One-Quarter of Attempted Holiday E-Commerce Purchases Fail

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.

Average Days for an E-Commerce
Holiday Order to Arrive
Electronics 3.9
Gifts 4.5
Apparel 4.9
Movies 5.3
Books 5.4
Toys 6.0
Sporting Goods 6.6
Music 7.4
Source: Andersen Consulting

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 exceptions, suchas 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).

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