With online sales growing exponentially, the number of would-be e-tailers looking to capitalize on this brave new marketscape is burgeoning like miners and would-be millionaires during the California gold rush of 1849.
How best to appeal to this new breed of shopper is anybody’s guess, as there are multitudes of strategies, new and old, applied daily to win those shoppers over. Irritating this new breed of shopper is, unfortunately, easier than getting a beer in a bar.
Online consumers are unforgiving. Since there is no, or very little, personal interaction between retailer and consumer, the breadth of the sale and the opportunities to facilitate repeat sales lie in the ability to deliver. This means delivering what was promised, when it was promised, at the price promised — with coupons and specials accounted for. To fail on any of these three is to lose that customer forever.
Take, for example, a consumer who is looking to purchase a toy for her child’s birthday. Being strapped for time is almost endemic for online shoppers. Taking a few minutes out of a lunch hour to do a little e-shopping is commonplace and saves hours over going to the mall. This consumer is looking to get her son the gadget he wants for his birthday, the same gadget 9 million other 4-year-olds want this year. If that were not bad enough, her son’s birthday is at the beginning of December, and holiday shoppers have already depleted local retail stores’ stock of the favorite toy of the season.
Online shopping appears to be the best answer to her dilemma, but what happens when she clicks “submit” or “send”? And will she really get that gadget in time to make her son’s eyes light up on his birthday? The answer is, there isn’t an answer — at least not a single answer for all e-commerce companies, but here’s an idea of what happens in many transactions.
For starters, not all e-commerce transactions are created equal. Consequently, not all e-commerce transactions have the same level of security and service associated with a purchase. Let’s start with the fictional company, Gadgets-R-Ours, using real services readily available to businesses today. This fictional consumer, Susan, goes to the Gadgets-R-Ours Web site and finds the dream gadget of the season in stock.
She enters her credit-card information, shipping information, contact information, and, with a faint bit of hesitation, she sends the order on a whirlwind ride halfway around the world and back again in a moment’s notice. Gadgets-R-Ours, being a typical e-tailer, is looking to profit at every turn. Therefore, it holds Susan’s transaction for 48 hours for “processing.” This is done to collect interest as an additional revenue stream and is a common practice in e-commerce companies. After this processing period has expired, the order is submitted to the fulfillment center that houses the product.
Gadgets-R-Ours has no physical inventory for shipping — it sends the order to a fulfillment house or to individual manufacturers. Luckily for our consumer, Gadgets-R-Ours’ Web site is integrated with its fulfillment house, which tells the company there is current stock of the favorite gadget of the season. However, by the time the fulfillment center gets the order two days later, the gadgets are on back order, and there will be one disappointed birthday boy and one consumer who will never again visit the Gadgets-R-Ours Web site.
This is a big source of returns for e-tailers. There are an estimated 35 percent to 42 percent of product returns originating from situations similar to the one just described. Lag time is a big killer for online merchants’ public image and the headaches they encounter with a plethora of returns.
Let’s say this consumer places an order to ship FedEx overnight delivery. Sounds good, but the internal process for this merchant, from the time it receives an order to the time that order arrives at the fulfillment house for shipping, is another day. Being the average consumer that she is, Susan figures that order is on a FedEx truck the night she orders it, literally on its way when she clicks “submit” on the e-tailer’s Web site. The reality is, it’s still at least one day away from a FedEx truck and a day or more late for a birthday party. Anything less than next day here does not cut it.
It’s all a matter of service and expectations. People expect everything and are not very forgiving when they don’t get it. It is said that a customer who has a good experience will tell two friends, and a customer who has a bad experience will tell 10 friends.
Establishing a reputation as a reliable online merchant is difficult. Whom you partner with for order management, credit-card processing and fulfillment is likely the most important decision you will make concerning the success or failure of your company. A real-time credit-card processing and fulfillment partner can increase your profit margins by taking care of the details of sales, shipping and returns, while you focus on product development, marketing and advertising.
So what can you do to make your customers happy, content and coming back again and again? For starters, learn the search engines that matter on the Internet. Seven major ones account for more than 90 percent of all Web traffic searches. They include google.com, altavista.com, webcrawler.com, northernlight.com and yahoo.com. There are all sorts of tips and tricks you can do to get your site ranked higher by the search engines; if you or your Web-hosting provider is not doing this, you are missing a huge opportunity.
For bricks-and-mortar e-tailers, combining promotions through all your sales channels has proved to be an effective tool to get repeat business. For example, if you offer $5 in free merchandise for every $50 purchased from your store, carrying the total of traditional retail purchases, mail-order purchases and online purchases cumulatively is a proven method to make your shoppers happy and coming back. You must be careful to update your databases frequently, preferably in real time. The worry here is about the customer who made a purchase online that morning and stopped by a retail outlet that afternoon expecting to get her free credit — it needs to be there. To do less is to cheat the customer — at least, that’s how he will see it.
Including coupons that are “good” both at retail outlets and on Web sites with each shipped item is another good idea that is catching on with e-tailers. And partnering with companies that have complementary products or services will help you get the most from your advertising dollars and from your partners, too.
It’s a brave new world out there. The innovators will be the ones getting the gold. The losers will watch on the sidelines to see what works and will attempt to implement strategies after the fact, by which time, of course, there will be new and better strategies taking hold.
• Brian Gallagher is director of technology at FULLeCOM Inc., Ontario, CA, a full-service transaction and fulfillment solutions company. Reach him at [email protected].
