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E-Business
Issues
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Netting
The Net Shopper
How to Satisfy The Online Consumer
Neeraj
Garg
Adapted by Neeraj Garg, A.T. Kearney, from an A.T. Kearney
research* into purchasing behaviour among experienced online
consumers in six of the most developed online markets: the
U.S., U.K., Sweden, Germany, France and Japan
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Internet
retailing has been a hot topic for the past few years,
but the dotcom bust raised real questions about whether
this was a sustainable business. There are a number
of reasons cited for the collapse of well-known e-retail
businesses such as webvan, but in this article we
shall limit ourselves to what e-retailers can do to
increase their business from experienced online consumers.
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Consumers
desire for alternative access modes
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Experienced
online consumers develop deep relationships
with a few e-retailers, and tend to become loyal
to their chosen sites. Rather than surf at random
from site to site, consumers tend to be loyal
to brands and settle into ‘comfort sites’ that
they constantly revisit
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The
five routes to growth
1. Increase the number of access choices
Experienced online shoppers want technology to provide
them with the freedom to shop wherever and whenever
they want. But the most prevalent mode of Internet access,
the personal home computer, does not meet consumer lifestyle
needs. Today, 92 per cent of consumers shop at home
using their own personal computer. A huge 41 per cent
of respondents want to shop through their TVs and mobile
phones. Nearly a third of consumers (28 per cent) indicate
that they would spend more money if they could get online
via their preferred access modes. (See Figure 1)
A
Third of online transactions are frustrating
to consumers
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2. Make websites more reliable and less invasive
A familiar scenario: it is late at night. John finally
decides to try buying groceries online. He enters the
website and spends more time than he likes filling his
shopping cart with food. He fills out his name, address,
date of birth, number of members in household, mother’s
maiden name, credit card, billing address, income. Information
fields keep popping up just when he thought he was done...
until finally he loses patience and leaves the site
without purchasing a single item.
Poor website functionality and invasive information
requests frustrate consumers who are trying to make
purchases.
Four
out of five consumers try to purchase, but give
up
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3. Don’t make consumers pick up the phone
Experienced consumers want to be able to purchase entirely
online without having to pick up the phone or make any
contact with the retailer. When they have to make a
call, consumers are so frustrated that the majority
resolves not to go back to the site again. Especially
worrying to e-retailers is that the likely outcome of
such a call—besides the extra cost—will be a disgruntled
consumer who will probably not return to the site. The
main reasons why consumers need to call e-retailers’
call centres are preventable. Requirements for additional
information and website failure were cited by 42 per
cent of consumers, both reasons are design and functionality-related
and avoidable.
4. Build relationships with consumers to cross-sell
products and services
Experienced online consumers develop deep relationships
with a few e-retailers, and tend to become loyal to
their chosen sites. Rather than surf at random from
site to site, consumers tend to be loyal to brands and
settle into ‘comfort sites’ that they constantly revisit.
These comfort sites have the potential to be destination
sites that meet multiple customer product and service
needs. Today, the most common repeat purchases are books,
music, computer software, holidays and clothing. But
experienced consumers are game to buy a multitude of
products online, supporting the opportunity for expansion
into broader categories.
Consumers
buy repeatedly from one to three sites
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5. Build click-and-mortar businesses
Consumers express a strong preference for e-retailers
that have a physical retail presence when making more
expensive and complex purchases online. This is especially
true for cars and insurance. This is the driving factor
behind the decision of three online banks, WingspanBank,
VirtualBank, and First-E Group to open physical branches.
However, for lower-cost consumables like books and CDs,
consumers expressed a preference for dotcoms. Consumers
cite security and the ability to touch and feel products
as the two main reasons for preferring click-and-mortar
retailers. Interestingly, few consumers indicated that
more competitive pricing was a reason to shop at click-and-mortar
retailers rather than dotcoms. Some brick-and-mortar
retailers have realised the power of multi-channel access
and developed successful click-and-mortar models. For
example, The Gap introduces its new season collections
online before introducing them into retail outlets.
By monitoring online consumer reaction to its new offers,
The Gap can influence how the collection is later introduced
into stores. Additionally, The Gap promotes its website
in its retail outlets.
Consumers
prefer a click-and-mortar experience for higher
ticket items
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Conclusion
The research provides a compelling snapshot of how retailers
can best position themselves to capture online consumer
spending.
1. Provide multiple access points to sell online: Consumers
want to buy online via more modes of communication than
just their personal computer.
2. Invest in website design and testing: Many of the
frustrations encountered by customers can be prevented,
and can thus limit future customer-care costs and lost
sales. The e-retailer must
* Offer a purely online experience
* Limit requests for information to only the essential
* Never ask for the same information twice.
3. Remove obstacles preventing customers from completing
a transaction purely online (lack of information, website
failure and confusing navigation being the most common).
4. Don’t just attract consumers, cultivate them: By
effectively marketing to online consumers, e-retailers
can increases sales of existing and new products and
services.
5. Embrace multi-channel marketing: A shopper may be
happy to shop from the same retailer, but finds different
channels more convenient and appealing depending upon
the type of product or service, time of day, and urgency
behind the purchase. For the retailer, understanding
how customers want to interface with you and building
a common brand that bridges channels will serve to satisfy
today’s customers’ dual desire for flexible options
and reassuring familiarity.
* Original research published by Joe Dickinson and Kate
Rizzuti from A.T. Kearney’s European Marketing Practice.
A.T. Kearney is a global management consulting firm
with over 60 offices worldwide. It specialises in combining
strategic insights with operational excellence and information
technology to deliver practical and tangible results
for clients.
Contact:www.atkearney.com .
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