Toil And Trouble: Online Shopping Is Still A Muddle


FORTUNE
Monday, September 4, 2000
By Amy Gunderson

 

If you thought the quality of the online shopping experience last Christmas was criminal, it turns out you weren't that far off: In July, seven online retailers--including CDnow, KBkids.com, and Toysrus.com--agreed to pay civil penalties totaling $1.5 million for variously failing to provide customers notice of delayed deliveries and continuing to promise prompt shipping despite backlogs. Though the companies did not admit any transgressions, they all agreed to change their procedures.

The question is: Are things getting better? Now that online stores have had the benefit of more experience, and the holiday crush is long over, online shopping is a painless process, right? Well, sort of. Though some former Internet pretenders are improving, bungled deliveries, out-of-stock items, and clueless customer-service reps continue to dog online retailing.

So says Resource Marketing (www.resource.com), a Columbus, Ohio, company that studies and offers consulting on online marketing and communications. Resource, whose findings have appeared twice in FORTUNE's pages in the past 12 months, puts 50 of the biggest online shopping Websites through their paces, deploying a team of research specialists who buy and return items, test customer support and site features, examine privacy policies, and make dozens of other measurements. This time around, in a survey conducted between May 22 and June 15, home pages loaded faster than they did during the holiday shopping season, e-mail response rates improved drastically (86% were answered within 48 hours, up from 44%), and technical glitches that interfered with the placing of orders dropped to just 8%.

That's the good news. The bad news: More than one-third of the previously ranked sites performed worse overall this time around (see table), and online-only companies that previously had an edge over traditional retailers lost ground. "So many aspects of the experience remain difficult," says P. Kelly Mooney, Resource's managing director. Representatives at 25% of the customer-service centers weren't able to sufficiently answer questions from consumers and just 58% of the sites had a search function that really did its job.

Certain types of retailers, including discount stores, continue to struggle online. "The discounters really haven't gotten onboard yet," says Mooney. "They are there because they need to be online, but they haven't yet put a strong solution together." Both BlueLight.com, Kmart's online venture, and Wal-Mart landed at the bottom of the rankings (despite a newly relaunched Website, in Wal-Mart's case). At BlueLight, there were countless problems. Navigating the site was like trying to find your way on a dark country road without a map, and BlueLight then provided no basic account sign-up that would allow customers to store, say, billing and shipping addresses. It took nearly two days to receive an e-mail response (rather than the 24 hours the company promises), a customer-service phone number posted on the site was disconnected, and one order was delivered in an unmarked box without an invoice or packing slip. The only clue to the sender was the packing material itself--shredded BlueLight invoices. BlueLight says that its Website and order fulfillment were handled by an outside company at the time the survey was conducted but are now maintained in-house, and that the site will relaunch this fall.

Online computer sellers have their own problems. Features like the ability to customize a computer system online are of little use when the site doesn't provide any guidance on what computer components and software to select. And customer service at PC sites tended to stumble when it came to dealing with problem merchandise and returns.

By contrast, other categories are improving their features. On some of the apparel sites, for example, customers can manipulate images so that they can view, say, a jacket or handbag from different angles. And when it comes to clearly defined privacy policies and disclosure on how personal information is used, the luxury Websites, such as Miadora and Indulge.com, are taking the lead.

But e-tailers aren't consistent. Six months ago, beauty retailer Eve.com impressed Resource enough to place in the top six of all companies surveyed. This time around, technical glitches prevented the placing of orders, and customer-service representatives were unable to answer questions. The reason? The online company lacks the in-frastructure of a traditional retailer, says Mooney. Eve.com says Resource's experience is not representative of its service. (Eve.com has since overhauled its site, though the company says the change was unrelated to any complaints.)

In fact, traditional retailers are doing a better job online. The top five spots in Resource's survey are no longer dominated by online-only retailers. The most successful brick-and-mortar retailers, according to Resource, are adding features online that can't be found in the stores. Gap, for instance, allows customers to shop its three branches (Gap, GapKids, and BabyGap) using one shopping cart, and the company offers certain products, such as maternity wear, only online. Still, many companies haven't integrated their online shop with their network of stores. Nineteen percent of the companies in the survey, including J. Crew, don't accept returns of products bought online in retail stores. Even online-only retailers are beginning to see the appeal of the offline world. eToys ran a gift-certificate promotion with GapKids, and Garden.com toured a half-dozen cities with gardening demonstrations and now puts out a catalog.

Success is never certain, however, especially in this industry. Violet and Boo.com--two companies that scored in the top half of Resource's holiday survey--are now out of business. So far, it seems, a good Website and customer service have been no guarantee of success. "There is no direct correlation," says Mooney, "between the health of the company and customer experience."

From the Sep. 4, 2000 Issue

 

 

 

50 of the leading online retail companies 

Summer 2000 evaluation

The baseline (below) illustrates the total shopping experience at each of the e-retail sites studied during the Summer 2000 evaluation.

Companies that rest on the baseline deliver an experience that's on par with other e-retailers. The higher an e-retailer rises above the baseline, the better the end-to-end shopping experience. The lower an e-retailer falls below the baseline, the poorer the experience and, ultimately, customer satisfaction and gratification.

 


 

 

 


 

 

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