Study: Online Sales Stall at the Checkout Counter

Online retail sales are projected to surpass the $US9 billion mark this holiday season, but almost half of all Web shoppers could abandon their virtual shopping carts at the checkout counter if Web stores fail to simplify the online buying process.

A study of eight of the Web's most popular retail sites released Tuesday by Creative Good, an e-commerce consulting firm in New York, found that 43% of all purchases failed because consumers either had trouble finding products or problems occurred with the electronic checkout process that made completing the purchase too difficult.

Creative Good conducted more than 50 consumer tests on each site using experienced online shoppers to generate data for the report. The eight sites tested, some of the giants of the online shopping world, were Amazon.com Inc., BarnesandNoble.com Inc., Buy.com Inc., eToys Inc., KBkids.com Inc., BestBuy.com, Gap.com and Landsend.com. Creative Good selected these sites based on their maturity and popularity in the online apparel, toys, books and electronics retail markets.

Problems with electronic checkout accounted for 40% of all failed purchases, according to the study. Although some shoppers managed to find a product and add it to their electronic shopping carts, many became frustrated by confusing account registration requirements, vague error messages that offered little or no help on how to proceed and an inability to order a specific quantity of items.

"It was as if these customers made it to the cash register but the store would not let them pay," the study concluded.

Consumers said they also found it difficult to differentiate between new and existing customer accounts, according to the study. For example, as a means to speed up the checkout process, some sites offer separate navigation paths for users who already have an account with the site. The problem, according to the study, is that the existence of two equally prominent checkout paths confuses new customers. The study instructs sites to design checkouts for new customers and use cookies to remember return customers.

Aamir Rehman, senior analyst at Creative Good and the principal author of the study, said if users are experiencing these difficulties at major sites like the ones included in this study, then there are a lot of smaller dot-com companies that may not be in business next year due to an inability to convert shoppers to buyers.

"We believe that the Web is too hard to use," said Rehman. "The checkout process needs to make it clear to customers what they need to do and how to proceed to the next step," he said. "These sites generally have a lot of problems. So we tested some of the best sites and found that they have a 43% failure rate. The smaller ones that don't have an off-line presence are even more likely to fail."

If e-commerce sites improve the checkout process, they could gain an additional $US6 billion this season from what otherwise would be unrealized sales, according to the report.

Barrett Ladd, an analyst at Gomez Advisors Inc. in Lincoln, Mass., said the problems identified in the study shouldn't amount to a disaster for retailers this holiday season.

"Ideally, during the checkout process, firms should provide access to customer service information . . . especially privacy and security information," said Ladd. Sites should also show the customer the steps in the checkout process, she said, adding that, "Some sites have started to focus on checkout, though few have done an exceptional job."

Recent forecasts by industry think tanks such as The Yankee Group in Boston, Mass., and Gartner Group Inc., Stamford, Conn., have pegged the volume of online retail sales during the fourth quarter holiday season at anywhere from $US9 billion to $US19 billion, respectively.

Another forecast by Gomez Advisors, recently estimated that online retail sales during the holidays would reach $US11.4 billion, more than double the $US5.2 billion in sales reported by the U.S. Department of Commerce during the same period last year.

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