Online for the holidays

Despite difficult economic conditions, this year's online holiday shopping season will be strong. It's not that people will be spending more money on holiday gifts, but shoppers will be doing a greater portion of their buying online because online retailers have greatly improved the shopping experience.

History has shown us that if you want to rack up online sales, you need to have an "operationally excellent" Web site and good online customer service. Put more simply, the Web site (and online shopping cart) have to work well, and you need to be able to assist people seamlessly.

Surveys show that as Web sites have increased functionality and ease of use, consumers are more likely to buy online, and this holiday shopping season will put that to the test. In 1999, many consumers were disappointed in the performance of online vendors. Many online orders that were placed that year "in time for holiday delivery" didn't make it in time, remember? The result was that more than half of those people who bought gifts online in 1999 reportedly stayed away from online holiday buying in 2000.

Satisfaction, however, was much higher in 2000, with three-quarters of buyers saying they were very satisfied with their shopping experience. This means there will be less attrition from those who bought online last year, and those returning this year are likely to increase their spending levels.

If you are an online retailer, you need to think about making the online shopping experience more satisfying. This might include offering inventory checking and order tracking, and keeping customers informed on the status of their orders via e-mail. A wider array of products in the form of more complete online catalogs will make online shopping more fruitful. More flexible delivery times will also encourage shoppers to spend more. Shoppers will also be drawn to a Web site if it has extended customer loyalty programs. One catalog clothing company sends US$5 discount coupons that are redeemable only on its Web site, spurring me to increase my spending on their site. Another company, an online perfume store, offers free shipping on orders more than $100. Another online clothier offers "preferred" customers early access to sales of online merchandise.

At some point, good customer service boils down to people and the training they receive. For instance, I ordered something on the Web the other day and later received a notification via e-mail that my credit card had been rejected. I called the credit card company, and they informed me that there was nothing wrong with my credit card. They said that they routinely, for security purposes, require a vendor to verify cardholder information by calling the credit card company to receive authorization for the transaction. Rather than follow the procedure to verify that I was authorized to make the purchase, the vendor rejected the transaction. That experience left me thinking: good Web site; bad customer service.

Barb Gomolski is a research director at Gartner Inc., a research firm in Stamford, Conn. Send her e-mail at

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