FRAMINGHAM (01/07/2000) - Surely there were plenty of happy Web retail customers this holiday season, as sales revenue soared more than 250%. But everywhere you turn, there are tales of online shopping woes, late deliveries, phantom purchases and out-of-stock items.
Fulfilling orders for popular toys, in particular, caused a lot of frustration.
Julie McHugh of Stoneham, Mass., thought her quest for one of the season's hot items, Girl Tech Password Journals, was over when she placed an order at eToys.com and got an e-mail confirmation. She said she didn't learn until at least a week later that the items were out of stock - "which lost a lot of time for me."
She never did get the Girl Tech journals from eToys and purchased a different gift.
Jonathan Cutler, a spokesman for eToys Inc. in Santa Monica, Calif., said his company handled most orders extremely well, pointing to BizRate.com surveys that give the site high marks for customer satisfaction.
He claimed that the site does real-time inventory checks and said he couldn't speculate what caused the problem. "Obviously, we saw a surge in orders, and we weren't perfect," Cutler said.
Next year, electronic retailers need to "improve the scalability of their fulfillment so they can handle a larger volume of packages," said James Vogtle, a Toronto-based analyst at The Boston Consulting Group. That will mean building up the capability in-house or outsourcing it, he said.
A customer survey conducted by BancBoston Robertson Stephens Inc., in conjunction with BizRate.com, showed that overall customer satisfaction declined as the 1999 holiday season wore on, particularly among consumers visiting online toy shops.
"Real-time, two-way, back-end integration is really a large part of the answer, at least from a technology perspective," said Chris Selland, an analyst at The Yankee Group in Boston.
Retailers could also improve forecasting with supply-chain management systems, carry extra inventory or hire more workers to meet customer need, he added.
Helen Frongillo of Somerville, Mass., asked LillianVernon.com to mail the building blocks she bought online for her grandchild to her daughter's home in Bar Harbor, Maine. Instead, the blocks arrived in Somerville, and Frongillo footed the bill to mail the gift to Maine.
David Hochberg, a spokesman for Lillian Vernon Corp. in Rye, N.Y., said the company would have been happy to pay the added shipping charges if Frongillo had called.
The company "has an old Web site," Hochberg said. He acknowledged that Web orders are manually re-keyed into back-end systems, which may have contributed to some errors. But he promised that the problems would be solved soon when the company launches a new, more technologically sophisticated site.
However, customers who had bad experiences may not ever shop online again. "I really don't think I would because you can't depend on it," said Frongillo, who also had problems with timely deliveries from another online merchant.
Nearly 10% of online shoppers surveyed by the Software & Information Industry Association, a Washington-based trade association, found their holiday experiences annoying enough to abandon their purchases.
Retailers need to "improve the hooks between customer service and order systems," said Anne Griffith, research director at the association. But she acknowledged that the cost of such back-end Web integration is at least $100,000.
Griffith said electronic retailers who can't afford to connect inventory systems to the Web are good candidates for outsourcing. "While it may look expensive on first blow, it's very expensive to build it yourself - and it's very expensive to lose customers," she said.