How to Jingle All the Way

SAN FRANCISCO (08/17/2000) - Online retailers that want to emerge from the coming holiday season with rosters of satisfied customers must focus on customer support and security, and must come clean about shipping charges.

That's the word from several recent studies.

Despite the rarity of site security failures at major Net shopping sites, a study by the e-commerce research firm cPulse found that fears about site security are the top e-commerce deterrent.

"Security is the No. 1 detractor to consumers shopping online," says Jody Dodson, executive vice president of cPulse. "If a site is trying to enact commerce without any form of security, they might as well pack up and forget about it." Web sites, the study says, should prominently post their security policies, written in layman's terms.

A separate study released last week by the Gartner Group Inc., which owns cPulse, found that even the most popular e-commerce sites fail to provide high-quality customer service. In fact, not one of the top 50 sites earned "good" or "excellent" ratings for customer service.

Hidden shipping and handling costs are another beef with e-commerce sites, according to cPulse. Sites that fail to disclose such costs until the end of a tedious process inspire many would-be customers to abandon their shopping carts at checkout. Dodson says shipping charges for a low-cost item can be particularly troublesome, as they may meet or exceed the cost of the item.

According to Datamonitor, 7.8 percent of abandoned online shopping carts could be salvaged with better customer service. That accounted for a loss of US$6.1 billion last year.

Because many dot-coms are renewing their push to achieve profitability in the near term, waiving shipping costs is not a realistic option. One way around the problem may be for online merchants to build shipping and handling costs into the price of items.

An approach that has been employed by catalog retailers for years is to prominently post pricing schedules for shipping and handling early in the transaction process. Being up-front in this way may not only soothe consumers - it could also increase order sizes, because per-item shipping costs dwindle as the amount of goods shipped increases.

An honest retailer can also build customer loyalty much more easily than one that continually disappoints its customers. E-commerce sites can learn from customer-service blunders made last December by online retailers that over-promised on delivery capabilities.

Toysrus.com, Macys.com, CDnow.com and KBkids.com were among seven e-retailers fined last month by the Federal Trade Commission for violating the Mail and Telephone Order Rule during the 1999 holiday season. The seven companies were forced to pay civil penalties totaling $1.5 million for failing to provide buyers with adequate notice of shipping delays and for promising specific delivery dates when no such specificity was possible.

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