Message to E-Tailers: Deliver Better Service or Become E-Toast

According to a new study by Mercer Management Consulting, e-tailers will crash and burn this holiday season if they fail to improve their service.

The survey of 1,019 U.S. Internet users found that e-tailers are having difficulty building a loyal customer base that will continually spend money at their site. Mercer vice president Richard Christner feels that the potential benefits of a burgeoning e-commerce economy could elude e-tailers that fail to anticipate changing customer priorities.

Growing Sales Don’t Necessarily Mean More Profits

Although the study revealed that while 38 percent of those who bought books online planned to buy more, only 24 percent said that they always buy them from the same Web site.

Online stock investors showed even less loyalty to online brokerage sites. The survey found that 15 percent of online traders would be willing to switch online brokerages in the next 12 months — while just 4 percent of the customers of other e-tailers are likely to switch.

Shopping Online, Buying Offline

The study also found that 61 percent of users with at least two years experience online are likely to bypass such search engines as Yahoo! and go directly to e-commerce sites.

Nonetheless, analysts feel that a more savvy user is a double-edged sword for e-tailers: On one hand, they’re more likely to come back to a Web site if pleased, but on the other hand, less likely to return if they experience any sort of glitch.

In addition, the study confirmed another disturbing trend: Consumers prefer to use the Web to consider products before going to brick-and-mortar stores to buy. More than twice as many people research toy purchases online as buy toys there, and more than four times as many shop for home and garden products as buy online.

What’s The Problem?

The consensus among industry observers is that poor service is the main obstacle to building an inventory of repeat customers for e-tailers.

“If you can’t respond to customer expectations in real time, you run the very real risk of becoming e-toast,” warned Albert H. Langsenkamp, chairman of Sigma Micro Corp.

Langsenkamp cited some disturbing statistics:

More than 90 percent of the e-commerce sites studied do not offer electronic check capabilities.

70 percent do not offer multiple “ship to” options.

71 percent do not allow the customer to find out the current order status in real-time after placing the order.

65 percent do not offer up-sell or cross-sell capabilities.

61 percent do not provide real-time product availability information.

More than half of the sites do not provide a timely e-mail acknowledgment of the customer’s order.