Large percentages of online shoppers who place items in a shopping cart are continuing to leave the site without making a purchase. The rates vary, based on individual retailers' experiences, from 30% up to as high as 70%. Imagine shopping at a grocery store where half of the customers on average dropped their baskets in the aisle and walked out the door to resume shopping elsewhere.
Perhaps the saddest part of this picture is that a significant percentage of those transactions could have been salvaged if the companies had supplied better customer service. Focus groups, surveys, and industry experts all agree. The main reasons for abandonment include the following:
- Addition of shipping costs (and taxes)
- Privacy concerns, exacerbated by requiring customers to create an account
- Security concerns
- Fear of being stuck with undesirable products
Rob Schmults, Vice President Business Management at GSI Commerce, is an expert on e-commerce. According to Schmults, the "sins" of businesses include their inability to remove barriers that impede a buyer. Sins of omission include:
- Not considering the whole relationship with the customer
- Creating a site that addresses the product line rather than the customers' needs
- Creating a site that reflects internal business structures rather than buyers' needs
And although most customers these days can find their way around a Web site, it's still necessary to add to Schmults's list an additional number of failures in execution. These sins of "commission" include:
- Poorly marked navigation structures
- Improperly labeled or confusing checkout processes
- Overly flashy introductions or high-tech ads that detract from customer conversion
- Unclear return policies
The Current State of E-Tailing
The late 1990s saw countless companies set up shiny new dot-com enterprises or Web sites that were counterparts to their brick-and-mortar businesses, but many of these online entities lacked substance. It took a few years for things to shake out, but by now businesses online have learned the hard way that customer satisfaction is still earned much the same way regardless of how the customer chooses to buy the product. So, given that the novelty factor of the Web is long gone, are there still opportunities?
You bet.
The increase in online sales has been fairly steady every quarter since the year 2000, and it continues to outpace the growth in retail sales. The Census Bureau of the Department of Commerce estimated U.S. retail e-commerce sales for the third quarter of 2007 at $34.7 billion, up 3.6 percent from second quarter sales, while total retail sales increased only 0.8 percent. Similarly, third quarter 2007 e-commerce sales increased 19.3 percent over third quarter 2006, but total retail sales increased only 3.8 percent for the same period. Holiday sales for 2007 rose by 19 percent over 2006, while overall retail sales rose just 4 percent.
Now just imagine if 50 percent of all shopping carts hadn't been abandoned....
Where Do We Go from Here?
One additional factor that emerged from Christmas 2007 statistics was a 1 percent drop in customer satisfaction. Now a single percentage point may not seem significant, but it may well account for the fact that the increase in online sales, while significant, still fell below what had been projected by many industry experts.
Improved customer service and a more customer-centric shopping experience can, per a Datamonitor spokesperson, salvage many lost transactions. The components of good online customer service may be described as follows:
- E-mail management systems, to handle large numbers of inbound e-mails quickly and accurately
- Web-based self-service systems, which allow customers to answer their own questions on the Web via case-based reasoning or links to FAQs.
- Web collaboration, where agents can actually guide customers through the Web site to answer questions.
- Text chat, which is essentially instant messaging on a Web site between a Customer Service Representative and a customer.
- VoIP, the initiating of a Web-based voice conversation between the representative and the customer.
Two leaders in the e-service business are Kana and eGain. Kana, a customer-contact management company, offers a suite of customer-facing applications. These applications support interaction via the Internet, phone, e-mail, mobile devices, faxes, and even the old 20th-century way…in person.
Kyle Flaherty, past Public Relations Manager with Kana, noted that e-service could be "broken down into four service modes," as follows:
- Pro-Active Service -- Supplying customers with information they need, before they know they need it.
- Self-service -- Empowering customers to find the information they need.
- Assisted Service -- Creating venues that enable a customer to interact with service representatives via a variety of formats.
- Virtual Assisted Service -- Using software to clone the company's best sales force, and create virtual assistants.
While not yet widely used, virtual assistants can help bridge the perceived gap between the primarily self-service web environment and the traditional retail market where salespeople are immediately available to answer questions and assist you with everything from fitting rooms to return policies. Live Chat is another option. By using chat options, customers can feel like a friendly hand is guiding them through the checkout process, and they are less likely to abandon their shopping carts when someone is helping them. Live Web Collaboration can take this one step further by actually pushing information pages to the customer at appropriate points in the chat, ensuring that the customer gets exactly what they need to spur conversion. With a process called synchronization, a customer-service representative can also assist a customer in filling out a form during a chat session. You may think that all of this comes dangerously close to handholding, but the beauty of the process is that it is entirely at the customer's discretion.
It's the Customer, Stupid!
A Datamonitor study has advised that virtual handholding is exactly what is needed to improve customer relations and recover lost sales. In other words, if e-commerce companies do not want customers abandoning carts in the aisles, they need salespeople and customer-service representatives on the floor talking to their customers--one way or another.
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