Can Online Retailers Combat 'Internet Fatigue?'

Ann All

Though it seems a little early to posit that online shoppers are experiencing "Internet fatigue," as a recent New York Times article does, growth in online sales does appear to be slowing.

 

According to Forrester Research, online sales will grow more slowly in 2007 than they did in 2006 in 18 of 24 categories it tracks. Book sales, for instance, will increase 11 percent this year vs. nearly 40 percent last year.

 

Similarly, Jupiter Research predicts that overall online sales will creep along at a 9 percent annual growth rate by the end of this decade -- not terrible, but far from the 25 percent growth rate experienced in 2004.

 

Part of the problem, says a Harvard Business School professor interviewed for the article, is that while physical stores have been working hard to upgrade the shopping experience for consumers, online stores haven't followed suit. Not only that, but because online shopping involves the same kind of mouse wrangling that so many of us do at our jobs every day, it just feels too much like work.

 

Retailers appear to be learning the same lesson that bankers did a decade or so ago. When you introduce new channels, consumers tend to use them all, not migrate from one to another. Such channels can be a competitive differentiator -- at least until everybody else has them.


 

Thus, retailers with both online and bricks-and-mortar stores must do the same thing that some financial services providers are trying to do: offer a consistent experience across all the channels and help customers move seamlessly between them. For retailers, that entails concepts such as allowing customers to buy goods online, but pick them up and (God forbid) return them in stores.

 

Of course, not all retailers have the "bricks" required for this so-called "clicks-and-bricks" strategy. Many of them will likely follow the lead of eBay, which is striving to make its shopping experience more akin to one that folks find in the physical world.

 

According to a recent Associated Press report, that includes adding more feedback criteria, making shipping costs more transparent, and introducing a feature that allows shoppers to create a wish list that will automatically enter them in new auctions if they fail to win auctions for certain items. Also in the works: product recommendation systems based on user preferences and shopping from mobile devices, social networking sites such as Facebook, and widgets on computer desktops.

 

Perhaps both eBay and online retail sites in general simply illustrate the point made by a Global Crown Capital analyst in the AP piece. "It's just that there's some finite limits to growth, and they're reaching that."



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Jun 28, 2007 11:14 AM Van Rompay Erik Van Rompay Erik  says:
The real issue is creating a good customer experience. The retail shops are used to do this but the online shops are a little bit more complicated as :1) there is no physical contact so the online shops need to build extra channels (like email surveys - calling delivered consumers) to measure satisfaction.2) the online experience can also mean that people go to the online shop for information and buy at the "brick" shop.3) the online experience is very price driven (looking for the best price) and the online shop needs to convince that the user has not only the best price, but also the best service.I do not agree with the article that you need to create a consistent experience. You need of course have a consistent message but the experience can be completely different - and I think it should be completely different.The web opens also a lot of thinks you couldn't do in retail stores - as it can also create a C2C environment.People rate your products/services... and you can work on that as these items are now publicaly available on the web.The online world has a huge opportunity to develop extra services "at a fingerclick away". For instance, by buying a book, I can propose extra services.For instance a cooking-book => I can give extra information on health issues (food related) but also give some vouchers for some nice restaurants (or shopping malls). I can also propose a link to an online wine-store so my client can make the right choice. Those things are extremely difficult to implement in a brick and mortar shop - but feasible on the Internet.As any shop, we constantly need to re-invent the customer experience and the opportunities delivered through the Internet and latest technologies are enormous. We just need to imagine it and do it....Are we ready to imagine new online-client-experiences ?Erik Van RompayWWW Turnaround Executive Reply

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