The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Web retailers planning to take a long winter’s nap after Dec. 25 had better ask Santa for an espresso maker. The days after the holidays are as critical as the ones before it, offering a narrow window to correct mistakes, evaluate promotions and merchandising decisions, and handle returns gracefully.
“It’s not enough to make it through the holidays without breaking down or coming apart at the seams,” says Ken Seiff, CEO of Internet fashion outlet Bluefly.com in New York. “We need to make it through the post holidays to be a success.”
Of course getting orders right the first time is the first step on the road to a successful holiday season. Bluefly began preparing last January by adding capacity to its server and redesigning the site for easier navigation. More recently, Seiff has accelerated marketing, opened a larger distribution center and staffed up from 12 to 60, a move that included bringing customer service in house.
Christmas “is a no-mistakes-tolerated time of year,” says Neil Stern, a partner at McMillan/Doolittle, a Chicago retail consulting firm. “Customers don’t anticipate anything going wrong, and they don’t want to.” Web retailers can defuse many problems with clear communication that’s backed up by a fully staffed customer service operation to answer questions and calm shoppers jittery about ordering online. It’s also important to post the last possible order date to ensure delivery by Christmas and clearly mark items out-of-stock or
on back order.
After a good selection at decent prices, fulfillment is the truest test of a store’s credibility. With many products, especially toys, no amount of free shipping will make up for late arrivals. “We are in the Santa Claus business,” says a spokeswoman for Pleasant Co. in Madison, Wis., which makes American Girls dolls and books. “We do everything we can to get it there by Christmas.”
No e-retailer is perfect, and how well a store mops up when a mistake occurs will say a lot about the customer’s last word on its performance. Still, this year’s Web shoppers will take a tougher view. “While last year was a race to get online, this year’s consumers will be more discriminating,” says Jill Frankle, director of retail at Gomez Advisors, an e-commerce consulting firm in Lincoln, Mass. “It’s not just about price, but about an overall shopping experience.”
That means giving shoppers access to a live person-not just before the holidays but during the aftermath. Pleasant Co. hires up to 3,000 seasonal employees each year and puts telemarketers among them through a week of intensive product training before they answer their first call. Toysmart.com, an online toy store, looks for customer service reps who have experience with children and can answer detailed questions. The same agents should have clear information about returns and other post-holiday questions.
Returns are inevitable, and Web merchants who make the process painless will score points with their customers. Bluefly has added automation and streamlined returns so that fewer people handle them.
Retailers with both a Web store and bricks-and-mortar locations have an upper hand over pure-plays if they allow customers to return goods to a physical store. At Nordstrom.com, the return policy is simple: “We don’t want you to have a piece of merchandise if you’re not happy with it,” says Colleen Chapman, director of Internet marketing.
Nordstrom hedges its bets by sending a return envelope with each Web order. But the retailer also will handle returns of goods purchased online in any land-based store-where an exchange or additional merchandise might result in even more business.
The Jurassic days of online shopping are over. Customers will not tolerate a site that breaks down or delays answering their questions.
Last year, an adequate site and a fair price meant moderate success online. Not this year. “The adults are back in charge,” says Patrick Rafter, Toysmart’s director of communications and public affairs. “It’s not Web designers making marketing decisions like last year. And you can never forget: The competition is just a click away.”