PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
Customers liked the online shopping experience but weren’t so enamored of the fulfillment end.
As the wildly successful 2003 online holiday shopping season wound down, shoppers weighed in on their satisfaction with e-shopping. Analysis of a survey conducted on a shopping search engine before Christmas yields strong clues about what’s making the web so successful. It’s clear that the bar of expectations is steadily rising-e-retailing is increasingly aligned with what makes customers happy and loyal. But as more retailers meet these higher standards, differentiation will become the key to growth.
Online customers think e-retailers, after a few false starts and ongoing fine-tuning, have nailed a few pivotal things:
What I see is what I get.
Consumers say that being able to get a solid sense of the product is fundamentally important to whether or not they buy it. In our survey of online shoppers in the days before Christmas, the score for Product Quality, one of the key drivers of customer satisfaction, was 89 on a scale of 1-100, higher than any other element. This is a major breakthrough; not long ago people were hesitant to buy things online because they couldn’t be sure what they would get. Shoppers rated their satisfaction with the condition of the product they received at 88, and at 89 for whether what they got matched what they ordered. These figures indicate e-retailers were successful in product presentation and ordering process. Data suggest that this is an area which finally satisfies customers and determines whether an e-retailer even gets a chance at making a sale.
Free shipping got online shoppers’ attention. In our survey, 55% of online shoppers said free shipping influenced their purchase decision, while 28% said it influenced them to purchase more to meet the minimum purchase amount to qualify for free shipping. E-retailers should consider incorporating this into plans for all time-sensitive retail seasons.
Making the purchase is not an ordeal. Consumers used to feel that trying to order something online was about as user-friendly as deciphering tax codes. No more. This year, online shoppers report high levels of satisfaction with the ordering processes of most sites, especially the convenience of the website (84) and the security of the ordering process (83). Despite room for improvement, this is one factor that’s fueling sales.
Site performance was not the deal-breaker some thought. While site performance problems were publicized during the holiday season, they had remarkably little impact on satisfaction. We saw consistency in site performance satisfaction scores while traffic volumes spiked and overall satisfaction held steady. Faced with the alternatives of shopping in store or going to another site, online shoppers displayed a bit of the charitable holiday spirit and granted e-retailers some latitude here. Performance disruptions beat standing in line at retail stores for most online shoppers.
Finding the product grew more important than finding out about the product. Over the holiday season, priorities shifted from finding information about products that were being browsed to finding the products themselves. Navigation became a top priority for 30% more sites by the end of the holiday season than it was in late November, with lower scores and higher impact on overall satisfaction. E-retailers should keep this in mind when planning their merchandising and advertising campaigns.
Price sensitivity centered more on shipping costs than product costs. Online shoppers generally found prices they expected and considered reasonable. Satisfaction with price of the transaction rated an 83, compared to 78 for the shipping costs. This is another aspect of the delicate balance of attracting and keeping customers. One of the advantages of the online world is the ability to quickly and conveniently shop for price, and this area shows strength, though not enough that loyalty is assured. With the wave of free shipping offers this holiday season, many e-retailers found expectations were set as much by the industry as by their own web site. E-retailers who are fine-tuning pricing strategies to improve customer satisfaction should proceed cautiously-their customers’ price sensitivity may not be as great as anticipated, and e-retailers may give up revenue without getting significant increases in satisfaction in return.
So what can an e-retailer do to break from the pack and stand out in ways that really matter to customers? Customers would like to see e-retailers do better in three areas, and indications are that improvement in these areas would produce not just increased satisfaction, but something more tangible-increased loyalty and buying.
Customers want help. Making a purchase is convenient online, but getting help is not. This is an area of continuing annoyance to customers, and could be costing some e-retailers sales and long-term loyal customers. If there is one thing that could be done to take e-retailing to the next level, it is addressing this problem. E-retailers who come up with a good fix will have significant added appeal to customers. Many e-retailers want people to solve their own problems by clicking around, and avoid the costs of call centers and live agents. But customers clearly find that most existing methods of online help are inadequate, and give it a barely passing grade. The lowest rated aspect of the ordering process was availability of help at a 67, which is almost 25% lower than satisfaction with the most positive aspects of the ordering process (convenience, 84, and security, 83) Some solutions that could deliver significant returns on satisfaction, and consequently boost purchases, include making a help phone number readily visible throughout the site, offering FAQs or Help sections that address common questions or problems and responding to the customer online through e-mail or live chat.