July 29, 2004, 12:00 AM

Better Self-Image

Online merchants give themselves higher marks in the 3rd annual Internet Retailer/ForeSee Results Insiders’ View of E-Retailing.That’s good and bad

Online retailers’ opinion of themselves is better than it was a year ago but is still below consumers’ opinions of the online shopping experience, says the latest Insiders’ View of E-Retailing survey from ForeSee Results Inc. and Internet Retailer. “That’s a good sign of future success,” says Larry Freed, president of ForeSee. “It means e-retailers are still striving for innovation and breakthroughs.”

This is the third year that Internet Retailer and customer satisfaction management company ForeSee Results have conducted the Insiders’ View of E-Retailing. In all three years, insiders have been harder on the industry than have consumers. But each year, insiders’ opinion of how they’re doing has gone up, rising from 58 of 100 in 2002 to 65 this year. And that gives Freed some pause. “If the score gets too high, I’ll get worried,” he says. “That will indicate that the industry isn’t going to strive any more and complacency means failure in the future.”

Caution

Freed characterizes the rising scores as “a little yellow flag.” “I won’t wave the flag yet, although I’ve got it in my hand,” he says.

In the first two surveys, retailers ranked as their three highest priorities their brand image as communicated by their web sites, product browsing and product information. Brand image remains a top priority this year as does browsing, but product information fell as a concern. “The images, the technical specs for electronics products or descriptive information for apparel have all gotten far better over the past couple of years,” Freed says.

One of the interesting shifts in insiders’ attitudes this year, Freed says, is that site navigation has popped into the priority list for the first time, replacing product information as a top concern. That means retailers believe that moving through their sites is becoming less smooth as they add products in ever larger numbers. “That reflects the rise of the super-retailing sites like Amazon where the amount of products is a whole lot more than it was,” Freed says. “In addition, a couple of years ago, traditional retailers didn’t put their complete line of products online and today they are. And so retailers are recognizing that the interface into that product mix has to improve.”

Changing interface

Related to the navigation issue is a concern that the look and feel of sites need improvement. “The user interface has not changed a lot over the years,” Freed says. The look-and-feel segment of the survey was the only area that registered a decline in insiders’ satisfaction, Freed says, with most other categories going up and two staying the same. “This indicates that retailers are getting frustrated with the challenge of how to present information to consumers.” He predicts that look-and-feel will rise in importance over the next six to 12 months.

At the same time, though, online retailers are still casting about for what they need to do to improve the online shopping experience. 41% of respondents cited prioritization of web site expenditures as one of their biggest challenges.

Retail insiders gave themselves the best scores on the ordering process, 72, and functionality, 69. The worst scores came in returns, 54, always a low-scoring area; account set-up, 58; navigation, 59 and privacy, 60.

kurt@verticalwebmedia.com

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