June 29, 2010, 1:40 PM

Know thy customer

Online retailers need to better understand their customers, says a new report.

Lead Photo

Lauren Freedman, The E-tailing Group Inc. president

Know thy customer is important for all merchants, including retailers and manufacturers trying to seize larger footholds online. The mantra can mean everything from offering apparel sizes and fits that make sense to U.S. online shoppers, rather than reflecting global norms, to understanding whether customers want products immediately or are willing to wait for them to be customized.

Those are some of the tips offered in a report entitled “The Emerging Retailer—A Guide for eCommerce Powerplays,” written for e-commerce consulting firm Acquity Group LLC by Lauren Freedman, president of research firm The E-tailing Group Inc.

“Consumers are choosing to both research and shop via the web in increasing numbers, making a strong web presence a must have for both smaller merchants and global manufacturers,” Freedman writes. “Consumers understand and expect sophisticated shopping experiences with elevated service levels.”

When it comes to customer service, retailers and manufacturers must accept the realities of the modern marketplace, she writes. “Meeting today’s standards of 24-hour turnaround on e-mails and knowledgeable customer service reps should be top-of-mind. Service can go from an internal nightmare to a differentiation point, and doing it right the first time should be the preference. Stellar customer service is the primary reason why many have achieved success status and a warning for those looking to cut corners.”

For inventory, the report advises that retailers and manufacturer web sites should be managed at the SKU level, as opposed to doing so on a grand scale. “With more merchants seeking drop-shippers to reduce their inventory burden, it is advisable that if you have orders being fulfilled from multiple partners you need a strategy to understand how back orders will be handled.”

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