Online retail business gets mitigated
results over the
holiday season

Etailers' delivery time: first difficult
attempts at
standardizing
measures

For the first time in the e-commerce short history, the 2000 online holiday season was a real success as far as consumers are concerned. According to the latest NPD report, satisfaction rates well prove it: 92% of the Internet users who purchased online during this period reported being satisfied with their online shopping experience over this period and 57% even reported being very or extremely satisfied.

When compared to the 1999 online holiday season, such results well prove the tremendous progress cyber-retailers have made over the last year to make online payments more secure (sites design, customisation, logistics, customer service).

What's even more interesting is the fact that 68 percent of online shoppers who have bought part of their Christmas presents online said they will make an online purchase during the first quarter of the New Year and 40 percent reported that they will do it within the month of January 2001.

This intention rate seems very high to me and well proves that online shopping is fast becoming a common behaviour for online shoppers who are already past the experimenting stage.

A site such as Amazon.com, which has been recognized as being the most popular online retail site, can contemplate the future peacefully.

The site will now be able to amortize its main investments, which involved the creation of a world-known brand and a huge customer database (more than 25 millions today), quicker and quicker thanks to its customized consumers who will now be able to make purchases all year long: Amazon has now truly entered a virtual circle.

And yet the picture NPD e-Visory drew of the 2000 holiday season is not as rosy as these figures seem to suggest since 63 percent of online shoppers said they encountered some difficulties while making a purchase, even though these problems were not serious enough to impact their overall satisfaction.

The problem online shoppers most frequently seem to be facing are items that are out of stock even though they are displayed on the site (31 percent of the respondents).

There is nothing more frustrating for an online shopper than realizing, after he has selected a long list of search criteria,… that the items are out of stock! Should the same phenomenon happen twice or even three times during the same search session, the shopper would definitely get a very bad impression since he had expected to visualize and maybe even buy the given item and then realizes he has been fooled.

The priority for online retail sites now consists in interfacing their online database with the database of their own computing devices so that no breakage might take place in the news update.

The second frustrating element concerns the bad management of peak traffic by the web sites themselves (23 percent of the respondents). It seems that retail sites are not able to face their load increase.

It is worth mentioning the damage these service breaks can make? Such breaks can be compared to temporary and untimely closing-downs of shops in the real world.

Another major dissatisfaction element (21% of the respondents) is the impossibility for the net surfer to find the item he is looking for.

My frequent analyses of the web (cf: the eIndices) well show that many "item" search engines still fail to come up to customers' expectations, whether it is due to the reliability of the answer or to the basic design of the engines themselves.

Finally, it seems that logistics-related problems which greatly caused havoc in e-tailer sites over the 1999 holiday season are not totally settled since 14 percent of online shoppers declared receiving their items late and 6 percent even claim they never received their items, which leaves e-tailers far behind traditional mail order.

Huge investments will have to be made this year in both computing and logistics sectors if we want the 2001 online holiday season to be a real success!

Source : NPD

In my opinion, the most accurate way to assess how efficient an e-commerce fulfilment order really is consists in measuring the time between the moment a web surfer place an order and the moment it is shipped to Courier Collection.

Measuring fulfilment in any other way means paving the way for all types of interpretation: use or not of standard or express shipping by the consumer, efficiency of the shipping company itself (whose choice is often left to the customer)…

This explains why I am not quite convinced by the criteria used by Bizmetric.com to compare fulfilment time between e-tailers.

According to Bizmetric, the average fulfilment time on the week of November 27 was 4 days, 8 hours and 46 minutes.

In Bizmetric's report, Outpost.com appears as being the fastest American site with a fulfilment time measured of two days, 10 hours and 8 minutes.

As for Amazon.com, it appears as being one of the worst pupils with a fulfilment time measured of 5 days, 15 hours and 10 minutes along with Barnesandnoble.com (6 days, 11 hours and 41 minutes).

And yet, I cannot consider such classification as being reliable.

First of all, one cannot compare different economic sectors without the risk of making a mistake. An online bookshop such as Amazon.com might not have such or such book (issued six months or a year ago) available at once but its activity cannot compare with a site that sells software or hardware (Outpost.com).

The measure made by Bizmetric does not take into account the trade specificities of e-tailers.

My second criticism concerns the fact that it is often up to the consumer to decide the final way of delivery: priority mail, carrier, express or standard shipping… The site itself does not have anything to do with it and comparing two e-tailers without even knowing if mail, carrier, express or standard shipping can really be compared can only lead to incomplete results.

The only accurate way would be to measure the Order to Ship segment (moment spent between the order is placed and the actual delivery of the product to the carrier) and such measure should only include e-tailers dedicated to the same trade (cf: bookshops mentioned above).

I asked Frank DeFilippis, VP, Business Development and Co-Founder, about it and he gave me the following answer: Bizmetric presently uses the "Click to Finish" measurement system which includes the whole chain of elements. Such method can no doubt lead to inaccurate results but their next report, which concerns the festive season, will separate the "Order to Ship segment".

It goes without saying that the net surfer highly prizes the quality of the fulfilment process and compares it to any classical purchase he would make in a traditional store.

The delivery problem still remains the most important flaw of the e-commerce sector: a fast delivery at the lowest possible cost for the net surfer is the answer.

Trying to create a standard fulfilment measure is a good point for the consumer but also for the cyber-retailer who will now be able to compare his own achievements to his competitors' and will also manage to improve his logistics at the same time.

Let's congratulate Bizmetric for its great initiative but let's ask them to refine their results so that they become really significant.

Source : Bizmetric