The Grinch That Stole Online Sales

By Geoff Galat, Tealeaf

Retail sales growth is likely to come in at a record low during the fourth quarter of 2008, making it more critical than ever to capture every possible sale. The author offers sound etail advice for the holiday season - and beyond.

The National Retail Federation (NRF) projects that consumers will spend 1.9 percent more this year on holiday shopping than they did last year (an average of $832.36) - the lowest year-over-year increase in planned consumer spending since the annual survey began in 2002. In addition, according to Nielsen Online, consumers plan to spend 2 percent more of that holiday budget online vs. the amount they spent online last year (41 percent).

In such conditions, retailers need to pay close attention to their online channels and make sure their customer experiences are optimized for this holiday season. That consumers are moving online makes sense ÃÆ'Â.Ã.Ã.‚¬Å¡Ã‚¬Ãƒ.Ã.•¬Ã…" the web can save both money and time, and offers the convenience of enormous selection and comparison shopping at their fingertips. In fact, a recent Harris Interactive survey, commissioned by Tealeaf, revealed that 35 percent of adults online in the United States generally prefer to conduct business online.

But what happens when a consumer tries to purchase online and something goes wrong? Perhaps the consumer was not able to log in, her shopping cart mysteriously emptied or the site returned a cryptic error message. In a physical store, assistants are readily accessible to help customers. Also, leaving a store to find a new vendor would require substantial effort. Online however, competition is only a click away and consumers can easily take their dollars elsewhere.

Online business success requires an effective, intuitive website. Without one, frustrated online customers will go straight into the arms of competitors. The impact of poor online customer experiences is much bigger than you might think. The Harris survey identified a rapid wave of consumer abandonment that directly correlated with online problems. Forty-one percent of U.S. adults online who experience problems when conducting online transactions would abandon or switch, representing a $57 billion potential impact on revenue. This sum is huge and underscores the importance of delivering upon consumersÃÆ'Â.Ã.Ã.‚¬Å¡Ã‚¬Ãƒ.Ã.‚¬Å¾Ã‚. expectations in order to protect online revenue.

But the impact of poor customer experiences doesnÃÆ'Â.Ã.Ã.‚¬Å¡Ã‚¬Ãƒ.Ã.‚¬Å¾Ã‚.t stop there. Word of mouth is a powerful influence with far-reaching impact. The Harris survey revealed that among those who experience problems when conducting online transactions, more than four in five (84 percent) share their experiences with others and more than half (53 percent) tell their friends and family specifically in order to discourage them from using that website or doing business with that company. As retailers weather this holiday season and prepare for business in the new year, they must focus on delivering the best site experiences possible.

Improving online customer experience and providing stellar online customer service requires organizations to have one view of the online customer. An effective customer experience management (CEM) solution captures and records what each customer is doing and seeing in real time on site visits. This qualitative information about true customer behavior provides a common language for the entire enterprise.

With the information provided by CEM solutions, companies can become more adept at constantly improving online customer experience by implementing five steps: 1) monitoring customer experience key performance indicators (KPIs) such as shopping cart abandonment rates, 2) proactively examining and responding to known technical issues, 3) listening to customers and gaining a better understanding by combining their feedback (via the call center, voice of customer solutions, etc.) with CEM data, 4) prioritizing customer experience issues based on business impact and 5) observing actual customer behavior by sampling sessions on a regular basis.

Strategic companies are also bearing in mind that insights gained online can and should be fed back to the offline channel as well. After all, online experiences effect offline, and vice versa.

The Harris survey also found that approximately 56 percent of adults online said that if they experience a problem conducting a transaction online, they would be less likely to buy from the same company offline.

A fully integrated customer experience strategy ensures success across all channels - and ultimately brings it to the bottom line.

Geoff Galat is vice president, marketing and product strategy, Tealeaf.