A new report finds that online retailers will miss out on $20.7 billion of transactions in 2001.
According to ‘Online for the Holidays’, a new brief released by Datamonitor, online retailers in North America and Europe will lose out on $20.7 billion in 2001 due to poor online customer service. Datamonitor found that 69.4% of online transactions this year have been or will be abandoned.
The most popular reasons that online buyers cited for abandoning their shopping carts were slow processing speed of purchase orders, concerns over security and high shipping and handling costs. Of the 69.4% of transactions that were abandoned, 8.1% were lost because retailers failed to offer consumers a method to have queries answered while they were shopping.
While online retailers did increase their investment in CRM technologies over the past year, it will take a shift in strategy to avoid future losses. Online retailers have been too focused on the logistics of selling over the Internet. In order to adequately service customers, they must focus on the customer rather than the channel.
The news is mixed for technology vendors, as certain areas will benefit more than others. The downturn in the economy has caused retailers to shift their focus from what would attract new customers, to how to retain current customers. As a result, technologies that enable increased customer satisfaction, such as web self-service, and technologies that better vendors’ knowledge about their customers will increase as a proportion of retailer technology spend.
Next year will find increased demand for marketing automation applications from multi-channel retailers – the apparent winners in the online retailing game. Therefore, marketing automation vendors, such as E.piphany and NetPerceptions, must ensure that their solutions can be implemented across multiple channels.
Despite the tragedies that struck the US on September 11th, consumers spending online has not faltered. While online retailing will be negatively affected by decreases in consumer spending due to lack of confidence in the economy, travel concerns will have an offsetting effect, with more people staying home for the holidays and buying gifts online for distant relatives.
