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Friday, December
1, 2000
Consumers Will Spend $36 Billion for Online
Gifts
A Web retailer's success or failure as a gift-buying
destination depends on how well its presence and offerings
match what the 20 million online gift buyers expect when
they search for gifts online. According to a new Technographics™ Report
from Forrester Research, Inc., Web retailers need to understand
which products online gift buyers seek, when gift buyers
turn to the Web, and what drives satisfaction with online
gift purchases.
Understanding which products resonate specifically
with online gift buyers and how particular gift categories
vary by occasion will help retailers push the right gifts
at the right times. On average, gift buyers spend $68 per
online purchase. And while products like clothing and books
hover near the top of the popularity list for every occasion,
the gift that takes the cake differs with each event. For
example, toys top the list for child-centric gift-giving
occasions, books are the favorite for adults' birthdays,
and flowers are most popular for Mother's Day and Father's
Day.
"Having the right product mix is one thing,
but it won't do any good if the consumer doesn't think of
the site when going online to buy," said Christopher M. Kelley
analyst at Forrester Research. "Consumers are demanding the
perfect gift, at the right time, and hassle-free -- in this
competitive landscape, e-tailers must deliver on this promise
or perish."
The next step to luring online gift buyers
is understanding when consumers go to the Web to purchase
a present. Shoppers in the market for low-risk gifts, such
as books or T-shirts, know exactly what they want and where
they'll buy it when shopping on the Web. However, consumers
searching for big-ticket electronics will search on a couple
of sites to comparison shop for the best price before making
a purchase.
Retailers that minimize the risks associated
with buying gifts online will satisfy consumers. Having the
right product mix and being in the consumer's head doesn't
amount to much if the site can't satisfy the consumer. The
top priority for online gift buyers is that their gift arrives
on time. No gift giver -- on- or offline -- wants to spoil
a party and disappoint a hopeful gift recipient by telling
him that his gift hasn't arrived -- 81% of gift buyers reported
that online delivery is key. Also, since most gift buyers
already know what they want and where they want to buy it
by the time they hit the Web, they can't be bothered by bad
search and product category guessing games. Online gift buyers
love the Web because it saves them time -- 62% of Web buyers
said that they saved time buying gifts online versus going
to a store.
For the Report "Pulling In Online Gift Buyers," Forrester
conducted a mail survey of 10,536 American and Canadian online
households. Forrester also drew data from Forrester's Technographics
2000 North American Benchmark Study of 80,887 American and
Canadian households. From these surveys, Forrester found
that 57% of Web buyers have purchased gifts online, and 84%
of online gift buyers are happy with their most recent Web
gift purchase. Web gift buyers also look to the Web throughout
the year -- 62% have purchased a Christmas or Hanukkah gift,
59% have purchased a gift for an adult's birthday, and 32%
bought a Mother's Day or Father's Day present.
Online Retailers Improve Site Infrastructure
Fifty-six percent of online retailers say they are prepared to handle
high order volumes this holiday shopping season, compared to just 10
percent who were confident of their sites' infrastructure last year,
according to Jupiter Research, the worldwide leader in Internet commerce.
Jupiter cautions, however, that the increase in online shopping traffic
this season and online retailers' lack of customer service contingency
plans could leave shoppers hanging in the event of a site crash.
Media Metrix, in a separate release today, announced
that unique visitors to retail sites during the week
of Thanksgiving and Black Friday increased by 40.3
percent compared to the same week last year, with the
Media Metrix Online Shopping Index climbing from 25.1
million unique visitors to 35.2 million.
Jupiter's Executive Survey of online retailers found
that while 51 percent of online retailers have made
significant infrastructure investments, a mere 25 percent
have contingency plans in place to handle potentially
overwhelming customer service inquiries. Jupiter projects
that, while online retailers' order fulfillment operations
-- including demand planning, processing and shipping
-- will improve over last year, internal communications
systems may not be ready to handle the deluge of customer
inquiries following potential site outages.
Based on its executive survey, Jupiter cautions that
online retailers' customer call centers could be overwhelmed,
causing potentially serious delays in response times
and overall poor customer service. Only half of online
retailers have solid communications protocols in place
to effectively communicate internally during site outages
and only 25 percent of retail sites said they would
outsource peak customer contact volume this holiday
season.
"The good news this year is that on the whole, online
retail infrastructure is in better shape than in years
past," said David Schatsky, Director of Jupiter's operations
and infrastructure research. "Online retailers that
survived benefited from past seasons' experiences,
however many retailers might not be ready for the unexpected.
Many do not have back up staffing plans for customer
service overflow nor do they have a crisis plan to
handle customer questions during outages."
Overall, Jupiter advises online retailers to under-promise
and over-deliver. Steps retailers can take now:
1) Monitor order backlog daily.
2) Communicate frequently with
customers about changes in order status.
3) Keep flexible staff on call
in distribution centers and call centers.
4) Make sure that promised delivery
times can be met each day.
Jupiter also advises online retailers to monitor customer
contact volumes and continually reassess staffing forecasts,
they should develop multi-tiered internal overflow
support by preparing non-service departments, such
as marketing, merchandising and finance. Key internal
departments should be notified of anticipated peak
times throughout the holiday season and develop a mutual
understanding of how customer support can be handled
effectively across the organization, if necessary.
News Tidbits (appears every day on front
page)
-
Oracle is getting into
the Web directory business.
The company plans to open
a B2B directory in conjunction
with IBM, Microsoft, and
Arita. It will open in
First Quarter 2001.
-PetSmart.com is the latest
Web venture to pull its IPO from the marketplace
citing "unfavorable marketing conditions."
-Hollywood studios are rushing
to put together plans for online downloadable movies
for sale, citing continued piracy fears if they don't
do it fast.
-"You've Got SPAM." AOL
is now selling an email pager that lets you know
when you have email, allows you to check it, and
allows you to respond. Called the AOL Mobile Communicator,
it sells for over $300 and requires a monthly fee
of $20.
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