Saturday, December 23, 2000
More Purchasers, Purchases and Spending Online
Preliminary results show that this holiday season, the number
of online purchasers is up, with 49 million consumers
spending, on average, 38 percent more on holiday gifts than
year’s online purchasers, according to new research
released today by The Boston Consulting Group and Harris
Interactive. Online retailers are, however, failing to
fully capitalize on growing consumer demand as many potential
online holiday shoppers have opted not to purchase online.
As of December 11, the average online holiday shopper had
already bought six holiday gifts online totaling $234, up
from $170 last year. In addition, the number of online holiday
shoppers has already grown 23 percent compared to the 1999
holiday season, with 40 percent of the online population
having bought a holiday gift online. Yet, a significant percentage
of consumers who had earlier considered doing their holiday
shopping online have decided not to. Research conducted in
October, showed that 70 percent of the online population
was contemplating doing some part of their holiday shopping
online. The new research shows that twenty-seven million
of those consumers, who represent 22 percent of the total
online population, decided against purchasing holiday gifts
online this year.
"While online retailers have been able to encourage
individual consumers to do more holiday shopping online,
there are still far too many consumers sitting on the fence," said
Michael Silverstein, BCG Senior Vice President and Leader
of the firm’s Consumer Practice. "These are the
consumers who won’t believe in online retailing as
a reliable alternative to traditional shopping during the
holiday season until they try it for themselves, or a friend
or relative convinces them otherwise. Word of mouth drives
usage. So far, consumers are telling each other, it’s
a mixed bag."
Leading into the final two weeks of the holiday shopping
season, the pressure has been on online retailers to build
on their momentum. Many online holiday purchasers indicated
that they are continuing to shop online and eight percent
of the online population still plan to buy a holiday gift
online, but have not yet done so. The key to capturing this
demand is to provide a superior online purchasing experience.
The survey revealed that 79 percent of online holiday shoppers
were either satisfied or very satisfied with their holiday
shopping experience, with 90 percent indicating that the
product selection online was as good as or better than it
is off-line. Twenty-one percent of consumers, however, have
experienced a purchasing problem of some kind – such
as receiving an incomplete order or receiving the wrong or
a damaged gift. So far, eleven percent of gifts ordered online
were received later than the scheduled delivery date.
"Despite nagging problems with delivery, consumer satisfaction
remains quite high. Only three percent of consumers have
expressed a clear dissatisfaction with their online holiday
shopping experience," said Lori Iventosch-James, Director
of e-Commerce Research for Harris Interactive. "As we
enter the final few days of the 2000 holiday season, online
retailers will have to make a concerted effort to ensure
that all their fulfillment systems perform flawlessly as
consumers await their last minute orders. This will be the
true test for many online retailers."
Looking forward, these mixed findings offer a warning for
online retailers in the New Year. "The online retail
market in 2001 will be even more exacting for online retailers," said
Peter Stanger, BCG Vice President and Topic Leader for Business-to-Consumer
E-Commerce. "Consumers’ expectations are continuing
to rise. If online leaders can achieve a level of consistency
of service and reliability that leading catalogers have achieved,
there will be a boost in volume, confidence and value. Too
many times, out of stocks, unreliable fulfillment and difficult
transaction closings have made the novice wary of time-critical
These findings were obtained from an online survey conducted
by The Boston Consulting Group and Harris Interactive from
December 8 to 11. This quantitative survey was completed
by 1,930 Internet users over the age of 18 who live in the
U.S., selected from Harris Interactive’s panel of more
than seven million respondents. Results were weighted to
reflect the U.S. online population.
Nordstrom.com Wins Apparel PowerRankings
Nordstrom.com's superior online shopping experience secures
its victory in the latest rankings of online apparel retailers
by Forrester Research, Inc. Forrester PowerRankings combines
survey data from online consumers and unbiased shopping
tests to provide objective rankings of the leading US eCommerce
sites. The companies that rank below Nordstrom are Lands'
End, L.L.Bean, Victoria's Secret, Old Navy, Eddie Bauer,
Spiegel, Gap, J.Crew, and J.C. Penney.
Nordstrom's site sets a high bar for online shopping with
a topnotch search engine, easy returns, and excellent customer
service. The site provides links to return, privacy, and
security policies on every page during checkout, and customers
can ship to multiple addresses within one order. But Nordstrom.com
-- like all sites -- has its flaws. For example, despite
knowing a shopper's address, the site only estimates tax
After winning two previous apparel PowerRankings, Lands'
End winds up in second place. Its customer service representatives
pick up the telephone in seconds and the return policy is
unconditional, but online order tracking requires entering
a number from the order confirmation email, tax is estimated,
and there is no express checkout.
L.L.Bean comes in a strong third with clear inventory information,
search results that can be refined, and fast email responses.
But the site's to-do list should include creating an express
checkout and adding online order status and history.
"In its first PowerRankings appearance, Nordstrom managed
to defeat two-time champion Lands' End," said Tom Rhinelander,
senior analyst at Forrester Research. "Both sites offer
excellent customer service, but Nordstrom’s top scores
in features, delivery, and returns put it over the top."
Weak scores across the board sink J.C. Penney to last place.
Shoppers must endure the longest first-time checkout process
of the ranked sites, and the order total is not given at
checkout or in the order confirmation email. However, loyal
customers have the option to pick up or return purchases
at stores, and the site offers unlimited returns.
For the latest PowerRankings, Forrester surveyed 20,000
consumers from the NPD Group's online panel. These consumers
identified the eCommerce sites that they purchased from most
recently and rated their experiences. A team of Forrester
shoppers then evaluated the shopping experience on sites
that have a statistically valid number of consumer respondents
by performing a series of rigorous tests. The consumer data
and Forrester shopper scores were then synthesized and weighted,
with consumer views accounting for two-thirds of the overall
PowerRankings. A complete set of PowerRankings results --
both consumer and Forrester shopper data -- is made available
to all ranked companies free of charge.
News Tidbits (appears every day on front page)
- According to an AP story appearing in USA Today, "Raising
questions over who controls the Internet, Yahoo! is asking
a federal judge to block a French court's order that it keep
computer users in France from accessing online auctions of
Nazi paraphernalia. In papers filed in U.S. District Court
in San Jose on Thursday, attorneys for Santa Clara-based
Yahoo! said the French court violated the company's free
speech rights and does not have jurisdiction over content
produced by an American business."