Saturday, November 25, 2000

Power Rankings Shows What Attracts Purchasers

buy.com secured victory, due in part to its free shipping and fast customer service responses, in the latest PowerRankings of online electronics sellers 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 buy.com are Amazon.com, Best Buy, and Egghead.com.

buy.com fended off another strong showing by Amazon.com, winning a PowerRankings category for the first time. Low prices -- for both products and shipping -- have long been a hallmark of the site, but its speedy buying process, thorough online help, and quick-loading pages ensured its win. However, the site still has its weaknesses, such as having no real-time inventory information, express checkout, gift-wrapping, or customer reviews.

Second-place Amazon.com's site is easy to use and brimming with features like customer reviews, gift-wrapping, and the fastest express checkout of all the sites tested. But its customer service -- both email and phone -- continues to be a problem. The customer service phone number is nearly impossible to find on the site, and the Forrester shopper had to wait an average of four days for email responses.

"buy.com is usually the cost champion, but this is the first time the company has ranked first overall in a PowerRankings category," said Tom Rhinelander, senior analyst at Forrester Research. "While the shopping experience at buy.com continues to improve, its victory was no doubt aided by the deteriorating customer service at Amazon.com."

Best Buy takes top honors in customer service because of its quick email and phone responses. But to challenge the leaders, Best Buy must eradicate site failures during product searches and add shopper-friendly features like express checkout and gift-wrapping. Business-focused Egghead.com continues to get better, but it still lacks many basic features like an online address book and product reviews.

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 PowerRanking. A complete set of PowerRankings results -- both consumer and Forrester shopper data -- is made available to all ranked companies free of charge.

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Holiday Forecast Bright for E-Retailers
Despite the recent rash of business failures in the e-retailing sector, e-retailers have reason to be hopeful for the upcoming holiday season. Recent surveys conducted by PricewaterhouseCoopers, the world's largest professional services organisation, indicate that this year's holiday online shopping activity will surpass that of the 1999 season and that online retailers have been able to convert early online holiday browsers into buyers.

PricewaterhouseCoopers predicts fourth quarter e-commerce sales will reach $10.2 billion this year, up nearly 100 percent from $5.2 billion in 1999. In fact, over three-fourths of Internet users plan to shop online for holiday gifts, a significant increase over last year. "What is most encouraging for e-retailers is that a large percentage of these holiday shoppers expect to make a purchase online," states Mary Brett Whitfield, Columbus-based Director of the PricewaterhouseCoopers E-Retail Intelligence System

Among Internet users who plan to shop online for holiday gifts, 85 percent plan to make online purchases, up from the 67 percent that did so in 1999. And, over 40 percent of these online shoppers anticipate spending more this year than last.

Early November online shopping results indicate Internet users have put these plans into action. In fact, over half of all Internet users had indeed started their holiday gift shopping. Among those who have started shopping for the holidays, nearly eight out of ten have made holiday gift purchases. Among these purchasers, 45 percent - or about 20 percent of all Internet users - have made a gift purchase online.

Even though most of Internet users' holiday shopping and purchasing activity so far has taken place at stores, online retailers have been able to convert early holiday online shoppers into buyers. On average, online holiday shoppers have done 27 percent of their shopping online and 25 percent of their purchasing online - almost a one-to-one ratio. In comparison, they have done 24 percent of their shopping via catalogs, but have made only 15 percent of their purchases from catalogs.

For the momentum to continue, e-retailers must deliver. "Online shoppers will be looking for lower prices than they can find in stores, easy transaction processes and on-time deliveries, Whitfield states. "The next few weeks will reveal whether or not online retailers have done their holiday homework and are up to the task."