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E-commerce: online shops are not in shape for the run-up to Christmas
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The majority of purchase processes are abandoned due to technical problems
Approximately 2.1 billion Euros in lost turnover were recorded in the first half of 2004
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Hamburg, Germany, 27th October, 2004 –
Approximately 25 percent of an online shop’s annual turnover is generated in the run-up to Christmas. However, many shoppers are struggling to make their seasonal purchases online: 40 percent of internet customers have been forced to abandon an online shopping spree due to technical difficulties. Projected figures from research carried out by novomind AG indicate that internet retailers suffered approximately 2.1 billion Euros in lost turnover in the first half of 2004 alone. Technical problems aside, one in three online shoppers abandons his or her shopping basket due to a lack of available information. Further reasons that lead users to abandon an online transaction: excessive shipping costs (32 percent) and complex order processes (30 percent). These are the results generated by the market research study "Customer Concerns: Online Shopping" carried out by novomind AG and the F.A.Z-Institut.
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During the first half of 2004 alone, internet retailers saw a loss of around 40 percent in potential turnover, according to an estimate carried out by novomind AG. The problem: if the order process fails to meet user expectations, frustrated customers will abandon the purchase, switch to an online competitor or buy the items offline. Shop providers are throwing away potential business, especially during the Christmas season which can generate up to a quarter of an online shop’s annual turnover. Why? Web shops are not in shape to deal with Christmas trade. As well as technical problems – ranging from slow page displays to meaningless error messages – complex, hard-to-navigate shops are deterring potential gift shoppers. In the past, one in three online shoppers has abandoned an internet shopping trip because he/she was unable to find the information he/she required. But even when the customer has filled his/her online shopping basket, internet retailers do little to make life easier. More than one in five customers leaves the website before completing a purchase simply because he/she could not locate the shopping basket or check out desk. An even if the customer does make it to check out, other obstacles can prevent a successful purchase: a quarter of internet shoppers abandoned their baskets at check out when they discovered that the retailer did not accept bank transfer or direct debit payments.
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Turnover lost due to poor technology
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Despite the problems that customers are having when shopping online, the number of online shoppers is constantly on the rise. Whereas the first half of 2003 saw a turnover of 3.8 billion Euros, the first half of 2004 saw a sharp rise when turnover reached 5.3 billion Euros. As with high street retailers, prices are the key to a shop’s success. 93 percent of those who took part in the study saw price as the decisive factor when selecting a shop provider. In second place with 91 percent were the conditions of delivery offered by the online shop. Just as customer satisfaction is vital for guaranteeing success in the high street, it can influence shopper’s behavior online: 86 percent take their previous experience shopping at the online store into account. The shop’s reputation and image are considered decisive criteria by just 64 percent of participating online shoppers.
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It´s not just business criteria that influence a customer’s choice of online shop; technical factors also play a decisive role. 57 percent of those participating would like to see the implementation of virtual agents, e.g. to provide additional information about the products on offer and answer their questions. And how are virtual retailers reacting to their customer´s needs? novomind´s current study "Customer Communication Trends" shows that, in future, one in two companies is aiming to offer virtual assistants online. But shoppers are looking for more: over half would like to store potential purchases for longer in their online shopping baskets. And even though the festive season is underway, only 19 percent see personalized wish lists – lists that shoppers can send to friends and family directly from the shop site – as a factor that significantly influences their choice of shop.
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Price and conditions of delivery are the main factors influencing a customer’s choice of e-shop.
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The study "Customer Concerns: Online Shopping" was carried out in August of this year. 500 German-speaking internet users over the age of 14 were asked about their shopping preferences and online shop requirements. The selected participants represent a cross-section of German internet users who are online regularly for private or professional reasons. The questionnaire was carried out as a series of telephone interviews using Computer Aided Telephone Interviewing (CATI) techniques.
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novomind AG is the leading provider for digital customer communication solutions enabling optimized processes and lower costs. The product department’s portfolio includes e-mail management systems, as well as virtual customer services assistants and systems for interactive communication in real time. The novomind services department develops complex e-business applications, including scalable online shop solutions. novomind’s products and solutions focus on future-oriented service, efficient and personalized communication, and higher-performance administration. A rapid ROI is guaranteed and ongoing, long-term customer loyalty ensured. Leading companies from across the market sectors – including Bertelsmann Der Club, Otto, Sparkasse Erlangen, BKK Gesundheit, Travelocity and Hannoversche Leben, as well as public sector representatives such as the German Federal Ministry of Health and Social Security (BMGS) – have already successfully implemented novomind systems to boost customer loyalty, turnover and public relations.
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