During the late 2007 holiday season in both the US and the UK,
the internet again proved to be a marketing platform merchants
cannot afford to ignore.
In the US, amidst disappointing overall retail sales, online retail
sales during the 1 November to 27 December season reached $28
billion, a solid 19 percent increase compared with the same period
in 2007 according to online data analysis firm comScore. In the UK
online retailers enjoyed even more robust sales, estimated by the
Association for Payment Clearing Services to reach £5.6 billion
($10.9 billion) during December, an increase of almost 56 percent
compared with a year earlier.
But despite all its attractions, merchants in both countries who
approach online retailing with a complaisant level of customer
service do so at their peril. This is made abundantly clear by
surveys of consumers in the US and UK conducted on behalf of online
customer solutions provider Tealeaf by market research firm Harris
Interactive in late 2007.
In the US the survey revealed that for the third consecutive year,
about nine out of 10 consumers conducting transactions online
experienced problems. The actual levels were 87 percent in 2007, 88
percent in 2006 and 89 percent in 2005.
Consequences for retailers can be dire, as the latest survey again
highlighted. Of customers who experienced problems, 42 percent have
switched to a competitor or abandoned the transaction entirely.
This is up from 40 percent in 2006.
The US survey also revealed that failed transactions have a big
impact on those consumers who do not immediately switch, but rather
try to resolve problems via company contact centers. According to
the survey 53 percent of online shoppers with issues would contact
customer service and of those almost half (49 percent) did not have
their issue resolved. A lack of knowledge by the service agent was
cited as by far the biggest factor in their failure to resolve
Notably, 52 percent of customers who experienced bad service from a
company’s contact centre following an online issue completely
stopped doing business with the company while 76 percent either
stopped doing business entirely, decreased the amount of business
they do, or lodged a complaint with the Better Business
The findings of the UK survey were uncannily similar to those of
its US counterpart and underscored the importance of sound customer
Of UK customers who had conducted transactions online during the
previous 12 months, 86 percent had experience problems completing
transactions. Exhibiting a similar unforgiving attitude towards
poor service, 37 percent of those who experienced problems said
that they abandoned the transaction.
As in the US, inefficient customer contact centers can do further
damage. According to the survey 43 percent of UK adults who
experience transaction problems contact customer service centres
and yet only 47 percent of these felt that this resolved their
issue. Ultimately, 40 percent of UK consumers who experienced
bad customer service from a company’s contact centre following an
online issue stopped doing business with the company
Commenting on the findings of the surveys, Tealeaf’s CEO Rebecca
Ward said: “We’re in a perfect storm as users’ dependency on
e-commerce grows and their patience for bad online experiences
wears thin. Companies doing business online must pay attention to
their customers’ experiences and help them to succeed, or risk
losing them entirely.”