But it’s not just the changing habits of consumers that need to be taken into consideration — it’s the consumers themselves who are changing. As generations X, Y and whatever comes after them (generation Z? And where do we go after that — to the Greek alphabet?) matures and starts pulling in significant disposable income, how will companies seeking to service them have to adapt?

And why stop at young adults?

According to a study from eMarketer, children between the ages of 8 and 14 — so-called “tweens” and young teens — are themselves a powerful demographic group online. They control billions in purchasing power and make up 60 percent of Internet users under age 18, according to the market researcher. Granted, it’s allowance money, lawn-mowing money and babysitting earnings, but it’s still significant, and its owners are eager to spend it.
Keep in mind, these are consumers who will have grown up interacting heavily with Web 2.0 technologies such as social networking, wikis, blogs, podcasting and social bookmarking. Static Web pages, disconnected media channels and two-dimensional shopping experiences will not cut it with them.

“Good Enough” Is Not Good Enough

From an e-commerce perspective, it has become apparent that from year to year, what is “good enough” one holiday shopping season is laughably sub-par the next holiday season. Between rising expectations of customer service and technology, particularly among the aforementioned younger consumers, and more determination to get their money’s worth out of a shopping experience, customers are quick to learn about what they don’t like, what didn’t work for them and what’s missing from their shopping experience and are likely to drop that retailer like a proverbial hot potato forevermore. Loyalty to a particular company, particularly in the online arena, has gone the way of the Fuller Brush Man. (To prove it, ask the average 20-year-old what he or she knows about the Fuller Brush Man.)

Research Probes The Online Customer Experience

In its third annual “Holiday Shopping: Online Customer Experience Survey,” research organization the e-tailing
group, together with e-commerce company Allurent, sought to better understand consumer online shopping behavior and attitudes towards online retailers. They also touched on how expectations are evolving.

The 2007 survey revealed that, while consumers might be buying more online, their expectations, from a shopping and customer service perspective, are also sharply on the rise. More than two-thirds of consumers affirmed that their expectations about the quality of their online shopping experience have increased since the 2006 holiday shopping season.

There were a couple of primary factors driving this assertion:

 Sixty-six percent of customers indicated that they understand that technology is constantly changing and improving and they expect that, accordingly, online shopping should also be getting better.
 Forty-six percent agreed that retailers that consistently advertise their Web sites should be investing in making those sites better than they were the previous year.
 Forty-one percent indicated that, since they have high-speed bandwidth, they expect to see more online stores better presenting products in a way that takes advantage of faster Internet connections.
 Twenty-nine percent identified themselves as familiar with interactive and visual sites, like Google Maps or social networking site Facebook, and stated that they expect to see more online stores being innovative in the same manner as these sites.
 Young consumers’ expectations are more influenced by Web 2.0-enabled sites, like Google Maps and Facebook. Nearly half of 18-to-24-year-olds cited these interactive Web experiences as the reason their expectations are rising. Successful e-tailers will need to learn how to better target this young group of consumers as they attain professional jobs and households and, as a result, their purchasing power, which is already significant, becomes more influential.

Consistent with the results of Allurent and the e-tailing group’s two previous holiday surveys, the results proved that consumers do not differentiate between channels. In fact, nearly 40 percent of consumers revealed that a frustrating online experience would make them less likely to shop at that retailer’s physical store. Sixty percent reported that when they have a frustrating shopping experience online, it negatively impacts their overall opinion of the retailer/brand. An overwhelming 80 percent would not return to the site after having a negative online shopping experience, meaning with most customers, retailers really do have only one chance to make a great first impression, to borrow an old dandruff commercial’s schtick.

When asked to rate customer service features that are most important to them when buying online, nearly three-quarters of today’s e-commerce consumers rated a perpetual shopping cart as an important feature, and 70 percent rated one-page checkout as an important feature, rather than having to click through multiple checkout pages. These two features were rated above other options such as access to a toll-free telephone number, available live help and accessible contact information. When results were segmented by gender, more women than men found customer service features to be of high importance.
More than half of consumers surveyed expressed interest in virtual catalogs and circulars that can be downloaded directly to their desktops, so retailers could update information on new merchandise and special offers.

We’ll Get Back To You.

We Value Your Business. No, Really Features like the ability to “co-shop” with another person virtually rate highly, as does the ability to get instant results from queries via self-service. In other words, if a shopper queries a bookstore’s Web site to find if a certain book is in stock, an e-mail auto-reply stating that “someone will get back to you in three to five business days, thank you for your query, we value your business” is, today, the equivalent of telling the customer, “Natter off, please. We’re far too busy to worry about your stupid question.” That Web site had better allow the customer to check the real-time stock status of a book…on the spot. To take it a step further, a “2.0” Web surfer will expect to be able to view the cover of the book. Read reviews. Listen to snippets of the audio book. Read part of the first chapter. Buy the e-book on the spot. See the ratings of other customers and share the ratings with friends. View other books written by the author. Click on a video of a recent interview with the author. Browse the author’s blog. Download a coupon to use for purchase of the book. Visit and post to a discussion board about the book.

The Financial Implications

Since consumers this year reported that they purchased more holiday gifts online this year than they have in the past, and based on their online shopping experience this year, more than three-quarters plan to shop online more during the 2008 holiday season, the health of retailers’ e-commerce experiences is doubly critical. Rising expectations plus rising online sales means that retailers must grow their online shopping experiences exponentially — a 10 percent improvement in usability is an acknowledgement of defeat.

So are you up to the job of making sure your younger, and increasingly powerful, online shoppers are satisfied with your service? If you’re not, and if you’ve just discovered that the youngest person in your marketing department is 37, I suggest you consider forming a few focus groups with teenagers and 20-something shoppers. And don’t skimp on the healthful snacks: your most profitable customers may still be growing. CiS