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August 21, 2008
Report: Retailers Transitioning Well to Online Format
By Jyothi Shanbhag, TMCnet Contributor
According to a new RSR Research report, retailers are not taking much initiative to improve online shopping experiences for consumers. Rather they are simply waiting for consumers to initiate feedback, and most customers are happy with their experiences.
In the past, e-commerce sites were designed to replicate the store experience, but today's retailers are struggling to bring elements of the rich online experience into their stores. In fact, for the first time ever, consumer satisfaction with online retailers in the U.S. has surpassed store-based retailers — with little signs of slowing, RSR Research said.
Retailers are ready to invest in foundational capabilities like product information and availability, and are taking a cautious approach to next generation e-commerce technologies like Web 2.0 and mobile.
Retailers have no option but to join a revolution that will cut costs and increase variety (which largely vanished in retailing's previous upheavals). Many retailers will find this an uncomfortable transition. But they have run out of options, because their fundamental economics are under attack.
“Given that e-commerce is starting to have a better reputation for customer service than stores, we were surprised to see that the business challenges driving retailers' strategies today focus more on product-related issues,” said Steve Rowen, an analyst at RSR Research and one of the report's authors. “What's not surprising, however, is that online pure-play e-tailers are at the forefront of innovation in online shopping.”
RSR's report, “Playing Well with Others: eCommerce's Evolving Role in the Customer Experience,” sponsored by Gomez and Microsoft (News - Alert) Corp., also found that some multi-channel retailers are not focused on a multi-channel strategy, but instead are trying to emulate pure-plays in building a "stand-alone" online experience for consumers.
“It appears that the online market is diverging — online pure-plays are trying to differentiate themselves from multi-channel retailers by offering a larger product assortment and a differentiated customer experience in order to battle the cross-channel capabilities that they can't offer," said Nikki Baird, RSR research analyst and co-author of the report.
Baird continued: “Some multi-channel retailers have recognized that cross-channel offers a real opportunity to provide a high-quality customer experience, but others appear to be blindly copying e-tailer pure-plays in an effort to boost their online presence. It's a real disadvantage, if you're primarily a store-based retailer, to ignore the advantages that cross-channel can give you.”
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Jyothi Shanbhag is a contributing editor for TMCnet. To read more of Jyothi's articles, please visit her columnist page.
Edited by Mae Kowalke
