May 2000

BY TRACEY ROTH, MANAGING EDITOR

A report issued in April by Forrester Research began by ominously stating, "The combination of weak financials, increasing competitive pressures and investor flight will drive most of today's Dot Com retailers out of business by 2001." Recent activities in the high-tech-oriented NASDAQ seem to provide support for this rather gloom-and-doom prediction. Operating under such a prophecy, what's an e-retailer to do?

David Cooperstein, research director of online retail at Forrester Research, has a strong theory regarding the difference between good online companies and bad ones. "The difference lies in whether they are 'built to last' or 'built to flip,' meaning built to go public and make the founders and selected employees instant millionaires. The ones set up to last typically have senior management with 10 or more years of industry experience, a large database of well-profiled customers and an ability to make fast, but smart, decisions as the landscape evolves." In other words, thinking about little more than what kind of boat you'll buy after your company's IPO will endanger the health of your business and the satisfaction of your customers.

From a consumer point of view, we are as different from the consumers of the 1950s and 60s as we are intellectually from our knuckle-dragging ancestors. Customer loyalty used to be a simple, solid concept. Our grandmothers would never have considered buying slipcovers from anyone but their favorite department stores. (I know in my grandmother's neighborhood, lifelong feuds were begun over which was the best store for spring drapes.) If they got a good price and personal service, they were hooked for life, and Sears or Macy's knew they had another loyal customer.

Enter the Internet and the e-commerce environment. Modern e-shoppers want the best price, maximum convenience and minimum hassle, and they are willing to shop anywhere that will provide these features to them. I don't like your shipping options? I'm off your site so fast you'll barely know I was there. Your agent is rude to me or you don't answer my e-mail? Too bad for you...some other company has nice agents and answered my e-mail in an hour. If you're selling an item that has little or no product differentiation from those being sold by your competitors (books, computer hardware and software and CDs, for example), you can be the best or you can go out of business.

So what are customers looking for? Convenient, fast, hassle-free purchasing. In times past, consumers had more free time and less financial resources. The situation is largely reversed today...free time is a precious commodity and financial resources, particularly for the demographic type of people who indulge in Web shopping, are more plentiful.

Who is doing a good job of adding the type of touches that consumers look for in a Web site? Some of them you may already know.

Prompt e-mail responses.
Staples.com, which sells the same variety of office supply items off its Web sites as it does in its brick-and-mortar stores, is an excellent example of a company that has its e-mail dog-and-pony show organized. An e-mail query to the Staples.com site will almost immediately produce an automated response informing you that your e-mail has been received, and a personalized response will follow quickly, usually the same day. Best of all, you can target e-mail to the department best qualified to answer your question. There are separate e-mail addresses for exchanging items, returning items, addressing missing items in a shipment or querying an order that seems to have gone astray. There are also separate addresses to send e-mail regarding refund status, order history, price matching, coupon questions, rebate information, tax information or charge account status. (They even have a separate e-mail address for members of the press who have article deadlines creeping up and would like to discuss their customer service policies with them!)

Superior shipping choices.
As mentioned before, e-shoppers are looking for convenience. If you frustrate them at every turn in terms of getting their products to them, they might as well hop into the car at lunchtime and visit a brick-and-mortar establishment. Customers want choices, reputable shipping companies that won't route their products via Madagascar, reasonable shipping charges and prompt, secure delivery. L.L. Bean has always been reputed to lead the pack in terms of customer satisfaction with shipping, though I recently noticed that they do not ship overnight for orders taken online. A big raspberry to them...why not? I don't expect to order a canoe online and have it delivered the next day via Federal Express, but there's no reason they can't do this with a sweater. Additionally, L.L. Bean, along with many other companies, bases its shipping charges on the price of the item, which seems silly. If I order a tiny but expensive pocketknife, why should I be charged more in terms of shipping than my neighbor who orders 19 pairs of cheap socks that come in a package 10 times larger?

So who does one of the best jobs in town on shipping? Amazon.com gets a blue ribbon for that. Shipping options can be personalized depending on the customer's needs. I can choose to receive my shipment all at once, or in separate shipments if items are back-ordered. I can track my shipment off the Amazon Web site to let me know when it was sent and when I am likely to receive it. I can even combine a new order and an existing order to save on shipping costs. I can see detailed information on international shipping...some companies assume their entire customer base lives in the U.S., as evidenced by mailing address forms that only allow the shopper to enter a U.S. Zip code. Best of all, Amazon.com offers a flat shipping fee ($3 for domestic standard delivery for books) on shipments that do not exceed 150 pounds.

A good returns policy.
Ever wish you could return something you bought off the Internet to the brick-and-mortar store without getting a blank look from the sales clerks? The Gap's Web site, www.gap.com, allows you to do so if you so choose. Any clothing retailer worth its salt needs a good return policy in place. Different manufacturers seem to use different sizing, and clothing can be a tricky thing to buy sight unseen. Perfect as you think your products may be, a fixed percentage of your customers are always going to want to return products, and without a good scheme in place to accomplish this painlessly, you will waste your own time and your customers' time and ensure your shoppers will never again return to your site.

A human touch.
Many of the Web sites we browse daily might have been put together by robots. Consumers often complain that e-commerce takes the human element out of transactions, and though they like to buy online, they find it impersonal and have little confidence they will be able to contact a living, breathing person when they have questions. Women's sports apparel company lucy.com (www.lucy.com) gets a nod for having a more human touch than most existing e-commerce sites. The founders, who frankly admit they had zero experience at the outset in running a Web-based retail company, decided to target a relatively narrow part of the women's clothing market and concentrate on doing it well. David Cooperstein of Forrester Research cites lucy.com as one of the smarter firms on the Web, in that they've "taken on a niche market rather than be all things to all people." Browsing is intuitive, the graphics and photos are attractive and informative without taking an eternity to load, and at each juncture of the shopping experience, there are icons nearby reminding the shopper that sizing information is available at the click of a button, customer service can be requested via e-mail and additional suggestions are available for coordinating outfits.

Keeping up with technology.
Even beyond the availability of a customer service e-mail address or toll-free number, we can regularly see e-commerce companies cropping up to follow in Land's End's footsteps by implementing live customer service chat, collaborative or shared browsing and even voice over Internet protocol (VoIP) technology to connect customers even more effectively to a company's agents.

The Best Service And The Broadest Range Of Information
So is there a mantra for e-commerce success? "The best service and the broadest range of information to the widest range of customers," said Jim Hilt, manager of sales management operations for IBM.com.

IBM launched its Web site in 1994. At that time, as with most companies, it was merely an information vehicle. Over the next two years, the company evolved the site to become more interactive, until IBM.com launched ShopIBM, a site on which customers could purchase computers and peripherals online and directly from the company.

Hilt stated that the ShopIBM.com concept was a natural progression, as the company already had a robust telesales force in place. Challenges existed in accomplishing the marriage of related components into the site, particularly across a company as enormous as IBM (ShopIBM.com alone receives about 3.5 million hits a month). The goal of the implementation was to provide the best sales and support possible, integrate across all channels and offer new channels to put customers in touch with trained reps as painlessly as possible. The company is currently piloting a text chat function to some segments of its market and is offering a "call me" function across some pages of its site and in its "Small Business Center."

The Marriage Of Service With Knowledge
Wedding resource site The Knot, launched in 1996 by four New York University film school students, aims at meeting the needs of and providing advice to those intrepid individuals about to marry. The site is extraordinarily complete and includes a broad selection of products for direct purchase (from salad bowls to honeymoons), a gift registry (the company says it has over a million brides and grooms as members and they sign up 2,400 new couples per day), editorial, an advice column which includes the much sought-after "mother-in-law" advice, beauty and clothing tips and tools such as checklists and a budgeter.

When asked what makes the site so successful, David Liu, CEO of The Knot, replies simply, "The Knot is 100 percent focused on serving our audience." Perhaps most other e-commerce companies would say the same thing to a member of the press, but in this case, it seems to be true. I did not speak with the Webmaster of the company, but hats off to him or her, because the site is a dream to navigate and seems to offer more wedding-related advice and information in one place than an entire year of the average bridal magazine. The company claims success due to its extensive local resources (matching members with providers in their own area, for example), personalized features that allow couples to create their own "wedding notebook" page on the site, interactive tools to help with the planning and budgeting process and 45 weekly hosted chats.

The Knot attributes its recent strong growth primarily to word-of-mouth and frankly admits it does not bother with television and radio ads it believes would not effectively reach its audience. For this market, it seems to work very well. Says Liu, "Traffic has grown so rapidly that we had to add more servers to handle the volume. We also had to expand e-commerce operations and improve our backend capabilities by adding more warehouse space." That merits champagne and cake.

"We're Trying To Make Things Easier For The Customer."
Sounds like a principle every "dot com" vendor has in place, doesn't it? Yet, experience tells most of us that that is not the case. Confusing Web sites, sub-standard shipping and returns options, unanswered e-mail, no search functions and poor product selection is still rife among companies that offer products in the e-commerce arena.

Making things easier for the customer is the philosophy, however, of Crutchfield.com, the Web sales arm of Crutchfield Electronics, a formerly catalog-only seller of home theater and car stereo products. The Web site, a natural extension of the company's catalog sales, is a fully integrated component of the company. (Forrester analyst David Cooperstein pointed out that some of the less-successful e-commerce companies are those that have attempted to keep their online sales separate from the main body of the company for sales tax reasons...insert Barnes and Noble.com as a prime example of this trouble-inducing pratice.)

Crutchfield.com launched in 1995 to field catalog requests and began selling off the site the following year. The site now receives approximately 100,000 hits per day. Alan Rimm-Kaufman, vice president of marketing for the company, noted that Crutchfield's vendors, pleased with the way the company had handled their products via catalog sales, offered encouragement for the company to begin Web-based sales.

When asked what gives Crutchfield.com a leg up on competitors' sites, Mr. Rimm-Kaufman cited two elements: customer service and information. In terms of customer service, Crutchfield prides itself on both pre-sales and post-sales. The site is staffed by experts in the fields of home theater and car stereos, and a visitor to the site can quickly receive in-depth information including recommendations and installation tips. An automated feature on the site is the "What Fits My Car?," which allows a user to enter the make, model and year of his or her car to find out which stereo components would fit and which would require panel modifications. Personal attention can be requested via e-mail or a toll-free call. Rimm-Kaufman reported that a number of toll-free calls received by Crutchfield come from a cell phone inside or even under a car, from customers in mid-installation who are looking for help, advice or tips from Crutchfield agents.

Crutchfield also seems to recognize that customer service can only be as good as the agents who are providing it. The company prides itself on the knowledge of its agents, who it says are all not only product experts, but are extensively trained to be computer-savvy, interested in working in conjunction with the company's Web site and in possession of both written and verbal communications skills. The company runs a training department for agents, who receive six weeks of solid training both internally and from vendors, who offer training to Crutchfield agents on the specifics of their products.

Beyond vendor-supplied information, Rimm-Kaufman says the company goes several steps further to independently verify information about the products they sell. "We have a feature called 'What's In The Box?,' which means we independently check on the features of each product to make sure we're providing the correct information."

Finally, Mr. Rimm-Kaufman stated that the company has a policy in place to make sure e-mail requests are answered within a few hours. Why did they get chosen as an example of e-commerce success for this article? Because they answered this editor's request for an interview within...any guesses?...a few hours.

And they, like the other examples of shining e-commerce successes mentioned above, don't need William Shatner hawking their services via bad pop-song covers to enjoy success. Now that's customer service.

The author can be contacted at troth@tmcnet.com.