EcommerceBytes-NewsFlash, Number 1399 - October 30, 2006     2 of 6

The State of Online Buying, Part 1: Clicks vs. Bricks

By Julia Wilkinson

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People have been getting used to buying online since the mid-1990s, and today it has become an integral part of how most folks shop. US online retail sales will grow to $328.6 billion in 2010, up from $172.4 billion in 2005, according to a Forrester research report. By 2010, predicts Forrester, there will be 55 million US online shopping households (http://www.forrester.com).

But there are certain types of things that people still look to those traditional offline venues to buy. And there seems to be plenty of room for improvement in the online experience: Seventy percent of consumers report satisfaction when completing transactions in stores, vs. just 26% for a Web shopping experience, according to Forrester. And that lack of satisfaction translates into weak conversion rates for online sellers: they post an average conversion rate of just 2.6%, according to Forrester.

AuctionBytes decided to investigate what makes people buy online, and what kinds of things push them away from online purchases or to abandon their virtual shopping cart. With this knowledge, online sellers can address the things that turn people off, in the hopes of turning up their sales volume.

Convenience
Convenience was a big buzzword in an informal survey of online shoppers. In today's busy world, buyers savor every moment saved.

"The single most important factor for me in online buying is convenience," said Rosanne, a PR specialist. "I started buying online seriously in 2001 when I had my mother (who had Alzheimer's) living with me. I was working full time plus, and my husband and I also have a grandson (then 6), who we have raised from birth. I had no time at all to shop for anything besides groceries, so I decided to do my Christmas shopping online."

Rosanne says that although in some cases, she probably paid more than she would have at a store, she "simply couldn't afford the time to save the money."

And it isn't just the convenience of no driving that's appealing to consumers. Rosanne notes that many sites have free shipping – particularly at the holidays, as well as sales – and ship directly to the recipient, so wrapping, packing and posting packages isn't required. "This was a big deal, as many of my gifts go to different states," she said. It was so successful for her, she has continued to do some portion of holiday shopping online to "save time and to get what I want without having to look in several stores." Jean, a writer based in "the butt-end of nowhere, in the Phoenix suburbs," says she buys a lot online because she doesn't drive, and she might have to drive an hour to get some things in a retail store.

One eBay buyer and seller says she buys online "mostly for convenience and saving money," as the nearest mall is about a two-hour drive, "so by the time I fill up the tank in the SUV and set out, I am spending more." She also says she can buy a wide variety of stuff online without leaving the house, and generally likes buying from "the same places all the time online 'cause I don't have to give out my info again." She usually doesn't buy electronic items online though, because she likes to be able to return them to a store if they're defective. She buys "general household items" from the nearest Wal-Mart, 20 minutes away.

A couple of other eBayers mentioned the bonus of being able to "shop in their jammies," avoid long lines and dressing room crowds, and access the Internet 24/7.

Finding the Hard-to-Find: Selection
Several people said the wider selection of items was what drew them to shopping online. "From a research perspective, physical bookstores are pathetic-they rarely have the books I want," said Bill Neugent, author of "No Outward Sign" and other books. "The last book I bought was The Art of Preaching by Charles Reynolds Brown, published in 1920 - a brilliant book, which would have been lost forever except for online booksellers. I found it in a minute and bought a used version for $3."

He said a side benefit of buying a used book was that a previous owner of the book had apparently been studying to be a preacher, and "by his underlines and margin notes, I learned what he thought important and saw the powerful impact the book had on his thinking. Wow. This book is so good that, rather than plowing through it, I read it before bed just to savor how well it is written."

Neugent also likes the user recommendations and listings of other, similar books available on sites like Amazon.com: "Sometimes I'll be looking for one book, but buy a better one in its place, or sometimes a couple of additional books because of the information made available by online booksellers. Several times I've gone online to buy one book and ended up buying four or five," he said.

Elisabeth Higgins Null of Silver Spring, MD, says she can better find the plus-size garments she's looking for online vs. in real world clothing stores. "Even before I started buying online, I bought a lot from catalogues," she said. "Now that I have moved online, I find I still do most of my buying from the stores I used to order from by catalogues. Buying online does just as well once one knows what one's size is and what styles look best." As a plus-size shopper, she says the "lack of varied ready-to-wear items is especially true in my case."

Homeschooler Ann Cameron Siegal, who says she hates shopping in malls, looks to buy online especially when seeking something unique, such as a Colonial dress for her daughter's adventures, a collector's item, or an unusual gift - "simply because it keeps me from traipsing all over the place searching for what I want." She's had mostly good experiences, except for a recent textbook purchase on eBay which never arrived, and the seller went NARU (No Longer A Registered User).

Sometimes the Internet is the only place people can find that unique item they couldn't find in retail shops if they tried. "A couple of years ago, my husband wanted a laptop case on rollers with a side-pocket opening that he could use under his seat on the plane, and just slide the laptop in and out without taking the case from under the seat," says Rosanne. "Didn't sound too difficult, but I could not find one anywhere. I finally went online, located it, ordered it, and had it in 2 days," she said, adding, "I think online shopping gets easier all the time."

Comparison and Price Shopping
Several shoppers cite the ability to comparison-shop and get discounts as the key reasons they shop online. Amanda M. Socci, of Amanda's Charities, LLC, says she buys online whenever she can in order to participate in online programs such as mypoints.com. Purchases from sites (including eBay) earn points in the mypoints.com system. "Collect enough points and I get gift certificates for various things," she says.

Socci also belongs to upromise.com, earning points that will eventually go to fund a 529 fund for her daughter's education. She is also attracted to the "smallness" of the independent businessfolks who own small businesses like she does.

Bill Neugent's wife, Jill, says she likes the "ease of comparison shopping (i.e., finding the best product for the best price) online because it's easier, quicker, and I can do it from the comfort of home."

Bill Neugent is out to save money, too. "I bought a couple of books on Trial Advocacy that normally retail for $150 each. Online? $5 each for used versions. Again, with the added benefit of margin notes from prior owners."

When People Prefer Offline
So what kinds of things drive people to bricks-and-mortar stores?

Sometimes they just have to feel the product and kick the proverbial tires. Other times they want something right away. "Things I buy offline in retail stores are usually current books and records I especially want without waiting, clothes, furniture or other household items," says Barbara, who is a big country music fan. For example, the day the new Oak Ridge Boys album was released, she went to the store to buy it ("regardless of cost") because "they are my favorite recording artists and I don't want to wait even a few days to hear it." Also, she shops offline for "any other items that I need to judge the quality of when I have the object in hand."

Abandoning the Cart: Problems with Online Shopping
Higgins Nulls cites the process and costs of returning an item, the logistics of delivery, putting everything on a credit card, and security issues as what she doesn't like about online buying.

Jill, who says she's very aware of the security risks when buying online, checks the eBay Seller's information (rating, store location, etc.) and always uses PayPal. "On other "known" sites (like Amazon) she looks for the "lock symbol" and "https" in the URL."If I don't know the company, I'll call their 800 number and purchase by phone," she says.

Other things that may drive people into the arms of traditional stores are some of the hassles that can come with online buying. 88% of Web buyers have left a product in an online shopping cart without making a purchase, according to a Forrester Research report. It cites not wanting to pay shipping charges; that the total cost was more than shoppers expected; or that the shopper was just browsing or researching a purchase, or holding a purchase until later, as the key reasons people "orphan" products.

"What stops me from completing an online transaction are lengthy, seemingly unending steps to follow; unclear directions; and systems that don't let me enter my name or business name properly," says Freelance Writer/Editor Ruth Thaler-Carter.

Of course, we all know things can go wrong with technology. Browsers hang, error messages occur; things don't always work as they should. "These Web sites are often hard to use and the transaction blows up," complains Jean from Phoenix. And "I hate having to register with a skanky little password, etc., etc., the secret handshake, my pet's middle name, aieeeee."

Another thing that goes wrong for her is "stuff not going in the shopping basket. Or the promised discount (I respond well to those) is not applied. I have abandoned many times."

According to the Forrester report, Jean is not alone: "if a consumer finds that prices are too high in the cart, that consumer can easily check the price of a similar product at a competitor's Web site, leaving the original products in their online purgatory." (Forrester's advice to online retailers is to use email promotions to remind users of leftover items in the cart).

Clearly, a little thought and effort can go a long way for online sellers looking to improve their bottom line. Forrester Research stresses that online merchandisers need to focus on certain elements, including the following:

  • Usability: Key content is sometimes missing; text is illegible.
  • Customer Service: "Very few tools beyond FAQs" have gone mainstream. Things like "live chat, click-to-callback functionality, avatars to explain complex products, and dynamically generated knowledge bases" can be more effective than static FAQs.
  • Navigation: shoppers tend to use either on-site search or the site's navigation links: some ecommerce retailers "have yet to integrate functions as basic as on-site search at all."
  • Multichannel integration: e.g., helping customers find products featured in catalogs.

All of this can seem overwhelming, but putting even some thought into your sales presentations, and implementing small changes, can yield big improvements. You can then be part of the movement that shows people that clicks can be so much better than bricks.

Forrester Research Reports Cited in this Article

How To Master Online Merchandising
http://www.forrester.com/Research/Document/Excerpt/0,7211,38508,00.html

Rethinking The Significance Of Cart Abandonment
http://www.forrester.com/Research/Document/Excerpt/0,7211,37912,00.html

Topic Overview: US Online Retail
http://www.forrester.com/Research/Document/Excerpt/0,7211,38360,00.html

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*Julia Wilkinson is the author of "The eBay Price Guide," (No Starch Press, 2006 powered by Hammertap) and "eBay Top 100 Simplified Tips & Tricks" (Wiley, 2004-6); as well as "What $ells on eBay for What" (http://www.aolmemorabilia.com/whatsells.html). Her newsletter, Yard Salers and eBayers is at http://www.yardsalersebayers.com, and her blog "bidbits" is at http://blogs.gowholesale.com/julia_wilkinson.*


About the author:

Julia Wilkinson is the author of "The eBay Price Guide" (No Starch Press, 2006) and "eBay Top 100 Simplified Tips & Tricks" (Wiley, 2004-6). Her free "Yard Salers" newsletter is at available at YardSalers.net where you will also find her latest ebook, Flip It Again.


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