'Tis the season to build long-term loyalty online

When Santa Claus asked the dot-com world last year for help in delivering the more than $US5 billion in holiday goods purchased online, a lot of big industry players forced him to deliver thousands of IOUs instead of gifts.

          When Santa Claus asked the dot-com world last year for help in delivering the more than $US5 billion in holiday goods purchased online, a lot of big industry players forced him to deliver thousands of IOUs instead of gifts.

          Online retailers have had a year to fix those fulfillment problems in time for what’s expected to be the biggest holiday season yet for web sales — as much as $US19 billion, according to a recent forecast by Gartner Group. But that’s not the only thing on web retailers’ to-do lists: Those that fail to focus on customer satisfaction and loyalty this year won’t have next year to worry about, say both analysts and users.

          "Last year, it was about handling capacity," says Kevin Tate, vice president of business development at Fort Point Partners, a business strategy consultancy in San Francisco. "This year, we’re going to see if sites turned the customers who shopped into long-term, loyal customers."

          Mike Wagner, chief operating officer at Denver-based KBkids.com, is taking that forecast seriously.

          "If a customer does not have a good fulfillment experience, they will not be back," says Wagner.

          Fulfillment means more than just shipping on time. It refers to the whole online buying process, say experts, from finding products, getting online assistance and purchasing items to getting assurances from vendors that the products ordered come with a guarantee of on-time delivery.

          Aamir Rehman, senior analyst at e-commerce consulting firm Creative Good in New York, recently ran a user study that critiqued eight of the web’s most popular retail sites — Amazon.com, Barnesandnoble.com, Buy.com, Landsend.com, Gap.com, BestBuy.com, eToys.com and KBkids.com — and found that 43% of all online purchasing attempts fail.

          Participants in the study says they often became frustrated by confusing account registration requirements, vague error messages that offered little or no help on how to proceed and an inability to order more than one item.

          "It was as if these customers made it to the cash register, but the store would not let them pay," says Rehman.

          Despite the recent flap about its pricing and privacy policies, Amazon.com did relatively well on Rehman’s study.

          "We take holidays very seriously," says Amazon spokeswoman Kristin Schaefer, adding that this will be the first year that all of Amazon’s eight regional distribution centers will be in operation.

          One of the major pitfalls for many companies online, however, is that they try to be everything to every customer, says Tate. Sites should figure out which customers they want business from and go after them, he says.

          If they don’t, he adds, "the result is that they end up being nobody’s first choice."

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