Gartner Group, Inc.'s latest survey shows that U.S. consumers spent $6.2 billion in online shopping for the 2000 holiday season. Yet online retailers lost out on $2.6 billion from consumers who bought holiday gifts last year and didn't return, possibly due to poor CRM and customer service.
"There were a lot of problems with fulfillment [in 1999]," said David Schehr, research director at Gartner. The study focused on consumer behavior, he said.
Just under half of 1999 buyers said that online retailers had inadequate customer service efforts, Schehr said, which totaled around 11 million shoppers. Retailers did not take the steps necessary to insure customers would return to their sites, he added.
"It's a space where CRM is important," Schehr said. "We all know the old expression," he said, that it costs less to retain customers than attract new ones. If there had been 100% customer retention, which Schehr acknowledged is difficult, online retailers could easily have pocketed that $2.6 billion.
"We had a lot of people try online buying in '99 [and they] didn't get the satisfaction they were looking for," Schehr said. Customer satisfaction became a critical issue for customers that bought online last year, he said.
"I found the magnitude surprising," Schehr said. He originally expected perhaps 25% of shoppers to be dissatisfied, but the high turn was definitely unexpected. "Consumers are all about satisfaction," he added.
"What companies need to do is follow up with their customers," Schehr said. This way, when the next shopping season begins, consumers will remember the companies that made them feel appreciated and will be willing to shop from them again, he said.
This year, approximately 75% of online shoppers were satisfied with their experience, and most should be back for the 2001 holiday shopping season. "But retailers can't rest on their laurels if they plan on growing their e-commerce activities," Schehr said. "At most, they have [less than 350] days to fortify their systems and get it right for the 2001 shopping season."
The overall number of Internet users did not grow that much and was around 30 million, according to Schehr. If companies retain their online customers from this year, they can expect an improvement in their sales of $2.5 billion to $3 billion, he said.
Gartner estimated before the holiday shopping season, in September 2000, that North American consumers would spend $10.72 billion online. Meanwhile, consumers with a year or more of online shopping experience were expected to spend $8.4 billion online, as predicted in November.
For more information, visit Gartner Group's Web site