Study: E-tailers Missing Holiday Mark

Although many e-tailers are frantically ramping up their offerings and services for the holiday season, 42 percent of consumers will not purchase gifts online within the coming weeks, according to a new survey by PlanetFeedback.com and BBBOnline, the Internet arm of the Better Business Bureau (BBB).

While many e-tailers would be more than satisfied with having access to 58 percent of the buying public, the data also shows that only 16 percent of those who purchased goods on the Web over the past year will definitely buy online again this year. Even among frequent e-shoppers who had purchased online four or more times in the past year, only one-third said they plan to do so for the holidays.

Instead, many of those surveyed said they will be taking their business to brick-and-mortar mass merchandisers, department stores, specialty boutiques and mail order catalogs.

Privacy Concerns Linger

Consumers' worries over online privacy issues continue to pose a major obstacle for e-tailers looking to generate widespread consumer acceptance. Over half of those customers surveyed said they were troubled that their personal financial information may not be secure throughout an Internet transaction.

At the same time, the survey found that Web merchants can take steps to ease these concerns. For instance, more than 40 percent of respondents said the display of a security trust mark or certifying seal was an important consideration when shopping online.

Beefing Up Service

According to the BBBOnline, which works in conjunction with 145 BBBs in the United States and Canada, e-tailers that do not provide a satisfactory experience run the risk of alienating shoppers. Nearly half of the Net shoppers surveyed noted that good customer service contributes to their decision to make online purchases.

A customer who has a positive experience can propel the growth of an e-commerce site's customer base. Almost 80 percent of respondents said they rely on the advice and recommendations of family and friends who have already made purchases from a particular online marketer.

The study also cited measures that e-tailers can take in order to boost consumer confidence, including implementing real-time inventory features, ensuring that mistaken items are not delivered, and providing for rapid fulfillment of orders. Other policies that reassure customers are repairing server outages and other problems quickly, and displaying security and privacy policies.

Seeing Slowdowns

A recent study from Nielsen//NetRatings bolsters these findings, as researchers concluded that key e-tailers saw only modest growth in traffic from the last week in October through the first full week in November.

NetRatings attributed the lackluster start to several possible factors, including the recent closing of several high-profile pure plays and a decline in dot-com advertising on television and radio.

Another study, however, reinforced the findings by the BBB and PlanetFeedback.com that a key to e-commerce success was turning online shoppers into repeat customers. According to Deloitte & Touche and the National Retail Federation, 91 percent of those who made an online purchase in the past year plan to conduct e-commerce transactions this holiday season.