E-Tailers Missing Big Sales

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Online businesses worldwide are missing out on $6.1 billion in sales due to online users' abandoned purchase attempts, according to a study by management consulting firm A.T. Kearney, Chicago.


Four of every five abandoned online purchase attempts are not completed, according to the study. The reasons cited were invasive information requests, 52 percent; reluctance to enter credit card details, 46 percent; Web site malfunction, 42 percent; and failure to find the product, 40 percent. These abandoned attempts account for $3.4 billion in missed revenues in the six countries surveyed.


A third of consumers' online purchases are also not pure online transactions: Shoppers usually need to resort to a phone call to complete a purchase.


"Most consumers take a dim view of this, and 60 percent claim they get so frustrated, they would not return to a site after such an experience," the report said.


"E-tailers must develop an effective, multichannel marketing strategy," said Joe Dickinson, vice president at A.T. Kearney. Many have simply set up a Web site and have skimped on front-end design and application investment, "which leads to significant lost revenue and downstream costs," he said.


Steven Leonard, co-leader of A.T. Kearney's EDS e-services team, said, "Companies that minimize their investment risk to 'see how things go' will soon run into problems."


A.T. Kearney, which surveyed 1,264 experienced Net users in the United Kingdom, United States, Japan, Sweden, Germany and France, also attributed the sales loss to lack of Internet access via television, mobile phones and other digital equipment.


Online consumers would spend an extra 21 percent if alternative online channels were available, which would provide a $2 billion revenue boost to the online retailers in the countries surveyed, according to the report.


"Demand for access via TV, mobile, games consoles and [personal digital assistants] is huge," said Kate Rizzuti, A.T. Kearney manager. "Companies selling online need to seriously consider multiple access points when launching, upgrading and evolving their sites."


Forty-one percent of those surveyed said they want to shop through their TVs. About the same percentage would like to shop via their mobile phones. Twenty-eight percent want to shop through PDAs.


Malfunctioning Web sites appear to be the biggest problem in Germany: Sixty-seven percent of German respondents had to resort to phone calls. Only 20 percent of Japanese and Swedish users had the same problem.


The survey also found that online shoppers are brand loyal. Most have settled for a few "comfort" sites, rather than shopping around. Although 40 percent have bought once from five to 10 sites, 61 percent repeat-buy at only one or two sites. Sixty-nine percent said re-entering their personal information is a barrier to switching sites.


"It's not surprising that, providing the e-tailer meets their needs, customers will stick with them," said Joe Dickinson, A.T. Kearney vice president.


As is apparent during this year's online holiday shopping, many of those surveyed said they stick with companies with an offline presence rather than pure plays. Sixty-four percent said this is because they want to touch and feel products, and 58 percent said they feel more secure with clicks-and-mortar companies.


Companies with a clicks-and-mortar presence can reach a broader audience, the report said. Barnes & Noble, for example, allows customers who purchase books and CDs over the Web to return them to local stores.


Thirty percent of online shoppers are willing to buy any type of product over the Internet. Primarily males in their late 30s and with considerable Internet experience, this group spends an average of 10 percent more than others.


U.S. and German shoppers spend the most online, while the French are the most conservative spenders
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