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Table of Contents
Introduction
Methodology
Part 1: Recommendations for Holiday Success
Part 2: Trends for this year’s holiday shopping compared
with last year
Part 3: How the tragic events of September 11th have
affected holiday shopping plans
Part 4: Conclusions
INTRODUCTION
To help companies better prepare their Web sites for holiday shopping,
Vividence performs studies of consumer expectations and online shopping
behavior. This report covers the key insights from these studies and lists
Vividence recommendations for improving Web sites to better meet customer
needs.
METHODOLOGY
Empirical evidence presented in this paper is based on Vividence Web site
evaluations conducted using Vividence’s eXperience Management System (XMSä), a
technology platform for assessing online customer experience. The Vividence
methodology involves sending large samples of Vividence panelists (typically
200-800) to live Web sites. The Vividence browser technology records the
behavior of each panelist as he or she interacts with the Web site and
assesses panelist perceptions and reactions through qualitative comments and
follow-up questions.
Vividence conducted four large studies evaluating customer experiences and
expectations. Longitudinal analyses were performed on the three pre-Holiday
studies, conducted last year (2000) and both before and after the tragic
events of September 11th this year (2001). Panelists were recruited from the
150,000-person Vividence Research Panel, representing a cross-section of
Web-savvy online consumers.
Longitudinal holiday readiness studies
These studies asked people about their online holiday shopping habits,
expectations and attitudes and had users attempt specific online shopping
tasks at their preferred sites.
Study 1: October 2000, sample size =450
Study 2: September 1, 2001, sample size =500
Study 3: September 17, 2001, sample size =400
Shopping cart abandonment study
This study, conducted in August 2001 with 200 panelists, evaluated the use of
different kinds of online shopping carts to determine customer preferences.
PART 1: RECOMMENDATIONS FOR HOLIDAY SUCCESS
Vividence’s Holiday Readiness studies asked participants what factors most
influence their online purchasing. Shipping fees and product prices topped the
list. The most common influences on whether a consumer makes a purchase online
were as follows (with percentage of participants indicating each item in
parentheses).
Top 10 Holiday Purchase Influencers
1. Shipping fees (92%)
2. Prices (92%)
3. Product availability (86%)
4. Special promotions or incentives (76%)
5. Selection (69%)
6. Order tracking (66%)
7. Clearly identified delivery time (65%)
8. Return policy (63%)
9. Ease of use (62%)
10. Site performance/speed (51%)
Industry studies estimate that anywhere from 25 to 75 percent of Web consumers
abandon their shopping carts before making purchases online. The top reasons
for shopping cart abandonment, cited by those who had problems were as follows
(with percentage of participants in parentheses).
Top Reasons for Shopping Cart Abandonment
1. High shipping prices (72%)
2. Comparison shopping or browsing (61%)
3. Changed mind (56%)
4. Saving items for later purchase (51%)
5. Total cost of items is too high (43%)
6. Checkout process is too long (41%)
7. Checkout requires too much personal information (35%)
8. Site requires registration before purchase (34%)
9. Site is unstable or unreliable (31%)
10. Checkout process is confusing (27%)
Even when the shopping cart provides good customer experience, there are other
reasons people abandon shopping carts without purchasing. Vividence found that
customers often use shopping carts to gather additional information relevant
to their purchase decision or to store items for future purchase (with
percentage of participants in parentheses).
What else do customers use their cart for?
87% - To determine shipping charges
57% - Store items for future purchase
27% - To determine shipping/delivery times
Although people abandon shopping carts, people also report a variety of
benefits for saving items in their shopping cart (with percentage of
participants in parentheses).
Top reasons customers save items in their cart:
1. To remember items for future purchase Wish List (45%)
2. Combine items to lower shipping costs (17%)
3. Interrupted while shopping (10%)
4. Waiting to get money (10%)
5. Waiting for coupon or gift certificate (9%)
Retailers should concentrate on these key influencers in order to drive
customers to purchase. Based on these drivers as well as other problems
uncovered in Vividence studies, Vividence recommends the following guidelines
in preparation for the Holiday season (with percentages of participants in
parentheses).
Top 10 Rules for Holiday Success
1. Save customer shopping carts for later visits.
Customers do return later to purchase items “abandoned” in their cart. Make it
easy for them by keeping their cart items for 30 days or more.
2. Offer a promotion or incentive to purchase.
Promotions or deals act as a differentiator between sites. Offering free
shipping will address the most common purchase influencer.
3. Show shipping prices early.
Customers prefer choosing shipping options and seeing shipping prices in the
shopping cart (82%).
4. Make site registration optional.
Customers are more likely to abandon their cart if registration is required
(52%).
5. Consider a charitable donation tie-in.
Customers are increasingly interested in donating to charity (69%). Sites that
contribute in some way will engender customer good will.
6. Keep products in stock.
Out of stock products are frustrating to customers, especially when
notification is delayed until the user places the item into their shopping
cart.
7. Provide order tracking.
Customers want to reduce uncertainty about delivery time by tracking their
orders. This will also reduce calls to customer service.
8. Shorten the checkout process.
Customers prefer entry fields on one screen vs. multiple screens (60%).
9. Be clear about delivery time.
Customers want to know when their items will arrive.
10. Provide paper gift certificates.
Gift certificates can influence purchase (34%) and customers tend to prefer
paper to email gift certificates (36%).
Ensuring these recommendations ultimately meet customers’ needs depends on
whether they are implemented in an easy-to-use design. Design flaws can be
subtle and many times can only be uncovered by testing the site with actual
users. For example, delivery times for products may be posted in what seems
like a logical place on the site. However, if the typical user does not notice
this information, then all benefits of the feature are lost. All design
changes should be tested with users to make sure no further problems are
uncovered.
Screenshots of best practice designs for retail Web sites
Please see Appendix: A for screenshots of examples of good Web designs for
shopping cart, shipping prices, checkout, and registration.
PART 2: TRENDS FOR THIS YEAR’S HOLIDAY SHOPPING COMPARED
WITH LAST YEAR
Why customers shop online
Likelihood to purchase online remains high for 2001, with 91% of participants
reporting they will do at least some of their holiday shopping online.
Convenience continues to be the top reason cited.
How customers find shopping sites
Compared with last year, customers are more self-directed in finding shopping
sites. They are relying less on banner ads, online message boards/newsgroups,
email promotions, and recommendations from others, and more on search engines
and sites related to known offline brands.
In addition, consumers may be getting more comfortable with shopping online
(with increased percentage of participants in parentheses):
· Customers report that they are going to click & mortar sites directly (up
17%), rather than being directed through email promotions or banner ads.
· They are also using search engines more (up 10%).
· It’s easier to send gifts to others (up 10%) and more are doing it (up 13%)
· They are finding what they need more quickly (20% average decrease in time
to complete shopping tasks, despite viewing the same number of pages)
PART 3: HOW THE TRAGIC EVENTS OF SEPTEMBER 11TH HAVE
AFFECTED HOLIDAY SHOPPING PLANS
Because of the tragic events of September 11th, Vividence re-ran the 2001
Holiday Readiness study to see what, if any, impact the events had on
consumers’ shopping attitudes and behavior. The events did not change the top
influencers and recommendations, nor the general trends found between last
year and this year. However, when participants were asked directly how they
felt the events would change their behavior, they reported that they plan to
spend less overall this year, due to concerns about the economy, but that they
plan to shop online more.
Plans for this holiday season after tragic events of September 11th, 2001
(with percentage of participants in parentheses):
· There is more concern about the economy (71%)
· They plan to shop in stores less (37%), only 4% plan to shop in stores more
· They plan to spend less overall (34%), only 10% plan to spend more
The economy is the main reason why customers plan on spending less this
season, which held constant before and after the tragic events of September
11th.
In the aftermath of September 11th, people felt the tragedy would change their
behavior. They reported that they would (with percentage of participants in
parentheses):
· Donate to charity more (69%)
· Spend more time with family and friends (52%), only 3% plan to spend less
time
· Travel less than before (49%), only 1% plans to travel more
· Shop online more (37%), only 8% plan to shop online less
When asked why they would shop online more, the most common reason cited was
concern about safety in stores.
Understandably, concerns this Holiday Season are dominated by the economy and
world events. Safety is the number one concern, and as mentioned earlier, the
number one reason given for why people will shop more online.
PART 4: CONCLUSIONS
Challenges
Consumers are clearly worried about the economy and are likely to be
conservative with their gift-buying budgets this year compared to last year.
Prices, promotions, free shipping and other financial incentives will likely
be strong drivers.
Consumers are more likely to shop at sites of well-known offline brands. When
a consumer goes to a well-established brick-and-mortar branded site,
expectations are high for a positive customer experience, including customer
support, ease of use, stock availability, secure shopping, helpful shopping
features, site performance, and conformity to Web conventions. Many customer
experience issues, especially ease of use issues, can be fixed by focusing on
improving the customer experience. There is little excuse for not getting Web
design basics right. Vividence’s Top Ten recommendations represent quick wins
to address top customer complaints about online shopping.
Shopping cart abandonment rates remain high, and retail businesses need to
ensure that their Web designs encourage follow-through. Our data reveal,
however, that shopping cart abandonment—as measured in Web logs—is not
necessarily always bad. A large portion of this abandonment simply reflects
how customers comparison-shop and shop over time. For example, people leave
items in their cart until they can come back with a coupon or offer, or until
they can afford the item. These are behaviors that sites cannot easily change,
but the more they understand and facilitate them, the more they will encourage
customers to return at a later date to complete that purchase.
Opportunities
This holiday season, people are more familiar with the Web and can draw on
their shopping experiences from last year. This increased experience will
allow customers to form appropriate expectations for the conveniences that
online shopping offers. Taking advantage of features, such as gift lists, gift
advisors, and price comparison tools may be less daunting to consumers this
year. The holiday season represents an opportunity to capture more holiday
dollars online but also to hook more customers on the advantages of online
shopping throughout the year.
The fallout from the tragic events of September 11th may provide an unexpected
opportunity for companies to showcase the advantages of online shopping.
People report that they will spend less overall this season but will shop
online more due to fears about the safety of being in crowded stores and
malls. People also anticipate traveling less this holiday season, which makes
the ease of shipping gifts online an attractive alternative for gift buyers.
Submitted by:
Molly Holtman
Phase Two Strategies
111 Pine Street, 8th Floor
San Francisco, CA 94111
Phone (415) 772-8448
Fax (415) 989-8186
About Vividence Corporation
Vividence is the leading provider of Customer Experience Management
products and services to the customer-driven enterprise. By capturing the
behavior, thoughts and attitudes of customers on the Web, the Vividence XMS
Suite™ yields business insights that improve profitability. More than 200
customers, including Best Buy, Cisco Systems, Citibank, Compaq, Dell, eBay,
Microsoft, Pfizer, SAP, Wells Fargo and more than 100 of the Fortune 1000 use
Vividence. For more information, please visit
www.vividence.com.
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