Jun 18 2007

Online Commerce Slow-Down?

Published by at 7:42 pm under Commerce,Interactive Marketing

I am a big ecomm geek -- from the first year Amazon was in business when I bought about $500 in books (primarily on Byzantine History, I am a Constantinople geek), to my present gig at Lenovo, where a major part of my portfolio of my responsibilities lies in getting customers in the virtual door of the virtual store, I have been, and continue to be a big fan of online shopping. Will it cure global warming, cut traffic, and drive the Long Tail? Sure, a little bit at least, and all of us, I'm sure, can make some testimonial to our love affair with the old online shoppe and the trips to the stores and malls it has spared us.

Over the weekend the august New York Times sounded the warning buzzer to the ecomm party, saying the progonisticators at Forrester and Jupiter and other crystal ball shops are predicting a slow down in ecomm growth rates. Well sure, we're now in Year Twelve of the ecomm revolution, and as the venture capitalist Ben Rosen (Lotus, Compaq) once told me, it''s easy to double revenues when you start from nothing. The Times article had an interesting quote from a disillusioned online shopper:

"He and his wife, Liz Hauer, 51, a Macy’s executive, also shop online, but mostly for gifts or items that need to be shipped. They said they found that the experience could be tedious at times. “Online, it’s much more of a task,” she said. Still, Internet commerce is growing at a pace that traditional merchants would envy. But online sales are not growing as fast as they were even 18 months ago. "

Tedious. Memorize that word. Tedious is apt and accurate when it comes to describing the typical shopping experience. How many people dread the same form field fill-out (save those who use the Google auto-complete function), who enter into a shopping cart wondering if they will miss a required field, mistype a character, or run into some strange, opaque security threshold that reject orders that specify a different shipping address from a card's billing address, or a vendor that screws military and government personnel seeking an APO delivery?

At Lenovo we've run in a serious rough path recently because of inaccurate Estimated Shipping Dates (ESDs) which give a shopper a sense of when they might receive their order, a crucial thing for small businesses and individuals who need a product to stay in business or start school. When the ESD is wrong -- because the process for updating it is either manual or symptomatic of a broken back end system, then all hell breaks loose.

Dysfunctional ecommerce weighs heavily on my mind. Today, my wife confirmed for me what the Times was reporting. When the novelty wears off, when the sense of adventure in ordering a book online fades, when winning another eBay auction is as routine as buying a cauliflower ... when that happens then the grumpiness follows.

So my wife decides to equip the household's tennis players with some shoes, shorts, rackets, balls, etc.. Her business partner told her to order from a site, I think it is called "Tennis Warehouse" or something, but it doesn't matter. The upshot is after spending close to an hour shopping, comparing, selecting and de-selecting, then committing the cart to her credit card, she received an email from the merchant asking to see a photocopy of her driver's license, information about the originating bank, and other personal data that set her "phishing" scam bells a-ringing.

Fuggedabodit, I told her. Screw them. Go elsewhere. No merchant in their right mind asks for anything other than the little security code on the card. She was pissed, so pissed she called information, tracked the merchant down to San Luis Obispo, and flamed the first customer service rep unlucky enough to answer her call.

Turns out any order over $400 triggers the security measures. Solution? Split it into two orders -- now she's going on more than two hours for the transaction -- resubmit, pay with PayPal and done.

Why can't someone make an ecommerce experience that is seamless and secure and semi-fun? Remember when Amex came up with the lame-ass Blue Card? The one with a chip embedded in it? What was that about? Wave it over the laptop and watch the transaction go down? Not likely.

We may be a dozen years into the online commerce revolution, but it still feels like 1995 to me. Let's "web 2.0-ify" the whole mess and get it to the next level.

6 responses so far

6 Responses to “Online Commerce Slow-Down?”

  1. Jim Forbeson 18 Jun 2007 at 11:16 pm

    David,
    Right On! i just tried unsuccessfully to fill a 1st cousin’s request for a notebook computer, to be shipped to him in Iraq and I gave up. the bastids can’t even accommodate our service men and women? this really flames my ass.

    Jim

  2. [...] David Churbuck has an excellent piece of insight into the slowdown we’ve seen in ecommerce as reported last week by the New York Times.  The crux of his point (but go to his site and read the whole post, it’s worth it): Tedious. Memorize that word. Tedious is apt and accurate when it comes to describing the typical shopping experience. How many people dread the same form field fill-out (save those who use the Google auto-complete function), who enter into a shopping cart wondering if they will miss a required field, mistype a character, or run into some strange, opaque security threshold that reject orders that specify a different shipping address from a card’s billing address, or a vendor that screws military and government personnel seeking an APO delivery? [...]

  3. Estebanon 19 Jun 2007 at 8:51 am

    Nice post. Absolutely true, once novelty wears off, you just see it as a pain in the neck. Thus the challenge for designers, strategists and architects is to try to build up the best possible experience from homepage to delivery. Not an easy task, yet not impossible.

    Regarding form filling there’s little to do about that; since at any given moment you’ll have to input all your data; but there could be some design and code tricks to make this process less miserable.

    Finally the growth slowing down might be true in Europe, US and Japan, but on all “emerging economies” (funny thing to call it that way… those economies have been “emerging” for over 50 years, a matter for a separate discussion) e-commerce is STILL in 1995. Argentina, for instace, had a 100% growth year-to-year in 2006 on ecomm transactions. Other countries have had similar figures.

    I truly believe ecommerce can be made a sublime experience. For many people “traditional shopping” is already, the challenge is to identify and extrapolate what makes / could make on-line shopping exciting again. That is besides the old “buy in your pyjamas from the comfort of your house” advantage. Everybody takes that for granted nowadays.

  4. HOGDICKon 19 Jun 2007 at 10:56 am

    David, I don’t shop. I buy. Getting my wife (your stepsister in law) her AWSOME Lenovo T-60 notebook, for our (10th) anniversary (tin) took about 2 whole minutes. Truly stress free. So, if one knows what one wants; isn’t it more simple to just buy the best value online w/ a minimum of fuss? I don’t know; “I’m just a caveman.” Cheers HD

  5. Brianon 19 Jun 2007 at 12:51 pm

    I am surprised that projected online sales are declining. I for one shop more online now than I do in B&M. The only reason to go B&M is to verify the size or functionality of an item that you can’t do online.

    It would be interesting to know how well B&M stores that also have online stores (Circuit City, Best Buy, etc.) have been able to keep from losing a customer base to online stores by providing their own web interface to either ship directly or have in store pick-up.

    The interface for online shopping is very 1995 I agree, but honestly it isn’t as bad as having to get in the car, drive 20 minutes, wait in a check-out line then drive back home. And all that assumes you know what you want. Heaven forbid you have to ask someone for help in one of these stores. Most of the time I think people will research their item online anyway (am I wrong people). Since you have invested all this time online to research your potential purchase online and have determined the best price, what would compel people to purchase from a B&M except they can have the item immediately.

    I for one will continue to shop online and avoid the madness that comes from visiting a mobbed mall.

  6. Debbieon 14 Sep 2007 at 8:16 pm

    One thing not mentioned in the article is the reason that the merchant had to ask for all that information. It’s because merchants are being bombarded with stolen credit cards. Stolen credit cards that show no indication of being stolen as the thief has all the information needed to make the sale seem legitimate. Its not the consumer or the credit card company that takes the hit for a stolen card and therefore stolen merchandise. Its the merchant. Not only is the merchant out the goods and the money but they are also hit with fees for accepting the stolen card although the stolen card was approved as valid but the credit card companies.

    Small business have no choice but to go to extreme measures to verify that the card is valid. While credit card number are being exposed and stolen and “flagged by the card companies” merchants are not told. They process the card with all the information being approved by the credit card companies, ship the merchandise and then find out that the card was stolen.

    The thieves aren’t being prosecuted. Its highly lucrative for them. The burden is falling solely on the merchants

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