Broadband Opens Way to Greater Sales Online
By George Anderson
Dan Hess, senior vice president of comScore Networks, told attendees at the Internet Retailer 2005 conference that the growth of broadband connections in homes is helping
to drive an increase in online retail sales.
Mr. Hess said, excluding auctions and travel, online retail sales grew 26 percent last year to $65 billion.
Today, more than half of the Internet users in the U.S. have a broadband connection at home, said Mr. Hess.
According to a Dow Jones Newswires’ report, greater access to broadband connections as well as “more consumers feeling comfortable using the Internet to shop; an increased use
of search engines to find items; the increased use of comparison shopping sites; and retailers reaching customers through several mediums” are the five most important factors
behind the growth in online sales.
Consumers’ increasing comfort is evident when you see that higher-priced items such as jewelry, watches, furniture and appliances are being purchased more frequently online.
Moderator’s Comment: What do you see as the biggest challenges that need to be overcome to get even more consumers shopping online? Which retailers make
it easiest to shop online? How do they do it? –
George Anderson – Moderator
Increased buying online will happen as a natural consequence of demographic change. As younger consumers become older consumers, they will demand broadband in their residences and they will, as a matter of course, buy online.
This phenomenon not only affects online commerce, it affects many other business practices, as well. Consumers that grew up SMS-ing their friends will wonder why their local store can’t send them an alert on their cell phone when a product is in. They’ll expect restaurants to put them on a waiting list through the web and send them a cell phone page or an email 1/2 hour before their table is expected to be ready. They’ll want to ask questions at ecommerce sites through IM, and email their hairdressers, doctors, manicurists, physical trainers, and priests to make an appointment.
Get ready for them! They’re coming!
I think Bernice is right that “identity theft” is a potentially limiting factor in the short term. The problem needs to be fixed, not at places where identity is used, but at places where that identity can buy you other forms of identity. In other words, banks have to make it harder to get a credit card with nothing more than information that could have been easily swiped off a website. I think biometrics is going to play a part in this at some point.
But I don’t think the above is that limiting. I agree with Anna that the culture is moving that way, and it has a ways to go before balancing out.
Strikes me that the biggest challenge is the almost parallel growth in identity theft. As an early and regular online shopper, I am now more cautious than ever about actually making a purchase. I do my research online and choose what I want but also go to great lengths to verify the safety of the site and the reliability of the merchant. Also their delivery method. Unlike American stores that encourage customers to come and collect what they have bought, in the UK virtually everythig ordered online is delivered. Courier companies (and, worse, the post office) are less than totally reliable and even less than totally helpful when they lose or damage something. Information, pricing and quality have improved greatly, customer service is generally pretty good but ancillary services and security will continue to be challenges for a while yet.
However great the growth in online shopping, it could be much greater, if only connections were better. Having spent the bulk of this week traveling and trying to get e-mail via wi-fi “high-speed” hot spots at airports, via AOL phone lines, and via “high-speed” wireless access at hotels, there has to be a large percentage of traveling consumers and business people who would do more on the Web were it not for a cobbled together infrastructure of very spotty Internet access. The promise of high speed wireless Internet access and connectivity via PDA’s and cell phones is currently better than the reality. “Can you hear me now?”
Clarity in the information and ordering processes is paramount. We sell products online, and frequently receive emails from customers asking how to order our products. To find our email address, they’ve already navigated through three pages, each of which answers their question as simply as possible. We speculate that they’re the same customers who enter a retail store, look at the signs, and then ask a clerk for the same information provided on the signs.
To anticipate these questions regarding product features or the ordering process, and then to handle them ahead of time, is the holy grail of e-commerce to us. We understand that there will be no breakthrough, that we must constantly hone our communication to the most easily-understood level possible, and that this process never ends.
I think the most important thing that online retailers can do is to make their sites easy to browse, simple to find desired merchandise and services, and expedite the checkout process.
Too many online retail sites are laid out very poorly, making it difficult to link into the process of shopping.
I’d suggest that every online retailer retain the services of a brick and mortar merchant, or even just have one to look over their site, to make sure it flows in a sequence that would be comfortable to a shopper.
No need to retrain shoppers or browsers. We all visually scan the environment the same way we were taught to read, top to bottom, left to right. Whether you are looking for a can of soup, or buying diamonds.