Internet shopping for the holidays predicted to be bigger than ever—and why
Research shows that one-third more consumers than ever before—about 41 percent according to a Harris Interactive/Blue Martini poll—will use the Internet to do at least some of their holiday shopping. Donna Hoffman, co-director of the Vanderbilt University Sloan Center for Internet Retailing, attributes the expected rise in Internet retailing this year to better broadband penetration (meaning better and faster graphic representation of products), more people than ever being online and more of them having better shopping experiences. "Internet shopping is now a mainstream task, where as a couple of years ago, people were still concerned about the security of the transaction and whether what they ordered would arrive on time," Hoffman says. She compares it to the advent of catalog shopping: "It took 100 years for catalog retailers to account for 5 percent of retail sales, while the Web has nearly matched that in about five years." Hoffman adds that the success of Internet retailing has been helped by multichannel retailers who promote all of the different avenues through which they sell, leading people to view Internet shopping as a convenient extension of shopping in the store.
Stakes are higher when customer service blunders occur during holidays
Turning customer service failures—an inevitability during the holiday shopping season—into an opportunity to impress customers is a trick best left to only the most skilled, high-end retailers, according to Ruth Bolton, professor of marketing at the Owen Graduate School of Management at Vanderbilt University and editor of the Journal of Marketing. "Customers base their decisions on whether to return to a retailer on one question: 'What have you done for me lately?'" she explains. "When the masses of holiday shoppers meet staffs of overworked store employees, the result is a lower level of customer service. A shopper who has a bad experience may not give the retailer a chance to respond to the service failure at all; if he does, however, the retailer has exactly one shot at making the situation right, or risk reinforcing the customer's negative impression. A second negative experience is likely to completely eliminate any intended goodwill. So while it is true that retailers' excellent handling of service failures can lead to increased customer satisfaction and loyalty, this 'happy ending' is obtained only at the very highest levels of customer service—levels that may require substantial investments in employee training and other resources." Bolton concludes that retailers are better off focusing on doing it right the first time during the important holiday shopping season.
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