eCommerce Blog

I often think about my shopping experience at an online retailer in US – Landsend.com. I purchased a shirt from this retailer using their web site. I typically do not purchase apparel online, because of concerns related to fit and quality. However, I liked the shirt and decided to purchase it. Although the purchase experience was great, the story doesn’t end here. One year later, I called them to purchase some additional clothes. At this point, I casually mentioned to the CSR that I wasn’t too happy with the quality of one of the shirts I purchased from them in the past. The CSR first apologized and then offered to send me a replacement for no additional charge. Since this incident, I have probably shopped with Lands’End atleast 8-10 times.

This incident got me thinking - how do you measure ROI on offering good customer experience? and more importantly, what are the acceptable boundaries around customer experience? A company can chose to offer a completely transactional experience with no regard for the customer. These are the companies, who I would argue, have a myopic view of how to make money. I would further argue that a bad, purely transactional experience is actually costing the companies more in terms of “opportunity cost” of losing the possibility of a repeat purchase.

In the Indian context, a lot of retailers think of customer experience as something that starts once the customer enters the store and ends immediately after the customer makes a purchase decision or leaves. The customers certainly need to be treated well during their purchase cycle, however, what is even more important is how they are treated after the purchase cycle. Numerous studies have suggested that a retailer’s most profitable customers are ones who make repeat purchases. However, it is ironic that a number of retailers in Indian market tend to focus on the current transaction, without thinking about maximizing the possibility of a repeat purchase.

Lets take this to the online world where a customer is trusting the retailer with their money without even taking an immediate possession of the goods. In this case, it becomes extremely important to ensure that there is a strong, clear and proactive communication with the customer during all phases of order life cycle. A number of Indian online retailers today send email or SMS alerts when order status changes. However, not many retailers actually follow-up with a customer after shipment is complete. It also becomes extremely important to quickly resolve any issues related to wrong shipment, defective or damaged delivery or customer returns. I am not suggesting that the online retailers go to the extreme of offering unconditional return policies or exchanges after even 1 year of purchase. However, I do think it is important for a retailer to demonstrate compassion, strong sense of urgency and an honest attempt to resolve customers’ issues. There is certainly the risk of customers mis using the system to their advantage. However, in my opinion, this is a small price to pay in return for winning over 90% of the other customers who had genuine issues with their purchases.

The user experience on the website is also extremely critical. In the Indian context, majority of the online sites try to maximize the use of banner ads and other promotions to showcase every single marketing message that could appeal to the customers. However, in my opinion, this approach actually makes the experience worse. Too much clutter on the home page is likely to confuse and possibly annoy the customers. I compare the user experience on an eCommerce website to the interior design of a B&M store. It needs to be simple, fresh, inviting as well as easy to navigate. The customers must feel in control and should be able to quickly find the products and complete the checkout process. In fact, studies indicate that if it takes more than 4 clicks to complete checkout, customers are much more likely to abandon their shopping carts.

There is a huge potential and market for eCommerce in India. Few players have already established good eCommerce capabilities and there are new ones on the horizon. However, the true winner would be the one who masters the art of offering a great customer experience. Technology platform and the breadth of assortment are certainly necessary in driving sales. However, a strong customer experience is extremely necessary in building lasting customer relationships.