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Few E-Tailers Use Online Tools That Could Boost Profits

Few E-Tailers Use Online Tools That Could Boost Profits

E-Tailers have an aversion to deploying technology that could boost profits - a surprising insight given, well, the nature of their business and given the state of retail in general over the past year. Yet studies and anecdotal evidence point to this conclusion.

One new study by Ovum, commission by StellaService, found that customers are willing to pay a 10.7% premium for 'excellent' online customer service - an amount that was sized in the aggregate to be $17.3 billion a year. That is a surprisingly large number, says StellaService CEO Jordy Leiser (via E-Commerce Times).

"It was quite a shock for us, actually, especially considering that so few companies meet the criteria for offering this level of service." According to the survey, 'excellent' online customer support includes online tools, interfaces and content, easy to use return policies and a human operator if needed. StellaService found that Zappos.com, Diapers.com, BlueNile.com, Amazon.com, Staples.com, Crutchfield.com, LLBean.com, BestBuy.com, Apple.com, Sears.com, REI.com, Ebags.com, Onlineshoes.com, Orvis.com and Netflix.com were the top 15 retailers that offered the best online customer support.

Blogging is another overlooked online tool by retailers - even though it can lead to additional sales, writes Investopedia. Of the top 100 internet retailers of 2009, only 44 of them had a blog and just 36 posted on a frequent basis, it said. "Investors rightly should expect retailers to do everything in their power to drive traffic to their online stores including the use of blogging. It's a critical piece of the e-commerce puzzle and many companies still are dropping the ball."

Amazon, for example, writes 13 blogs include Zappos, it said. "If Jeff Bezos and company see the benefits, everyone should. Ignoring his lead is like a musician not listening to the musical advice of Sir Paul McCartney. It's just plain dumb."

Luxury retailers, for their part, are not using all the tools at their disposal either - in this case, virtual showrooms with a human operator eagerly standing by, according to the Financial Times. Some are - most notably Faberge, Bulgari and Tiffany.

But for the most part, luxury retailers, especially of jewellery, find it difficult to create "the virtual luxury experience online and provide the adequate 'luxurosphere'," says Uche Okonkwo, executive director of Luxe Corp in Paris. "Luxury brands have resisted the web for so long and many were hoping that it would just go away," she says.

"But now jewellery brands have finally understood that the internet is here to stay, so they are playing catch-up. But, so far, there is virtually no one in the world of luxury who is doing it well."

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