Getting ready for the onslaught
On-line stores are beefing up and spiffing up for the holidays
By Michelle Johnson, Globe Correspondent
Imagine walking up to a major department store during the height of the holiday shopping season and finding a note taped to the door that reads, ''We're sorry. We've reached our capacity of shoppers. Please try later.'' Not likely. Yet that sort of message is exactly what on-line shoppers get when they can't connect to a shopping Web site.
With analysts forecasting a big boost in on-line shopping this year, capacity is one of the top issues on-line merchants must have wrapped up in time for the holiday shopping season.
On-line retailers are looking to avoid last year's catastrophes, which left some shoppers disenchanted when overwhelmed e-commerce sites ran into delivery and service problems.
Holiday business is now as important for ''e-tailers'' as it is for traditional retailers. Those who aren't ready for the holiday onslaught risk losing out on a share of the $6 billion consumers are expected to spend for goods and services on line this year. That's about double what was spent last year, according to research firm Jupiter Communications of New York (www.jup.com).
Those shoppers will have little patience for e-tailers that can't handle a busy holiday season. At the first sign of confusing ordering systems or slowdowns due to high traffic, they'll be gone in a click.
What's an on-line store to do? Beef up.
Backend shipping, payment processing, and customer support systems are undergoing overhauls. Stores have added hardware, and updated their commerce software.
Yet some sites, analysts say, won't be ready to handle the expected rush. They're still too focused on increasing traffic instead of increasing their ability to handle that traffic.
Shoppers who log on to buy holiday gifts this year may barely notice all of this back-room scrambling, but the result could be that they'll have a better time shopping on line. Here's why:
More customer service
One of the big lessons e-tailers learned from the catastrophes of last year is that customers are less concerned with price than with good service. So this year, they're pairing old-fashioned personal service _ a friendly human being at the other end of a phone line or computer screen _ with better technology.
''We've put more bodies on board,'' says Alan Marcus, a spokesman for toy retailer FAO Schwartz. Added staff will monitor the performance of www.fao.com and shore up customer service over the holiday season. The company's ''fulfillment center,'' which processes orders for its catalog business, will also handle Web site orders.
Personalized service
Shoppers like sites that offer features tailored to their needs.
At Land's End's e-tail site, www.landsend.com, holiday shoppers will find a new feature that lets them create a virtual model that has their measurements (now that's a scary thought). They can try clothing on the model to get a sense of how an outfit might look on them.
However, I recently clicked on the link for that feature and got the equivalent of a busy signal: The site had reached capacity.
Lands' End is touting its crew of personal shopping assistants who answer questions and chat live with customers on line.
More items, better delivery
Bloomingdale's Web site (www.bloomingdales.com) has increased its items for sale this Christmas from 3,500 to 5,000, and bolstered the operations that fill orders and help customers.
Last year, on-line shoppers were particularly peeved at e-tailers who ran out of items and didn't let them know until days after they had placed their order. That happened because on-line ordering systems were not linked to warehouse inventories.
That's no longer the case at some of the larger e-tail outlets, and popular sites such as eToys.com and ToySmart.com have bulked up their order processing systems for the holidays.
However, the fact that some e-tailers are ramping up doesn't mean shopping on line will be a breeze this year.
''I think there are a lot of firms that are not ready,'' says Jupiter analyst David Schatsky. ''There are going to be a lot of problems out there meeting peak demands.''
Schatsky believes that the weak link will be in filling orders.
Only about 15 percent of the e-commerce sites surveyed by Jupiter said they believe their Web sites or commerce software would not hold up during a spike in usage. But when asked what might break down if their business doubled overnight, 26 percent of the e-tailers predicted that their call centers, which handle customer service, would fail, and about a third said their order-filling operations would buckle. Only 10 percent of the sites said they could handle a doubling of business.
Peak loads this year, in the case of top e-commerce sites, will mean processing an average of 58,000 transactions a day in November and December, according to Jupiter.
E-tailers also must focus on making consumers more comfortable with paying for their purchases on line, analysts say. Despite the fact that it's not a widely reported problem, fear of credit card theft remains among the top reasons consumers cite for not shopping on line. (See related story, ?.)
''Whether real or perceived, these fears pose a threat to e-tail,'' says Mark Wright, CEO of @plan, another Web research company. In a recent @plan poll, 63 percent of cosumers surveyed said they would not make purchases on line because of concerns about credit card security.
A handful of e-commerce sites, including www.walmart.com, have responded by guaranteeing shoppers that they will pick up costs not covered by credit card companies in the event of theft.
Confusing Web site design and complicated ordering systems also stand to hurt on-line sales this holiday season. In a report titled ''Holiday '99 E-commerce,'' Creative Good, _ an Internet consulting firm (www.creativegood.com), tested the top 10 e-tailers, including www.llbean.com, www.disney.com, and www.sharperimage.com.
Among the findings:
39 percent of the test shoppers failed to complete a purchase; they gave up after becoming discouraged by errors and confusing navigation.
56 percent failed to successfully use the sites' search functions. Creative Good says that if just half of those shoppers had found what they were looking for _ and then bought it _ e-tailers would earn another $7.9 billion in holiday sales.
While shoppers may privately grumble when bricks-and-mortar stores fall short of expectations, on line they can spread their dissatisfaction far and wide, thanks to Web sites that invite shoppers to rate e-tailers, such as www.bizrate.com.
Just like their ''analog'' counterparts, major e-tailers are monitoring customer satisfaction through third parties or their own surveys.
This year they'll also be able to turn to SANTA (Shopping Audience Net Transaction Analysis), to find out whether shoppers have found their sites naughty or nice.
A service of VRROO(Virtual Research Room, www.vrroom.com), which offers services to companies that conduct on-line research, SANTA will recruit ELVES (Electronically Linked Virtual Evaluation Shoppers) to shop at client Web sites and offer feedback. ELVES will receive a credit on their purchases.
Bad shopping experiences could have implications for e-tailers far beyond the holiday shopping season. Disgruntled shoppers aren't likely to return to sites that have given them grief. So e-tailers who fulfill harried holiday shoppers' wish lists with lots of inventory, smooth ordering systems, and reasonably priced shipping stand to keep their business.
Despite the high-tech nature of on-line shopping, consumers will likely fare OK if they follow the same rules for shopping in traditional stores during the rush.
Shop early: Just like in off-line shopping, there's no guarantee that popular items will be in stock throughout the holiday. Leaving purchases to the last minute may mean missing out on the hot items. Leaving enough time can also lower shipping costs. Adding overnight shipping charges can significantly raise the cost of a product.
Safeguard financial and personal information: Shoppers are often warned to keep an eye on their wallets and pocketbooks. That applies on line as well. It's not likely that shoppers will find a major e-retailer who doesn't take credit card information via ''secure servers'' that encrypt the information for safety. But check if the site has a privacy policy. Look for icons that show that its security has been vouched for by a third-party company such as Veri-Sign or TRUSTe.
Ask around: Shoppers remember e-tailers that don't measure up, and they'll let other shoppers know. They also will spread the word about good sites and good deals. Shoppers who are unsure whether a company is on the up and up can do a quick search at sites such as www.deja.com to see what others have said about a company, or check the Better Business Bureau's Web site, www.bbb.org, to get the lowdown.
