Merry Christmas, or Else

According to a recently released PricewaterhouseCoopers report, although overall holiday Internet sales went up, it is doubtful whether disgruntled online customers will flock back to e-tailers after their less-than-stellar holiday performance.

The survey was conducted from Dec. 28, 2000, to Jan. 3, 2001, and yielded a sample of 570 Internet users. The researchers gauged online shopping behavior, attitudes, and Internet usage.

According to the report, nearly 80% of Internet users shopped online for gifts during the 2000 holiday season, up from only 69% in 1999. Actual Internet purchases went up from 67% to 74%.

This picture may look rosy for e-tailers; however, the erosion of customer satisfaction from 1999 to 2000 may be a problem for e-merchants’ continued growth. According to Mary Brett Whitfield, director of the PricewaterhouseCoopers E-Retail Intelligence System®, “Getting online gift shoppers to return in the New Year is crucial to their success.”

The report shows that online holiday gift purchase satisfaction slipped in 2000 from 1999 levels. Almost half of the shoppers surveyed reported some dissatisfaction with their online shopping experience. PricewaterhouseCoopers reports that the biggest complaints among consumers are merchandise out of stock, excessive page load times, and products unavailable online. Among actual purchasers, customers were dissatisfied with late gift delivery, not receiving e-mail updates, and extra fees for on-time delivery.

Nevertheless, the report does point out that online shoppers are not easily discouraged from shopping online, suggesting that customers give e-tailers some latitude when it comes to order fulfillment. Seventy percent of online shoppers who reported problems that caused them to shop elsewhere found themselves back where they started, the report notes.

Also, Internet shoppers are less concerned about the prices they pay than they are about shopping convenience. Fewer than one-third indicate that they shopped online for bargains.

Brick-and-mortar outfits still attract the majority of holiday shoppers, 60%, as opposed to 26% for e-tailers. Multi-channel retail operations have a huge advantage because they can dive into many channels for revenue, especially if those channels are integrated. According to the report, 44% percent of Internet users who did not shop online for gifts said they did not do so because they enjoyed shopping at brick-and-mortar stores.

The report says that consumers spent less overall for the 2000 holidays online than last year. Fifty-eight percent of online holiday gift purchasers reported that they overspent their holiday budget in 2000, as compared with 79% in 1999.

“As online gift purchasing becomes more common, more and more online gift purchasers will reach their threshold for share of gift purchasing done online compared to other formats,” says Whitfield. “As more purchasers reach this threshold, the percent reporting spending a larger share than the previous year will slow.”

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