Navigate this site

Struggled to deliver online over Christmas 2004 - Zendor gives advice for getting it right in 2005

Press Release

By: Zendor
24 January 2005

Statistics show that Christmas 2004 was a success for many retailers with a transactional website as there was a massive 64% increase in online spending compared with Christmas 2003 (Source: IMRG). Hitwise also reported that traffic to online shops soared during December, with websites reporting 23% more visitors than Christmas 2003. Despite these impressive statistics, some retailers have struggled to ‘get it right’ during the festive season, many by over-promising and under-delivering in terms of product availability and speed of delivery. So, where did they go wrong? Distance shopping expert Zendor identifies the most common mistakes and advises on how can these can be avoided in the run-up to Christmas 2005:

Incorrect forecasting - Inaccurate Christmas sales forecasts will have caused some online retailers to over- or under-stock their warehouses for the Christmas period. The result - customer frustration and/or a dent in profits. Forecasting for Christmas needs to begin ten months in advance of the big day and be reviewed nearer the time to ensure accuracy.

Poor merchandising, - Product selection is always tricky to get right as what sells well in-store may not sell well online. Poor merchandising may also result in certain goods being damaged on arrival; for example, fragile goods such as light bulbs are intrinsically unsuitable for distance shopping.

Inadequate call centre service - Poor customer service over Christmas can be blamed on understaffed call centres and/or customer service representatives being inadequately trained. Recruitment of sufficient call centre staff is needed months in advance of Christmas and should be quickly familiarised with the retailer’s products, packaging and services.

Deficient packaging - Poor packaging may be the cause of damaged goods. To minimise goods arriving damaged on the customer’s doorstep, retailers should chose suitable, robust packaging and ‘road-test’ well in advance of Christmas.

Christmas delivery failure - Retailers who failed to deliver by Christmas will have damaged their reputation. To ensure all orders arrive by Christmas, a home delivery contingency plan needs to be put in place which sets a cut-off day for Christmas orders and defines which day the standard delivery service should be upgraded to guarantee all orders arrive in time.

Underestimating returns - Retailers who did not cope well with returns over Christmas will have cost themselves money. To avoid this next Christmas, the volume of returns needs to be estimated months in advance so that adequate preparations can be made. Customers could also be provided with the option of returning items bought online via other shopping channels e.g. the high-street store.

Inconsistent service across channels - Contradictory levels of service across shopping channels will have created customer frustration and confusion in some cases, and the retailer is judged on this. Lack of consistency can be the result of channels being set up independently of one another and so a fully integrated multi-channel approach is necessary to avoid mixed messages being sent out.

Poor customer targeting - Not targeting customers with suitable offers may be to blame for disappointing Christmas sales. Retailers can analyse their customer databases to ensure that the right people are targeted with the right offers at the right time. Effective customer targeting can result in increased response rates, reduced costs and ultimately, increased sales and profitability.

Christmas is regarded as the biggest test of the year for retailers - a time when they will either ‘sink’ or ‘swim’. With the online channel maturing quickly, and customer confidence and demand growing still, online retailers are especially vulnerable to criticism during the Christmas period. Therefore, the long-term survival of online retail relies upon ‘getting it right’ at this time of year. Retailers should use the lessons learnt from Q4 2004 to plan for Christmas 2005 - now is the time to make the necessary investments. Should online retailers choose to ‘sit back on their laurels’ for the next few months, Christmas 2005 may well be an even bigger challenge than the last!