July 13, 2010
CNBC
cnbc.com
‘Click to Chat’ or ‘Click to Call?’ Depends on the Scenario
In a store, sales clerks can serve customers’ needs when they see there’s a need, or greet them when they walk in the door, but online it’s a more difficult task. What works better when it comes to live help on a Web site?
Whether the customer and salesperson interact via chat or phone call, live help serves as a solution to multiple online scenarios. In general, live help appears to be useful when shoppers want immediate responses to inevitable questions.
A study conducted by Art Technology Group, a maker of e-commerce software, found 58 percent of consumers said they would use live help if there was missing information on a Web site. Meanwhile, 53 percent would use live help if they had trouble at check out or while filling out a form. About 37 percent of consumers use live help if the return policy isn’t stated clearly, and 28 percent seek live help when they hear about sales or promotions, according to the study.
Once customers opt for live help, they may have a choice of clicking to chat or clicking to call and speak with a sales representative.
Customers’ receptiveness to live help also may vary depending on how much they are spending, ATG found.
When customers make a purchase under $100, 47 percent prefer “click to call,” while 53 percent prefer “click to chat.” But when customers make a high-priced purchase or when product information gets complicated, 67 percent of consumers prefer “click to call” compared to 33 percent that prefer “click to chat.” This choice suggests that customers need to make sure sales representatives understand their questions and give them personal attention.
Since sales representatives handle two to three click-to-chat sessions at once, customers that prefer live chat use it when they can multitask while waiting for a chat response. Others prefer live chat because they think it’s faster and easier to ask a salesperson their questions.
July 13, 2010
CNBC
cnbc.com
Higher E-Commerce Sales May Be Only a Click Away
The abandoned shopping cart: it’s the bane of all online retailers.
As more shoppers use the Web to research prices before buying a product, retailers are offering “live help” tools in an effort to improve customer service online and spur sales.
The thought is that by adopting live help—a category that includes tools to enable customers to chat online or to call a salesperson directly—shoppers will buy more because any concerns they have about buying a product online will be addressed.
Currently, about 27.8 percent of retailers provide services where customers can click a link on the Web site to start a chat session, a Forrester survey said. But that number is expected to grow. By the end of this year, 26.5 percent more retailers will add “click-to-chat” capabilities on their Web sites, the research firm said.
Even fewer retail Web sites offer a live chat service where the salesperson initiates a conversation by popping up a chat box as the user browses the site. About 5.5 percent of retail sites already offer this service, while about 21.3 percent more plan to offer this type of live chat by the end of this year.
Hurdles to Adoption
Although the technology has existed for nearly a decade, retailers have been slow to add it to their sites because of several hurdles.
“(Live help) has been slow to get adoption,” said Sucharita Mulpuru, retail analyst at Forrester. “It’s an expense. It’s not just ‘plug in a button.’ It requires human resources and management and making sure the call center is trained. Frankly, it’s not a standard. It’s nice-to-have, but it’s not a must-have.”
Chico’s, a women’s clothing store, added live chat to their Web site in June 2009 but hasn’t opted for the “click to call” yet. The company wants to think through whether “click to call” is a service that provides a “value-added experience for consumers,” said Jason Acevedo, director of e-commerce at Chico’s.
Still, customers find Chico’s live help a useful tool, and it has increased sales. Acevedo said that 25 percent of Chico’s shoppers who use live chat transform from merely viewing items on the site into buyers.
Art Technology Group, an e-commerce software provider, also expects live help to drive sales. ATG’s research shows that 94 percent of U.S. consumers ranked “click to call” as “useful to extremely useful.”
Meanwhile, the ATG study showed 37 percent of U.S. consumers that found live help useful actually used “click to chat” before, while 21 percent of U.S. consumers that ranked live help as useful experienced a “click to call.” (For more on, which type of experience works best, click here.)
Converting shoppers into buyers is important for Web sites, especially among apparel retailers.
“Apparel is one of the most difficult products to convert online because it has really become a price observation,” said Marshal Cohen, market researcher. “You can’t tell quality and fit. The apparel industry has been the worst at taking the online experience and elevating conversion. More than half the population is not comfortable buying online.”
The ratio of purchases per visit across all retail segments is 14 percent to 28 percent, after adjusting for the multiple visits each customer may make before committing to a purchase, Cohen said. If visits to Web sites are tracked separately, the rate drops to about two percent, he said.
“There are a number of hesitations people have in making a purchase online,” said Diane Clarkson, e-commerce analyst at Forrester. “Typically, in retailing it’s shipping costs or simply people are looking around for different prices or not ready to buy yet. The reason why people aren’t completing transactions is because they’re missing information. Putting chat in front of customers is putting information in front of customers to help them complete a sale.”
Improving Customer Service
Live help also improves customer service. The average consumer finds customer service the most important factor in making a purchasing decision. Findings from the American Express Global Customer Service Barometer showed 61 percent of Americans said quality customer service is important and will spend nine percent more money with companies that provide excellent services than those who don’t.
August 6, 2010
CNBC
cnbc.com
Students Trim Budgets, but Won't Give Up Their iPhones
If you think of college students as impulsive, you may need to rethink your view, at least when it comes to making back-to-school purchases.
It seems, they are doing their homework. Faced with a limited back-to-school budget, college students are putting the bulk of their dollars toward must-have electronics items, even if that means scrimping in other areas.
“People are buying fewer items—buying a laptop but not a printer, an iPhone but not a digital camera, or people are looking for those electronics (items) to be on sale,” said Ellen Davis, vice president at industry trade group the National Retail Federation.
Total spending on back-to-school items by college students will exceed that of younger students by $12.42 billion, with electronics making up the largest portion of college students' expenditures, a National Retail Federation survey found. Total back-to-school spending by college students is only expected to rise slightly this year compared to last year from $616.13 to $618.12, the NRF said.
However, the average college student will spend about $30 less on back-to-school electronics items, including cell phones, MP3 players, and laptops, than last year.
Still, retailers should expect to see “pent up demand” for the latest electronics, but to get the most for their money students will start comparison-shopping early and easing their way back from an economic recession, Davis said.
Sticking to the Budget
Jeet Patel, a sophomore at St. John’s University in Queens, N.Y., started comparison-shopping for a cell phone in early July. After doing research, he and his family decided to order Sprint’s EVO, one of the newest touch screen smartphones this summer.
“I want to stay within the budget because my parents are paying for it,” Patel said.
For college students like Patel, buying the latest technology doesn't necessarily mean blowing their budget. More college students than high school students splurge on expensive electronics items and cut back in other areas such as spending on apparel.
“You can connect to the outside world, and you get more utility out of [an iPhone] over two years than spending $100 on a pair of jeans that could go out of style next year,” said Brian Sozzi, an analyst at Wall Street Strategies.
High-end electronics companies like Apple may have the upper hand over other retailers as college students invest in popular items like the iPhone or iPad.
“The consumer is willing to pay for popular products even if they are expensive,” said Van Baker, research vice president of Industries at Gartner, an information technology research company. “This is evidenced by Apple’s recent results, which were very strong.”
But discount stores such as BJ's Wholesale, Costco and Target, won’t experience a noticeable boost in sales as students spend selectively.
“For the past several months, BJ’s, Costco and Target generally have noted weaker than average trends in consumer electronics,” said Joe Feldman, senior retail analyst at Telsey Advisory Group.
In comparison, specialty retailers such as Best Buy are expected to increase sales by 1 percent comparing last year's second quarter to this year's second quarter ending in August, Feldman said.
“The big wrinkle is that the three main discounters, their product offering, is more commodity-oriented than Best Buy,” Feldman said. “Best Buy has a better offering that caters to a more upscale crowd. Just because trends have been weak at discounters doesn’t mean it’s weak at Best Buy.”
Fewer Discounts
During the third quarter in 2008, electronics sales increased 11.6 percent from the third quarter of 2007, the Census Bureau reported. In 2009, sales of electronics in the third quarter were only up 6.2 percent compared to the same period in 2008.
The downward sales trend will keep the increase this year in the “low-to-mid-single digit area” this fall, Feldman said.
Students also shouldn't expect big discounts on electronics such as laptops and netbooks this back-to-school season compared with last year, said Stephen Baker, vice president of Industry at NPD Group.
But laptops are a “must have” back-to-school item.
“Notebook sales tend to be a very specific back-to-school purchase,” said NPD Group’s Baker said. “Students need a laptop for college. It tends to be a product you can’t postpone buying.”
The trade off for less aggressive pricing on electronics is that more students are purchasing the lower-priced netbooks, which are smaller than a notebook, said Angela McIntyre, research director at Gartner, an information technology research company.
Apple’s iPad—which lends itself to competition with the netbook by sheer size—won’t be in high demand even though it’s a popular electronics item among students.
“The iPad pricing starts at about $200 more than most netbooks, which will dissuade college students on a tight budget from purchasing the iPad,” McIntyre said. “The iPad costs $499 and up, which is comparable to the price of a mainstream PC with a more powerful processor than is in the iPad.”
Even though companies such as Amazon.com provide cheaper prices and lighter versions of electronic readers like the Wi-Fi version of the Kindle, students are still hesitant to invest in them.
“The pricing of electronic versions of most e-Textbooks is high enough that there is no cost advantage over printed books, and students can’t refer back to e-Textbooks next year after the subscription expires,” McIntyre said.
Instead, laptops and smartphones will be among the top two important electronics purchases this back-to-school season for college students.
“When you think about what you need for school, laptops and smartphones remain a major piece of the puzzle for the teen and college kids,” Feldman said. “As that demand continues and with all the social networking, (laptops and smartphones) will remain a showing category.”