labels: marketing - general, e-business, it news
Online satisfaction equals frequent purchasenews
By Preeti Desai
14 March 2006

Repeat visitors and customers are important in the e-commerce arena and one of the keys in the competitive market place is effective customer management.

There's no doubt that interest in online shopping is growing by the day because of the value proposition it offers to a customer such as convenience, 24x7 shopping , doorstop delivery, etc . The opportunities of the medium to businesses include advertising space to strengthen brand equity coupled with lower infrastructure costs, unlimited shelf space, a global audience that can be catered to without the restrictions of time zones and working hours for businesses that can sell anything from books to jewellery, airline tickets to magazine subscriptions, etc.

A consumer satisfaction study helps develop a true measure of retailer equity i.e. independent of sales channels, which help dwell further on the insights of the "why" behind the buying decision. This helps in evaluating strengths and weaknesses and takes advantage of opportunities while minimising risks and maximising ROI .For any retailer it is imperative in gauging the success or failure of the e-commerce arm of the business, primarily the analysis of the consumer's satisfaction against his offering, which begs the question, "Are customers satisfied with what they're getting?"

India's internet population currently stands at 38.5 million, a 54-per cent jump from the previous year, which will further rocket India's 'e-commerce economy', which currently stands at Rs1,180 crore for 2005-06. In terms of satisfaction of online offerings, the answer to the question: "are Customers satisfied with that they're getting?" is quite clear. From their response, customers seem quite satisfied with their online shopping experience.

A survey by the Internet & Mobile Association of India (IAMAI) and Cross Tab of internet users and their shopping habits found that 80 per cent of respondents were either very satisfied (18 per cent) and satisfied (62 per cent) with the online shopping experience. This indicates a growing professionalism on the part of online sellers and an increasing degree of comfort with the medium among the buyers.

This quantum leap of internet users from 25 million to 38.5 million also puts the onus on e-commerce Providers to ensure that they continue to deliver these satisfaction levels whilst at the same time maintaining and managing 'scale' in terms of an increased user population and managing the demand that would arise from the same..

Satisfaction levels among online shoppers
(At population of 25 million, Source: The Power Shopper)

Base: 1,493 respondents

Only a few shoppers (3 per cent) said they were dissatisfied. Seventeen percent said they were neither satisfied nor dissatisfied. With some persuasion and a little improvement, these buyers can easily be brought into the `satisfied' or `highly satisfied' categories. Companies with an e-commerce arm should be determined not only to sustain the high satisfaction levels but also ensure that this 17 per cent of Neither Satisfied nor Dissatisfied does not rise but are converted into the Highly Satisfied and Satisfied demographic.

Another way in which satisfaction can be measured is the frequency with which people purchase online. The fact that 26 per cent of respondents have shopped online at least five times and 27 per cent more than 10 times indicates a growing confidence in and acceptance of the internet as a shopping medium.

How often have you shopped online?

Base: 1,716*

By Age

Base: 1,493*
*87 per cent (1493) have shopped more than once and termed as regular shoppers

With time and usage more and more users get comfortable and confident with the internet these numbers are bound to increase positively. The advantage online marketers have is that they can make full use of the interactivity of the medium and use cost efficient viral marketing tools to take advantage of these high satisfaction levels . Another survey conducted by the IAMAI reveals that 93 per cent of online shoppers recommend online shopping products and services.

Base 1493.

High levels of satisfaction have a direct co relation with frequency of usage. Repeat visitors and customers are important in the e-commerce arena and one of the keys in the competitive market place is effective customer management .Companies with an e-commerce offering should invest efforts in terms of having a continuous measurement strategy that can signal and help avoid potential dips and which also allows valuable resources to be allocated to increase their strategic advantage over their competitors.

*The author is president, Internet and Mobile Association of India.

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Online satisfaction equals frequent purchase