Special Report: E-Commerce

Listen Up, Retailers

Five consumers talk about why they don't buy even more online

By MICHAEL TOTTY

Too often, the debate about e-commerce -- which companies will or won't make it, which ideas are brilliant or flawed -- leaves out the final arbiters: the consumers. Yet they are the ones who know best what works and doesn't work when it comes to shopping online.

So we decided to talk to them. With the help of The Wall Street Journal Online, we convened an online panel of readers last month to talk about their experiences shopping over the Internet -- what they like and what they don't, and what retailers can do to make shopping online easier, more enjoyable and cheaper.

The panelists are Beth Pearson, a marketing manager for Thompson Coburn, a law firm in St. Louis, Mo.; Chris Boyd, director of knowledge management for Flywheel Communications in San Francisco; David Schlosser, a writer in Austin, Texas; Michele Morgano, a senior marketing manager at Citigroup in New York; and Elizabeth Georges, an attorney in Washington, D.C. Here are excerpts from the discussion.

The Main Obstacles

The Wall Street Journal: Hello, everyone. Thanks for participating in this discussion on e-commerce and the that ways online retailers can improve their offerings to get you to buy more. Let's jump right in. Most of you shop, or have shopped, on the Internet. What keeps you from buying more online?

Ms. Pearson: It's just so hard to shop on so many of the sites. Either there are too many steps to get to the thing you want, or it takes forever for pages to load or you just can't ever find the information/product you're looking for. I think that if more Web masters thought of their sites more as stores and less as technology, they would find different ways of designing the "shopping experience."

WSJ: Can you give an example of a site that's particularly hard to navigate?

Ms. Pearson: I don't want to be mean, but I regularly buy from Seventh Generation -- great products with a "green" touch. I had been using the catalog and the 800 number, but they offered a discount for the first online order, so I decided to give it a try.

First, they had the toilet paper and paper towels under some heading that wasn't intuitive. It wasn't under bed and bath, for example. Then, when you found the item, you couldn't just order it. You had to click on the picture, wait for it to load, identify the size order you wanted (number of rolls etc.), then had to say you would check out, then wait for their secure transaction site to load, then fill in all the information, then wait. You get the idea.

It took me a half-hour to place an order than generally took less than five minutes to do by telephone. And, when I called in an order, they already had my address and other information, and I just had to confirm. I don't know why they couldn't have had that information online.

[Note: Ms. Pearson says she has returned since that first visit and that the site has improved -- although it's still slower than placing a phone order. Ms. Pearson buys Seventh Generation products through a site called Realgoods.com. The site was acquired in February, after Ms. Pearson's first experience, by Bloomfield, Colo.-based Gaiam Inc. William Brown, president of the Gaiam.com Web site, says the company has upgraded the site to make pages load faster and too make sure products are in user-friendly categories.]

Mr. Boyd: I agree with Beth -- poorly designed or malfunctioning Web sites are one of the top three reasons I don't shop more online. It's incredibly frustrating to walk through five of the steps required to buy a shirt online before the site tells you that it does not have in stock the size you requested. It's similarly maddening to have the site flake out right after you click the "Submit" button, leaving you to wonder whether the order was ever transmitted.

Another reason I don't shop more online is the hassle of returning stuff. Finding a box, closing it up, addressing it and lugging it to the post office is a pain, as is waiting and checking to make sure that your credit card gets credited. Returning something to a store is a lot easier. The most convenient setup is a retailer that has both a Web site and a store that accepts returns of items purchased on the Web site.

Finally, the last reason I don't shop more online is having to pay for shipping (sometimes both ways). Shipping charges usually wipe out any price advantage on low-cost products (e.g., books, CDs), although usually not on higher-end ones (e.g., computers and accessories).

Mr. Schlosser: Malfunctions are rampant -- there's nothing more frustrating than digging through several pages (a strategy, I'm convinced, that Web masters use to increase hits and improve their image) and finally finding the link you need to click to initiate the transaction…and nothing happens.

I haven't found returns to be a problem, primarily because I use Internet shopping for one of two reasons: 1) convenience of purchase of something I know I want (such as books or CDs at Amazon) or 2) cheaper price of something I found at a store (such as a watch at Ashford).

David Schlosser

[Regarding] software that suggests items you might like based on what you've already bought, I have to admit, I find it more interesting from an academic perspective than for the recommendations that sites like Amazon generate. I was amazed that Amazon one day recommended a very obscure science-fiction novel by a rather obscure author -- on the very day that I'd picked it up at a local bookstore. But I don't think I've ever bought something recommended to me -- though I have used the links to items purchased by people who also bought what I bought.

This morning's activity has prompted yet another rant about hard-to-use Web sites. Though not specific to shopping, it's a great example of how a little care and thought could enhance everyone's online lives and how the lack of it can send consumers around the bend.

I am currently changing the e-mail address I use to receive automated news updates. Fewer than 10% of the Web sites that I've visited allow users to simply change their e-mail addresses -- almost all sites require users to delete their e-mail addresses and, as a result, their profiles/ preferences, and start again from scratch with the new e-mail address.

Ms. Pearson: Back to the original question -- what sites could do to make me shop there more often. First, they have to let me know they have a product I might want/need. I remember when I first discovered alibris.com. It was wonderful. I was trying to find a couple of books that are out of print, and I came across their site in a library magazine. I felt like I'd struck gold! Then their site is easy to navigate, easy to search. I go back on a regular basis just to see what they've got.

Another site I use more frequently is No Nonsense stockings. They've made it incredibly easy to find and buy what I want, and they offer a frequent-purchaser gift. It's kind of the online equivalent of coupons. They also make it easy to see related products.

Mr. Boyd: Well-designed e-mail promotions frequently get me to shop more. Two sites come to mind: J Crew and BabyCenter.

J Crew promotes highly discounted clothes with pictures embedded in the e-mail that link directly to their site, and it's a snap to size and order something after that. I may not even be in the mood to shop, but if I see that a shirt that I've bought before and really like is now half-price, I'll definitely check out the site to see if there are any other colors I like.

BabyCenter wraps its sales promotions in highly topical and useful content directly relevant to your baby's age. For example, "Your baby's eight months old and starting to crawl, would you like to check out safety latches and gates?" A couple of clicks later, you're out $150, but all of your baby-proofing equipment is on its way. That's a very effective way to match their goods with your pain.

Ms. Morgano: I shop online only for pragmatic items now (vs. last year). I most recently bought a few boxes of contact lenses and an air conditioner.

Michele Morgano

The contact-lens site is great for what I need -- straightforward and quick to use. I found it by searching Google for the manufacturer I like (which is somewhat hard to find in the offline world). The company offers reasonable prices, and their delivery is quick. I've been back twice since my initial purchase. One thing they do is send me an e-mail every two or three months when they think I've run out of my supply and include a link to a personal reorder page. Even if I'm not ready to restock yet, I save the e-mail until I am because they've made it so easy. I don't save any other company's e-mails.

I also had a very good experience with the second company (air conditioner). It was easy to use, straightforward, and it allowed me to avoid the throngs of people bound for a nearby department store on a hot summer Saturday. It was more than worth the $20 in shipping to avoid a 20-minute drive each way to the store, and who knows how long waiting around for a salesperson to help me and my husband.

I generally skip the book, clothing and home sites because they're tough to browse, have terrible image quality and don't make sense economically (as others have said, there are few deals and they hit you with questionable shipping charges). They also don't allow me to get the item I want immediately. If I hear from a friend about how great "The New New Thing" by Michael Lewis is, I want it now. Not tomorrow, not in two or three days, not a week. And the fact is, I can get it down the street and read it on the train ride home that night.

The Cost of Shipping

WSJ: A couple of you have mentioned shipping charges as a problem. Is it that the extra charge, which you don't have to pay in a physical store, makes shopping online too expensive? Or is it that shipping charges are higher than you think they ought to be? Have any of you abandoned your shopping cart when you discovered how much shipping would add to the total cost?

Ms. Morgano: The extra shipping charge is too much if it outweighs whatever convenience I'm getting out of buying online. It's also too much if I don't think the item is worth the extra cost. I have definitely left shopping carts when I saw the shipping charge.

Some companies do seem to pad their shipping charges, or at a minimum they don't pass on cost savings they've negotiated with UPS, while other firms do.

Mr. Boyd: I agree with Michele on the cost vs. convenience trade-off for shipping charges, and I too have abandoned carts because of high charges. When I order items that have a significant probability of being returned, such as clothes, I also factor in the shipping charge to send items back.

I usually have no idea if the shipping charges are higher than they should be.

Shipping charges are obviously not an issue for services or information that I buy online, such as flights or WSJ.com. Yet another reason why those are particularly well-suited to e-commerce.

Beth Pearson

Ms. Pearson: To some extent, I find shipping charges annoying because I believe (rightly or wrongly) that Web-site prices should be cheaper than those I find in stores. After all, Web sites aren't maintaining retail stores, they don't have to pay for sales help, and they don't have to do a lot of cosmetic work on their "stores." I think that the prices should be at least as good as I can find during the sales locally, and to have to pay "retail" and to pay shipping on top of that makes me feel like I would if I paid the "dealer's recommended price" on a car -- like I got gypped!

Mr. Schlosser: I consider the shipping and handling to be exactly what someone described as a "convenience charge" -- I don't want to go into a book, gift or record store after I've spent an hour at the gym in the evening, I don't have time to go during the work day, and I don't want to hassle with the parking/crowds on my weekends. If it's something I can wait a few days to get, the USPS/UPS ground shipping is plenty cheap for me in comparison to the inconvenience of having to go to a retail store.

Also, since I live away from my family, I use the Internet to buy most holiday and birthday gifts -- so the shipping charge is one I'd have to pay anyway, except that someone else takes care of the packaging, and I don't have to wait in line at the USPS for an hour during lunch.

Ms. Georges: I do agree with Michele that if the shipping and handling price for an item is too high, I am going to abandon a shopping cart lickety-split. Although I do not necessarily agree that Web sites should price their merchandise to compensate for the shipping and handling. After all, catalogs often charge for shipping, and most of the time we barely notice it. (Though I have to admit it, I miss Kozmo.com -- anyone who can bring me a dozen Krispy Kreme doughnuts and a DVD of "Gladiator" in under an hour with no delivery charge is my best friend!)

Elizabeth Georges

There is one exception to all this: merchandise that you can't necessarily buy in a store near you, something that is particularly important if you have a specialty hobby or live outside a major metropolitan area. For example, I make jewelry, and my favorite wire is hard to find in the local supply stores. But I can buy it online, a fact that is worth the extra shipping charge and the occasional hassle when they screw up my order.

WSJ: Let's talk about what draws you to a site in the first place. What promotions do you find useful, and which do you find obnoxious? Or do you only shop when you're looking for a particular item?

Ms. Morgano: These days, I only shop online when I'm looking for something specific. I don't respond to general Web promotions anymore -- especially not those awful pop-ups. I'm not opposed to promo e-mails, but nine times out of 10 I don't purchase anything off of them. Their offers and/or merchandise aren't compelling.

WSJ: Are they e-mail promotions from sites that you've purchased from before? Why aren't they compelling?

Ms. Morgano: I've only stayed on the lists of companies that I've bought from before, either online or off.

Aside from the contact-lens company I mentioned earlier, the others are all clothing or gift companies. The images for the fashion sites are usually not very good (and therefore do not inspire a purchase), and if I want to buy something for myself I usually want it right away. The gift companies are at the mercy of my calendar, so they often don't catch me when I actually have a gift-giving need -- despite their efforts to sign me up for reminders. I also don't like to give someone a gift from the same place for subsequent occasions lest they think I am unoriginal and thoughtless.

I'm still curious to see when these companies will figure out how to target me better based on past purchases. The e-mails I get still don't seem to have me in mind.

Mr. Boyd: I like well-designed and accurately targeted e-mail promotions. The ones I respond to most often are those from vendors who've sold me things for my own use -- for example, the clothes and baby items I mentioned above.

I rarely purchase items from vendors where I've bought only gifts for others, since they tend to be one-time deals rather than regular repeat purchases. And I never respond to e-mails from vendors that I've never bought from before.

Ms. Pearson: I've actually taken myself off most of the e-mail lists I was on because the vendors never stopped sending messages. It was like they felt compelled to e-mail me almost daily, even though it was unlikely that I would be ready to purchase from them again. It made me feel like I had a neighbor in once for coffee only to discover that they planned to call me every hour from then on. It makes me really unwilling to be put on any e-mail list now. I'm sure that I've missed some interesting notifications because I don't want to be notified of everything. (The worst experience I've had with this was a ticket agency -- nameless -- that sent up to three different e-mails every day. They even continued for several days after I "unsubscribed." I don't plan to do business with them again.)

Ms. Georges: I usually don't respond to most ads unless they are targeted to me either, but the problem is that most of the targeting technology is pretty clunky.

If a site is using past purchase information, I'll wind up getting offers for baby clothes (because I bought a baby gift), and I have no children. The worst is when they try to use that information for offline promotion. It's annoying to get baby catalogs in the mail now all because of one online purchase!

Demographic targeting is even scarier. If I give out no more than my name and ZIP Code, suddenly a marketer will make all sorts of assumptions about my income, marital status, etc., that may or may not be accurate. It feels a little like an Orwell novel, and I don't like it.

Mr. Schlosser: I would like to believe and say that I only go online to buy when I'm looking for something specific -- and that I completely ignore e-mail promotions -- but I have to admit that I can't remember if I've violated that in the past. I generally delete e-mail promotions without reading them -- most come from apparel retailers, and my closet can't take any more of that.

Like other respondents, I've opted out of e-mail marketing whenever I can -- and I wish more online retailers would make it as easy as a "Reply with unsubscribe" e-mail -- too many make you visit the Web site and assure the Web site twice or three times that you're confident you are sure that you're absolutely positive you don't want any more spam (again, I suspect it's a way to run up site-hit statistics). Another strategy I adopted a while back was to establish a Web-based e-mail account where I know the only thing I'll get is a receipt for something I did buy, or spam from companies I don't care about.

Ms. Pearson: I think that retailers could get better information, allowing them to do more effective "data mining," if they gave some thought to asking for the information in exchange for something the buyer finds valuable. For example, in the case of the baby gift, if you had been offered free gift wrap, I'll bet you would have answered two to three questions like, "Is this a gift for your child or someone else's?" or "Do you think the recipient would enjoy getting our catalogs?"

I know that I would take the time to answer a few(!) questions for free shipping and handling or gift wrap or some other kind of benefit.

Advice for Web Sites

WSJ: Beth raises an issue that's good to close on. What things can online retailers do to make you want to shop more?

Ms. Pearson: I would check a Web site regularly if I knew that they had "sales" like the retail stores. I might shop more often online if I had a way of accessing multiple sites at once where I might, for example, put in some basic information like the ages/gender of the people I most often buy for and the categories of gifts I prefer. Then they could remind me when a gift date was approaching and suggest some gift ideas. I would also be more likely to shop online if shipping and handling were free, if I could easily get gift wrapping and cards to go with gifts and I could have the object shipped to the recipient. I would prefer to have the site keep my information so that I don't have to re-enter my name, address, e-mail and credit-card number every time I order something.

Actually, the one site I visit regularly is the Web site of a local grocer. I can shop online (it's not always easy, but I do it because I hate grocery shopping!), and they will deliver the groceries the next day during a two-hour time of my choice for $10. I probably spend as much time actually buying food online as I would in the store, but I don't have to drive to the store or push carts or load and unload my groceries into the car and house. To me that is $10 well spent.

Chris Boyd

Mr. Boyd: Aside from the basics (such as a fast well-designed site, on-time shipments, security/privacy), here are some things that could get me to shop more online:

-- Provide me with an incentive (such as discounts or free shipping) to have the store automatically ship me items that I buy at regular intervals (vitamins, contacts, bus passes, etc.). The benefits to me include never having to think about putting those items on my shopping list, never running out of them and getting a good deal. The benefits to the e-tailer are a locked-in customer that provides a predictable revenue stream and inventory demand.

-- Make it easier to return things that are likely to be returned (for example, by including an easy-to-use postage-prepaid return envelope).

-- Offer "frequent buyer" goodies, like frequent-flier miles for shoppers. There's a restaurant-reservation site called OpenTable that I use at least twice a month simply because they offer me "OpenTable points" that can be turned into discount coupons to use when paying for a meal. They're not worth very much, but just the fact that they offer them gives me an incentive to check to see if the restaurant I want to go to is on their list.

Mr. Schlosser: Since so much of the shopping I do online is for gifts, it would be nice if retail Web sites allowed me to set up accounts for other people, the same way it sets up an account for me. That way, Amazon could make individual suggestions for my teenage sister, my thirtysomething friends, my middle-aged parents and my mature grandparents, rather than assuming the items I buy for them reflect my personal tastes.

And, as one participant wisely responded, since so much of the other online shopping I do relates to specialized interests that local stores do not support (like fountain pens or model railroading), retail sites that do support such hobbies would earn my gratitude for sharing relevant, noncommercial information about those topics -- local events or trade shows, upcoming TV shows, affinity Web sites, etc. -- stuff that piques my interest but only abstractly relates to the actual purchase of something.

Ms. Morgano: Focus first on exceptional execution of the core customer experience. The specifics have mostly been mentioned already -- a fast, well-functioning Web site, prices that are comparable to those offline, shipping and handling charges that are in line with the convenience offered, quick processing/delivery, and helpful customer service.

After all of that is mastered, go ahead and experiment with bells and whistles like better targeting technology, virtual models, interactive components, etc.

-- Mr. Totty is a news editor for The Wall Street Journal Reports in San Francisco.

Write to Michael Totty at michael.totty@wsj.com