TECHNOLOGY TODAY: Online Shopping Is Soaring, But Buyers Must Be On Guard
Electronic commerce, or e-commerce, is becoming more and more mainstream for more and more people. Ordering products online for many consumers is just another way of shopping.
Anyone who has shopped online knows the benefits of being able to quickly locate hard-to-find items, comparison shop with relative ease, read user reviews of products and services and place orders without having to get up from your chair
E-commerce took off in 1995, about a year after the World Wide Web took off, with Amazon.com and eBay both launching that year (eBay at first was named AuctionWeb). The dot-com bust hit five years later, but since then online business has not only recovered but soared.
To almost every upside, though, there’s a downside. With online shopping, you need to beware of scams and foul-ups as online businesses and entrepreneurs eager to cash in do so ill-prepared or with bad motives.
The incidence of outright fraud appears to be low. More common problems are featured products being unavailable, late deliveries, high shipping charges and orders never arriving.
The key issue is trust. One way to determine how much to trust any given online merchant is through consumer surveys. Market research firm ForeSee Results (www.foreseeresults.com) just came out with its latest customer satisfaction survey of the top 100 online retailers in terms of sales volume. Its customer satisfaction scores were based on merchandise, price, website site functionality, and website content.
The most interesting findings include:
- Netflix (www.netflix.com), which rents DVDs by mail and streams movies and TV shows over the Internet, led the top “e-retailers” for the fourth year in a row. It had a score of 87 on a 100-point scale, up two points from last year.
- Amazon.com (www.amazon.com), which started out as an online bookseller and now sells merchandise from automotive parts to watches, was a single point behind at 86, in second place, for the second year running.
- Tied for third were Apple (www.apple.com), a computer and consumer electronics company, and Avon (www.avon.com), a cosmetics and perfume multilevel marketing company, at 83.
- The three companies tied for last place with scores of 71 were Build.com (www.build.com), a home-improvement center; Efollett.com (www.efollett.com), a network of college bookstores; and YOOX (www.yoox.com), an Italian retailer of designer clothing and accessories.
- The two companies that improved the most from last year were Market America (www.marketamerica.com), a portal to hundreds of online shopping sites, which jumped 12 points to 75, and Etronics.com (www.etronics.com), an outlet for closeout merchandise and overstock inventory, up 10 points to 73.
- Other well-known brands include L.L. Bean (www.llbean.com), a clothing and outdoor equipment company, tied for 7th place at 82; Walmart (www.walmart.com), a discount mass merchant, tied for 16th place at 80; Sears, a mass merchant, tied for 76th place at 75; and Nutrisystem (www.nutrisystem.com), a diet products company, tied for 86th place at 74.
- Among computer and consumer electronics sites, along with Apple, two other top performers were TigerDirect (www.tigerdirect.com) at 81 and Best Buy (www.bestbuy.com) at 80. The worst performers were PC Mall (www.pcmall.com) and Etronics at 73.
Surveys like these aren’t foolproof, providing as they do a general measure of consumers’ past experience. This can shed light on your own likely future experience though it can’t guarantee it.
Further, many consumers experience positive shopping experiences at online sites other than the largest. But the smaller and less well-known the site, the more watchful you have to be for fly-by-night operators.
Among the most commonly repeated pieces of advice is whenever possible to pay by credit card and to avoid paying through cash transfer services such as Western Union. With the former, credit card companies typically protect you in the event of fraud. With the latter, you have relatively little recourse.
Online auction sites, not studied by ForeSee Results in this latest survey, present their own challenges. Through eBay wasn’t included this year, in another study last year its score fell three points, from 81 to 78.
With eBay, one common sense piece of advice is to avoid sellers you don’t know or who haven’t been recommended to you by a reliable source, particularly with anything that can be counterfeited.
As with nearly everything else about the Internet, online shopping isn’t risk- free. But this shouldn’t stop you from benefiting from it.
Just remember to keep your eyes open. And sometimes you have to rely on old-fashioned common sense: If a deal seems too good to be true, it probably is.