E-Commerce Sites Failing To Keep Customers

Top e-commerce sites are losing customers at an average rate of 60 percent every six weeks because they are concentrating on boosting profits instead of establishing loyalty, a new study claims. Likening e-commerce to an online version of a vending machine, the marketing firm Rubric Inc. found that only 16 percent of the 50 Web sites studied sent follow-up marketing offers to customers who had made purchases in the last 30 days. Of those 16 percent, only two of the responses were personalized and nearly half failed to ask the customers if they would like more information on related products services, the study found.

In conducting the study, Rubric asked 50 people to buy one item from 50 "leading" e-commerce sites. The company released the names of all 50 sites, but declined to link specific responses to specific companies.

One of the company’s clients, Outpost.com, was included in the study. The others included sites run by Amazon.com, CDNow, Etoys, Gap, Gateway, IBM, Lands End, Microsoft, Office Depot, Omaha Steaks, Playboy, Planet Rx, Sears, Staples, Starbucks, Wal-Mart, Victoria’s Secret and Sharper Image.

The study found that sites peddling books, music and videos performed poorly compared to emerging product categories like health and beauty. "This could be due to the fact that these e-commerce sites are both older and much larger than the newer sites, which may limit their ability to interact with customers on a one-to-one basis," Rubric researchers wrote.

Customers seeking information from the sites found it difficult for the most part to get replies to basic questions such as "Which model should I buy?" the study found. Forty percent of the researchers’ e-mail questions went unanswered, including sites that promised a time frame for a response.

Rubric also found examples of mistargeting. For example, a male customer received an offer about women’s clothing when he never indicated any interest in such a purchase.

"There’s still a lot of room for improvement," said Hal Steger,

Rubric’s vice president of marketing. "Everyone is talking about one-to-one marketing, but very few of these sites are doing it."

The company plans to do two follow-up studies over the next six months to see if e-commerce sites are re-marketing to customers over a longer period of time and to see how the sites do during the Christmas shopping season.