From October 2007

Competition is forcing retailers to focus intensely on customer service, and the online channel is no exception. In this survey, online shoppers were asked to rate the importance of six services: a flexible return policy; free shipping; low prices; the ability to pick up or return merchandise at a store; “live” toll-free customer service; and website ease of use. Respondents were asked to rate each service on a scale from 1 (not at all important) to 5 (very important).

Low prices were considered to be most important, followed by free shipping, flexible returns, website ease of use, toll-free customer service and in-store pick-up/return. The survey tracked the way respondents in various demographic categories rated these services, and turned up some interesting differences based on age, gender and household income. Generally speaking, however, all of the services are more important to women than to men and to less affluent households than to those at the higher end of the income spectrum.

When it comes to differences among and between age groups, a natural inclination would be to look at the extremes – comparing the preferences of the youngest respondents with those in the 65-plus group. More interesting, perhaps, is the fact that the perceived importance of all six service areas appears to increase very early – between the first two age groups.

The reasoning appears to be that people in the 25 to 34 group are, for the most part, out of college, working and raising young families: They don’t have a lot of free time, they’re feeling over-stressed and they respond well to anything that will make things easier. They’re budget-conscious, too, but that appears to play a lesser role: the differential in a “very important” rating for low prices was significantly smaller than the one for free shipping, for example. Shipping, particularly shipping returns, is a hassle, and not having to pay for it makes it more appealing.

What does this mean for retailers and their online strategies? Let’s look at the way people shop. In another series of questions, respondents were asked how often they performed online product research before making an in-store purchase, and what kinds of products they researched. Nearly one-third of women (30.1 percent) research shoes online and one-quarter research electronics before buying in stores.

So if you’re trying to sell clothes or TVs to 30-year-old women and your site is confusing or hard to use, there is a barrier between you and your target market. If your site is hard to use and you don’t offer free shipping and have a flexible returns policy, that barrier might as well be battlements and a moat.

And remember: This is what people do online before making a purchase in a store, so your website could be hurting you in ways that would never show up in the online sales revenue figures.

Still, while operating multiple sales channels increases the opportunities to make mistakes, it also provides more opportunities to make it easy and desirable for online browsers to turn into online or in-store customers. Here’s a closer look at some of those opportunities.

	On a scale of 1 to 5, with 1 meaning "not at all important" and 5 meaning "very important," how important are the following services when shopping online?