E-commerce Dog Has Its Day

An apocryphal tale told by Internet sceptics sometime late in the last century held that UK catalogue retailer Argos, in its first year online, sold only eleven items. Now the Argos Web site has been ranked Number One in Europe in a study by Forrester Research, which more generally gives catalogue retailers credit for leading the way online.

The report ranks more than 50 of Europe's high-traffic transactional Web sites, and concludes that 'customer advocacy' is the common thread running through the biggest success stories. Forrester rates the sites in terms of online user experience and points to marked differences between the top 10 and those ranked 11 to 20.

Catalogue retailers 'set the tone for multichannel excellence' - as opposed to providing a flat user experience - ironically, it is Web sites that are described as mere online 'catalogues' or brochures which let down the big companies behind them. Meanwhile years of experience in distance-selling gives the off-line catalogue companies a head start in understanding the dynamics and possibilities of the new medium. At the top of the heap, Argos provides a range of multichannel services, such as store stock availability online, in-store returns of Net purchases, and home pickup of returns at no extra cost.

Online grocers, on the other hand, are more likely to be struggling with 'rock-bottom margins and demand', according to Forrester. Tesco.com is the only profitable online grocer in Europe, but ranks low in the table because of its disruptive product range expansion - shoppers have one basket and checkout process for groceries, and another for devices, according to the report.

Forrester Analyst Hellen K. Omwando believes that the best retailers know how to introduce innovations such as new technologies or new ranges, without compromising the customer experience. 'German catalog retailer Otto expanded into categories like toys and travel while maintaining its high service levels: it allows users to pick any time within a 12-hour period for delivery, receive SMS alerts from the nearest delivery drop-off point, and enjoy 24-hour customer service.

'Argos managed to shift 7 percent of its customers to use in-store kiosks through iterations of the user interface. Also, leaders that operate multiple channels treat all their channels as one outlet - they share one view of their customer between departments, showing everyone all activities and sales for every touchpoint. Argos is able to let its customers return online purchases to the store because its sales clerks can call up customer and product information across channels in real time.

'Leaders continue to move beyond department-focused business processes. Most have a common marketing department that collaborates with the merchandising department to launch campaigns across channels - as Wehkamp does. They also have common assortment and pricing schemes that drives cross-channel consistency -- one of Tesco.com's strengths'.

Forrester's Web site can be found at www.forrester.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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