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Net Prophet - by Dylan Tweney

November 9, 1998

Online retailers: You can't compete on customer service

I used to think the Net needed a Nordstrom. Now I'm not so sure.

As anyone who has used the Internet to purchase retail items knows, customer service is poor, if not nonexistent, on the majority of commerce sites.

Let me illustrate: A friend of mine recently tried to buy a computer for her parents from Gateway's Web site. She was initially pleased with the many configuration options available through Gateway's slick order form. But after she had placed her order, there was no confirmation about the total price or the expected delivery date, and she found no way to get this critical information from the site.

Concerned, she called Gateway. But she ran into a scenario that's all too common among companies just starting out in Internet commerce: The ordinary phone service representatives couldn't help her with her Internet orders. Instead, she had to speak with a special Internet order division.

After she finally got connected to the right person, the harried representative told her that systems requested through the Internet were on backorder for three weeks and that she'd be better off canceling her order, then placing a new one the traditional way: by phone.

Contrast that to a high-touch retail operation such as Nordstrom, where solicitous salespeople stand by ready to render immediate, personalized assistance on any issue, and it seems like the Web has a long way to go. Wouldn't it be nice if some I-commerce site offered Nordstrom-style customer service?

Maybe not. Where the Web really shines is in giving customers a way to shop quickly and efficiently. Granted, not every site meets that ideal, as my friend discovered. But usually, by shopping online, I can zero in on the products that interest me, make comparisons based on price and other criteria, and make my purchase quickly and privately -- thus saving myself another agonizing trip to the mall.

On the other hand, when I want personal service, I go to a bricks-and-mortar store that I know delivers that service.

The Web just isn't set up to deliver one-on-one service, and -- despite several technology companies' efforts to change this -- it probably never will be.

One-on-one service on the Web is simply missing the point. Retail companies use the Web to reduce their per-customer costs. One way they do this is to eliminate the need to pay salespeople to give personal attention to each customer.

There have long been brick-and-mortar stores that use this strategy. For example, Fry's, an electronics superstore chain in Silicon Valley, is famous for its terrible service; on the other hand, its prices are low, so customers continue to flock there. Fry's has lowered its overhead by skimping on customer service, which enables it to undercut its competitors' prices.

Web stores can do Fry's one better by using computer programs to provide customers with information tailored to their needs -- and the Web stores can do this far more cheaply than a sales representative could, either online or offline.

In other words, Web stores are not competing with Nordstrom. If they try to, they will fail, because personal service will always be better in person than over the Net. Instead, I-commerce entrepreneurs should compete where they can best succeed: on price, convenience, and automation.

Dylan Tweney (dylan@infoworld.com) has been covering the Internet since 1993. He edits InfoWorld's intranet and Internet-commerce product reviews.

Previous columns by Dylan Tweney

Network necessities for next-generation I-commerce: It's more than just bandwidth
November 2, 1998

Electronic commerce has come a long way in the past 20 years.
October 26, 1998

Everyone's making up markup languages for fun and profit
October 19, 1998

Commerce-enabled Web sites will lead a business revolution
October 12, 1998

Every column since August, 1997

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Copyright © 1999 InfoWorld Media Group Inc.

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