Ecommerce In India - Building Trust

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Having led the eCommerce team at Sears Holdings Corp, I often reflect upon what helped us grow our online revenues from about $20 million in 1999 to almost $1 Billion in 2006? Although I do think that technology played a key role in that growth, it wasn't the primary reason.
An incident during one of the Christmas seasons helped me answer this question.
Christmas is the peak season in US for all retailers and majority of the online and B&M sales occur during this time frame.
This is the time when kids hope that Santa will deliver all the toys that they wished for.
The stakes are too high because one delayed shipment could mean a disappointed child who has been waiting for that toy for the entire year.
So to set appropriate expectations, we added messaging on all our product pages telling the customers to place their orders before the cut off date to ensure Christmas delivery.
However, few days before the Christmas Eve, our dashboards indicated that we would miss the Christmas shipment for about 300+ toy orders.
We immediately formed a SWAT team and ensured that every single order was handled in a white glove fashion and shipped via overnight delivery.
The team worked through the weekend to make this happen, and we certainly lost money on these orders.
However we gained something really important - the trust of our customers.
This leads me to what I think is the most important factor that is necessary in growing eCommerce in India - Trust.
If we look at the Indian context, I feel that there is a general lack of trust between retailers and customers.
Consumers don't trust the retailers because they feel that they are either being over charged or that they wouldn't be able to get appropriate level of customer service once the sale is complete.
Retailers don't trust the customers because they feel that the customers will take every opportunity to misuse the return or exchange policies.
It is my opinion that this general lack of trust is the primary barrier that is impeding the growth of eCommerce within India.
Here are some of the practical techniques that online retailers can employ to improve this level of trust and build an environment where customers feel safe in clicking that "Proceed to Checkout" button.
1.
Customer Reviews
Today's customers are putting less trust on website marketing messages and becoming more influenced by recommendations from other people.
Customer's trust for an online retailer will increase if the retailer offers an ability to let customers share their positive as well as negative reviews about products or vendors.
The key is to not "moderate" the negative reviews because by allowing customers to post negative reviews, it will actually enhance the credibility of the retailer as well as other reviews.
Obviously, any foul language needs to be moderated but any genuine issues with the products or vendors must be posted along with the positive reviews.
2.
Clear shipping and delivery commitment
At the time of setting up products for sale, clear shipping and handling time must be associated with the product.
This information should be displayed consistently on all product pages so that customer's expectations around shipping timeline can be clearly set.
3.
Analytics & Personalization
Although personalized product recommendations and content do not directly increase customer's trust, they do demonstrate to the customer that the online retailer is making a good effort in understanding the customer's individual needs and is acting upon them.
This implicitly improves the comfort level that the retailer is not just looking to sell products but is making an honest attempt in building relationship with the customer.
4.
Operational Reporting & Dashboards
Online retailers must invest in strong operational reports that provide alerts and metrics on orders that have a risk of missing the service level that was promised to the customers.
If you have recently implemented an eCommerce platform, chances are that at times orders will get "stuck" in various states.
Therefore, it is important to establish thresholds around how long should orders stay in various states (such as "Processing for Payment", "Preparing for Shipment" etc.
) and then build automated alerts when orders exceed these thresholds.
5.
Vendor Penalties
In the Indian context, majority of the eCommerce sites work in a "drop-ship" model.
This implies that the online retailer doesn't physically stock the goods, and instead relies on external vendors to directly ship the merchandise to customer's home.
In this case, it is extremely critical to set clear SLAs on how long will it take the vendors to ship the orders.
There should be financial penalties built into the contracts if the vendors miss the service levels.
Also, there should be penalties if the vendors receive excessive negative reviews from customers.
6.
Price Match Guarantee
A Price Match Guarantee (PMG) is a store policy which entitles a customer to a refund of the difference between the store's asking price and a competitor's price.
It can not only help build trust with the customer, it can also help reduce price competition across online retailers.
This may sound counter intuitive but it is one of the most discussed examples in "Game Theory" and it has actually helped retailers in US to avoid direct price wars.
Take for example a firm like Circuit City that has a price match guarantee, which looks good to a consumer.
But that guarantee really allows Circuit City to charge higher prices since competitors will be discouraged from setting a lower price that Circuit City only will match when it must.
7.
Well trained call center
I recently called Airtel customer service to add Blackberry service to my cell phone.
There was an issue with their automated messaging system that was directing me to a wrong group within Airtel.
After calling 9 times, I gave up because every agent that I spoke to had the same scripted response that I should call back again and press option 2.
The point I am making is that although it is important to train the call center agents around specific customer service issues, what is even more important is that the call center agents be trained to have good problem solving skills, and they should be empowered to own the problem resolution from end to end.
8.
Fraud Protection
Not only should an online retailer ensure that the appropriate security certificates are setup to handle checkout related transactions, the sensitive customer and payment information should be stored in an encrypted format.
The messaging on the site should clearly indicate that the checkout process is completely secure.
In addition, there are third party Fraud detection services available that help flag potentially fraudulent transaction based upon credit card usage velocity and other parameters.
These services would not only help reduce the credit card charge-backs for the retailers, but will also improve the sense of security and trust with customers.
9.
Proactive, timely communication
Are we there yet? If you have gone on a long drive with kids, chances are that you have been asked this question.
It is human nature to expect timely communication, especially when they are waiting for something that they have already paid for.
The retailers should ensure that every single status update on the order generates an alert for the customer.
Also, if the order waits in a specific state for a timeframe longer than what was promised to the customer, an email should be automatically sent to the customers to make them aware of the delay.
If the delay is longer than a few days, customer should be contacted via phone and asked for approval for the delay or given an option to cancel the order.
10.
Charge only after order shipment
Customers feel much more comfortable if they know that they will only get charged once the order ships.
Currently, a lot of retailers charge the customer's credit card immediately when customer places the order.
However, they should consider authorizing the amount at the time of order and only charge the card once the order ships.
This will also minimize any need to refund the amount back to the customer in case the order needs to be cancelled for any reason.
11.
Self Service Capabilities
The more online self service capabilities (e.
g.
order cancellation, modifications) retailers can provide to the customers, it will not only help reduce the call center expense, but will also build more confidence with the customers.
Customers will feel more in control because they wouldn't have to spend 10 minutes with a call center agent to explain the issue - instead, they can directly resolve the issue online.
12.
Real time inventory updates & safety stock
Retailers must invest in building automated capabilities that keep an up to date record of how much inventory is available for all their products.
Products must immediately become unavailable for purchase from the site as soon as the inventory reaches below the safety stock.
Canceling customer orders due to lack of inventory is a situation that all retailers must avoid because this not only frustrates the customers, it drops their confidence in the retailer's ability to keep their promise.
eCommerce will see a significant growth in India.
However, the chasm between the early adopters of eCommerce and the ones who are waiting can only be crossed by building a strong level of trust with our customers - and winning them, one customer at a time.
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