San Francisco, CA, September 27, 2006--The results of a newly released consumer survey commissioned by TeaLeaf and conducted by Harris Interactive suggest that online transaction failures can wreak havoc on Ebusiness, forcing 40% of online consumers to abandon transactions entirely (7%) or turn to competitors (32%).
The second annual study, which focused on US consumer transaction experiences on shopping, banking, travel and insurance websites, found that about nine in ten (88%) online consumers experienced problems when transacting online, potentially impacting an estimated 4.5% of all online consumer transactions2.
Forrester Research projects consumer ecommerce spending of $201 Billion in 2006. With consumer online sales growing at a projected 14% compound annual growth rate (CAGR), the 4.5% of consumer transactions impacted equals $60 Billion that could be at risk through 2010. ("US eCommerce: 2005 to 2010", Forrester Research, Inc., September 2005).
The survey also revealed that, while online adults are substantially more likely to have conducted a shopping transaction this year compared to last year (66% 2006 vs. 62% 2005), customers are increasingly unwilling to tolerate lower levels of service online, with 85% of adults expecting service levels online to be the same as offline, compared to 82% in 2005.
Hundreds of respondents submitted vignettes of bad online experiences, most concerning failed, inaccurate or incomplete transactions, endless "loops" in a business process or inability to simply checkout at retail sites. Collected examples include:
Banking: "I have been repeatedly unsuccessful at redeeming [bank name] points. It goes into a loop that gets me nowhere. My inclination is to call customer service, redeem my points and cancel my card with them."
Insurance: "[I] paid an insurance payment online through their website and it didn't go through. I ended up paying a late fee because of it."
Shopping: "I had gotten all the way to the end of the transaction (name, address, item selection, shipping method chosen, credit card information provided) and had the website malfunction and lose all of the previously entered data. I was furious and went elsewhere to purchase the same thing. I have not been back since."
Travel: "Buying airline tickets online − I went through the entire process and then got an error message. I didn't know if my credit card went through, whether I booked the flight. It was very annoying. I called customer service and also received bad service."
Transaction failures on a company's website create such a bad impression in the eyes of consumers that just one troublesome issue can cause irreparable harm to a company's brand. An astounding 91% of online consumers who experienced any type of problem when conducting an online transaction said they are at least somewhat likely to question the ability of a company to keep their private data secure if they encounter an online issue. Since website security (26%) and ease of completing a transaction (22%) are the top two factors contributing to a positive customer experience when conducting an online transaction, any type of problem or issue has the potential to negatively impact the trusted relationship between the consumer and the website, with severe implications for the brand.
Among other revealing findings, the survey also showed that about one in three online consumers (32%) would abandon a transaction at a website and immediately turn to an online (27%) or offline (12%) competitor. When combined with those who would simply abandon the transaction entirely (7%) − not buying at all − the percentage rises to 40% of all online consumers.
This intolerance of failure is another indicator of the risks to brand and customer loyalty that poorly delivering ecommerce sites present.
