Say what you will about Jeff Bezos, president of Amazon.com, but he is a savvy guy. He and his company may not be worth the gazillions of dollars that the market is throwing at them, but he deserves credit for making the market believe in him.
He has done that by making millions of people around the world believe in him and his company. And that, my friends, is a — if not the — secret of success in the network economy.
Last week, it was reported that Amazon had taken money from book publishers for endorsements on its Web pages. For a healthy $10,000, a book received prominent display on Amazon pages, an author profile or interview and an editorial review.
Amazon lost no time in responding. First, Bezos stridently denied that favorable reviews can be bought. Spokespersons also noted that dirt-world bookstores and other retailers sell their prime shelf space.
Most importantly, however, the company immediately offered refunds for all books it recommended and promised to tell customers whenever a publisher paid for positioning.
Put the customer first: What a concept!
Forgive the irony, but it is hard to resist since the obvious does not seem to have made much of an impression on many Net retailers. If you are going to set up shop in cyberspace, you have to man the stores.
The stakes are pretty big. The U.S. government estimates that U.S. shoppers dropped $32 billion online in 1998 and expects the total to reach $68 billion in ’99. By one estimate $8.2 billion was spent on online Christmas shopping last year, although others put the total between $2 billion and $4 billion. The U.S Commerce Dept. figures that 39 percent of U.S. retailers have already established a presence in cyberspace. Even in Japan, which has been slow to embrace ecommerce, the Japan Development Bank estimates that business to consumer sales generated $695 million in 1997.
Optimists forecast $100 billion in Web commerce worldwide by 2000; even the more realistic predictions foresee a virtual economy that does a million dollars of business per minute by 2002. Given those numbers, you’d think that management would get serious about customer satisfaction. That’s what you get for thinking.
I’ve been forced on countless occasions to e-mail companies two and three times to get them to respond to my questions, and I’m not growing frustrated alone. Jupiter Communications, a research firm, reported that 42 percent of top Web sites took longer than five days to respond to customer e-mail inquiries. Another one of their surveys reported 74 percent customer satisfaction from Net shopping; that is a 14 percent drop from last year.
A new study of ecommerce by Cheskin Research and Studio Archetype/Sapient argues that the success of the Internet “will largely depend on gaining and maintaining the trust of visitors. … The concept of trust is crucial because it effects a number of factors essential to online transactions, including security and privacy. Without trust, development of ecommerce cannot reach its potential.”
That makes perfect sense. No one is going to give vital personal information, such as credit card numbers, over the Internet if they don’t trust the folks at the other end. (Although people are willing to do so over the phone with nary a pause. Curious … ) Even if you trust the people receiving the data, you hope they can keep it secure.
Then there is the question of getting the goods: Cyveillance, an Internet watchdog company, surveyed 150,000 Web sites and discovered that 10 to 20 percent of luxury goods sites on the Net — and there are probably 20,000 to 25,000 in total — are selling counterfeits.
So, the trick is figuring out how to build trust. It’s more complicated than you might think. The eCommerce Trust Study by Cheskin Research and Studio Archetype/Sapient concludes that six elements are fundamental to communicate trustworthiness. They are: brand, navigation, fulfillment (how orders will be processed and the guarantees that come with them), presentation, up-to-date technology and the logos of security guaranteeing forms.
Some seem pretty straightforward: Brand recognition and security guarantees, for example, are vital. People trust what they know, and will take even more relief from the familiar when venturing into the unknown.
Interestingly, the study notes that “brand attributes increasingly matter more than the medium in which they are established.” Just because a company is a top dog in the real world, doesn’t mean that it will have the same popularity or success in cyberspace. Conversely, Amazon’s success could be translated into the real world, if it chose to open traditional retail stores.
The really interesting part of the study is the idea that navigation is “key” to ecommerce trust.
Navigation is defined as the ability to find what a customer is looking for on a Web site. If people can’t find what they want or if a site is amateur-looking or uses old technology, customers are not going to feel comfortable shopping there. In the real world, a clean, well-lit place bespeaks an attention to detail and that is what customers appreciate. The same is true in cyberspace. Your home page is your storefront, your most important form of communication with your customers. You don’t have a smiling salesperson to convey your enthusiasm, honesty or commitment. All you have is a Web page and a slapdash site says you just don’t care. In short, the design of a Web site is critical.
Finally, the eCommerce study says Web businesses should address customer concerns directly. Clearly state policies on encryption and security, ask only for necessary information, give customers guarantees and provide communication. Gee, that sounds like all the things Amazon is doing. Success is so simple.
Now go out there and make your millions.