Backbone is about business, technology, lifestyle, innovation, bold ideas, trends and events
Exposing E-tailing‘s Failures | May 6, 2003
Peter Wolchak
Online retailing is not really prospering as it should. Yes, millions of dollars change hands electronically and there are a handful of really successful sites out there, but it has hardly been the business revolution we foresaw. There are two main reasons for this.
The first is the standard chestnut: security concerns stop consumers from using credit cards online. A study from Visa Canada puts numbers to this.
The survey of 1,500 Canadian consumers, conducted by Maritz: Thompson Lightstone in late November, found only 15 per cent of credit card holders with ’net access intended to purchase holiday gifts online.The most significant factor scaring them away was concern over security and fraud, cited by 25 per cent.
It has to be said that Visa Canada has a strong motive for playing the security/ fraud card. It recently launched Verified by Visa, a new online verification service. Cardholders register for the program and when they visit a Verified by Visa merchant site, purchase information is routed to the appropriate financial institution, the cardholder enters a password and related information, and his/her identity is authenticated. The transaction is approved and the Avril Lavigne CD is on its way.
Now, the fact that Visa Canada benefits from security concerns doesn’t negate the relevance of the issue, and we don’t question the survey results. What we do question is the very idea that online purchases are inherently insecure.
Any restaurant goer who hands a credit card to a waiter is engaging in a risky activity, and, in any case, the credit companies already protect buyers from fraud. Visa’s own Zero Liability policy means that if a card number is hacked out of some Web site Visa will pick up the tab, not the consumer.
The second e-tailing issue, however, is much more concrete. As detailed on page 14 of this issue, many e-commerce Web sites actually prevent people from spending money online.
At least 80 per cent of Canadian Web sites have serious usability problems, leaving customers stumbling through poorly designed sites trying to find something to buy. Once an item is located these customers are then likely to be thwarted by dysfunctional forms or unclear purchase instructions. Purolator Courier recently tackled its own usability problems. Not too long ago, a customer who hit purolator.ca was confronted by a long 11-step shipping process. Some of those pages would end with a Submit button on the bottom right, others sported a Process button on the left, and both performed the same function.
“We received a lot of complaints on how difficult it was to use,” said Steven Javor, Purolator e-business senior marketing manager in Mississauga, Ont. Purolator trimmed the process down to three steps and hired usability experts from Cossette Interactive to rework the design. “The redesign dramatically increased what we are able to do with e-commerce,” Javor said. The funny thing about usability is it’s a poorly understood concept. A lot of companies have yet to realize that a confusing site tends to reduce online sales. What’s not so funny is that Visa cardholders spent $772 million shopping online during the 2002 holiday season, a 103 per cent jump over the same period in 2001. Consider what that number could be if Canadian consumers and sellers managed to get their e-tailing act together.
When that happens, we might actually see that long-awaited business revolution.
Online retailing is not really prospering as it should. Yes, millions of dollars change hands electronically and there are a handful of really successful sites out there, but it has hardly been the business revolution we foresaw. There are two main reasons for this.
The first is the standard chestnut: security concerns stop consumers from using credit cards online. A study from Visa Canada puts numbers to this.
The survey of 1,500 Canadian consumers, conducted by Maritz: Thompson Lightstone in late November, found only 15 per cent of credit card holders with ’net access intended to purchase holiday gifts online.The most significant factor scaring them away was concern over security and fraud, cited by 25 per cent.
It has to be said that Visa Canada has a strong motive for playing the security/ fraud card. It recently launched Verified by Visa, a new online verification service. Cardholders register for the program and when they visit a Verified by Visa merchant site, purchase information is routed to the appropriate financial institution, the cardholder enters a password and related information, and his/her identity is authenticated. The transaction is approved and the Avril Lavigne CD is on its way.
Now, the fact that Visa Canada benefits from security concerns doesn’t negate the relevance of the issue, and we don’t question the survey results. What we do question is the very idea that online purchases are inherently insecure.
Any restaurant goer who hands a credit card to a waiter is engaging in a risky activity, and, in any case, the credit companies already protect buyers from fraud. Visa’s own Zero Liability policy means that if a card number is hacked out of some Web site Visa will pick up the tab, not the consumer.
The second e-tailing issue, however, is much more concrete. As detailed on page 14 of this issue, many e-commerce Web sites actually prevent people from spending money online.
At least 80 per cent of Canadian Web sites have serious usability problems, leaving customers stumbling through poorly designed sites trying to find something to buy. Once an item is located these customers are then likely to be thwarted by dysfunctional forms or unclear purchase instructions. Purolator Courier recently tackled its own usability problems. Not too long ago, a customer who hit purolator.ca was confronted by a long 11-step shipping process. Some of those pages would end with a Submit button on the bottom right, others sported a Process button on the left, and both performed the same function.
“We received a lot of complaints on how difficult it was to use,” said Steven Javor, Purolator e-business senior marketing manager in Mississauga, Ont. Purolator trimmed the process down to three steps and hired usability experts from Cossette Interactive to rework the design. “The redesign dramatically increased what we are able to do with e-commerce,” Javor said. The funny thing about usability is it’s a poorly understood concept. A lot of companies have yet to realize that a confusing site tends to reduce online sales. What’s not so funny is that Visa cardholders spent $772 million shopping online during the 2002 holiday season, a 103 per cent jump over the same period in 2001. Consider what that number could be if Canadian consumers and sellers managed to get their e-tailing act together.
When that happens, we might actually see that long-awaited business revolution.
