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Focus group research shows that Web sites are creating brand loyalty and taking business from print catalogs
Web sites have already established brand loyalty strong enough to siphon business away from printed catalogs and retail stores.
That’s the word from Laurie Windham, CEO of Cognitiative Inc., a San Francisco-based consulting firm that recently conducted focus groups on new shopping habits and the strengths and weaknesses of current online marketing practices.
The research shows that 20% of consumers and businesses are making fewer purchases from printed catalogs and shopping more online, Windham said during a seminar sponsored by the Northern California chapter of the Direct Marketing Association. About 13% of online shoppers are buying less from stores.
Catalogs are most vulnerable to losing sales to Web sites because consumers perceive the Web as a cheaper, more convenient shopping medium, she added.
Another advantage of Web sites over catalogs is that they can offer more products without significantly raising product overhead.
Windham said 50% of consumers surveyed expect Web sites to offer a larger selection of products than printed catalogs.
Some shopping sites already have brand loyalty, with 55% of the consumers surveyed saying they have loyalty to a site, Windham reported. Those with the highest loyalty tend to be the first companies to establish a presence on the Internet.
The research also found that customer loyalty is strongly influenced by the speed of downloading and the ease of navigation through the Web site. Ease of use is most important to 37% of online shoppers, familiarity to 36%, and content to 27%.
Brand loyalty is most easily damaged by old content. About 26% of the online customers surveyed in focus groups cited old content as a turnoff. Roughly one-fourth said they are dissatisfied most by slow response time. Another 22% pointed to Web site downtime as the biggest negative, and 16% said poor customer service bothers them most.
As a rule, customer service is so dismal online that when a company does provide good service, consumers are surprised and delighted and likely to become loyal customers, according to Windham.
The leading product categories for online shopping are travel services, books, computer software, gifts and music for consumers. On the business-to-business side, the largest online sales categories are computer software, books, computer hardware, office supplies and travel services.
According to Windham, apparel marketers face the greatest obstacles to succeeding in e-commerce because consumers are unable to try on products (a challenge long faced by catalog marketers). Another major concern for 19% of online shoppers is credit card security, she added.
Unsolicited e-mail has a more negative image than direct mail, and now ranks second only to outbound telemarketing as the most objectionable form of marketing to consumers. About 37% of focus group participants said they stop buying products from a company online if they start receiving unsolicited e-mail advertising from that firm.
Online banner advertising is probably the least effective direct response advertising format used on the Internet in terms of response generation, Windham continued. Flashing or otherwise animated banner ads generate hostility among online shoppers.
“People say they don’t like things that pop up on their screens or things flashing at them. There was almost a riot in a focus group when people started talking about it,” she said.
Perhaps the biggest mistake to make is exclusively using online media without integrating it with existing marketing channels to give consumers more choice.
Personalization strategies work best when consumers feel they – and not the marketers – are in control. “Consumers resent control,” said Windham. “When they’re on the Internet they want to control it.”
