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Higher E-Commerce Sales May Be Only a Click Away

The abandoned shopping cart: it’s the bane of all online retailers.

As more shoppers use the Web to research prices before buying a product, retailers are offering "live help" tools in an effort to improve customer service online and spur sales.

Chico's Live Chat
Source: Chicos.com
Chico's Live Chat

The thought is that by adopting live help—a category that includes tools to enable customers to chat online or to call a salesperson directly—shoppers will buy more because any concerns they have about buying a product online will be addressed.

Currently, about 27.8 percent of retailers provide services where customers can click a link on the Web site to start a chat session, a Forrester survey said. But that number is expected to grow. By the end of this year, 26.5 percent more retailers will add "click-to-chat" capabilities on their Web sites, the research firm said.

Even fewer retail Web sites offer a live chat service where the salesperson initiates a conversation by popping up a chat box as the user browses the site. About 5.5 percent of retail sites already offer this service, while about 21.3 percent more plan to offer this type of live chat by the end of this year.

Hurdles to Adoption

Although the technology has existed for nearly a decade, retailers have been slow to add it to their sites because of several hurdles.

“(Live help) has been slow to get adoption,” said Sucharita Mulpuru, retail analyst at Forrester. “It’s an expense. It’s not just ‘plug in a button.’ It requires human resources and management and making sure the call center is trained. Frankly, it’s not a standard. It’s nice-to-have, but it’s not a must-have.”

Chico’s, a women’s clothing store, added live chat to their Web site in June 2009 but hasn’t opted for the "click to call" yet. The company wants to think through whether "click to call" is a service that provides a “value-added experience for consumers,” said Jason Acevedo, director of e-commerce at Chico’s.

Still, customers find Chico’s live help a useful tool, and it has increased sales. Acevedo said that 25 percent of Chico’s shoppers who use live chat transform from merely viewing items on the site into buyers.

Art Technology Group, an e-commerce software provider, also expects live help to drive sales. ATG's research shows that 94 percent of U.S. consumers ranked "click to call" as “useful to extremely useful.”

Meanwhile, the ATG study showed 37 percent of U.S. consumers that found live help useful actually used "click to chat" before, while 21 percent of U.S. consumers that ranked live help as useful experienced a "click to call." (For more on, which type of experience works best, click here.)

Converting shoppers into buyers is important for Web sites, especially among apparel retailers.

“Apparel is one of the most difficult products to convert online because it has really become a price observation,” said Marshal Cohen, NPD market researcher. “You can’t tell quality and fit. The apparel industry has been the worst at taking the online experience and elevating conversion. More than half the population is not comfortable buying online.”

The ratio of purchases per visit across all retail segments is 14 percent to 28 percent, after adjusting for the multiple visits each customer may make before committing to a purchase, Cohen said. If visits to Web sites are tracked separately, the rate drops to about two percent, he said.

“There are a number of hesitations people have in making a purchase online,” said Diane Clarkson, e-commerce analyst at Forrester. “Typically, in retailing it’s shipping costs or simply people are looking around for different prices or not ready to buy yet. The reason why people aren’t completing transactions is because they’re missing information. Putting chat in front of customers is putting information in front of customers to help them complete a sale.”

Improving Customer Service

Live help also improves customer service. The average consumer finds customer service the most important factor in making a purchasing decision. Findings from the American Express Global Customer Service Barometershowed 61 percent of Americans said quality customer service is important and will spend nine percent more money with companies that provide excellent services than those who don’t.

Of course, the ability for live help to improve the customer experience may hinge on the quality of the assistance that’s provided.

High-end department store Nordstrom has aimed at improving its live chat service by offering beauty and design specialists as well as wedding stylists.

“If you want to talk to someone specifically on beauty and cosmetics, we have tabs so you can get there directly,” said Colin Johnson, a spokesperson for Nordstrom. “We found that customers have responded (favorably) to having those additional specialist chat buttons on the Web sites.”

Nordstrom implemented live help in 2004. While Johnson didn’t say live help directly boosted sales, he said the online and catalogue sales transaction jumped about 34.8 percent from May 2009 to the same period this year.

That’s more robust than overall online retail sales, which grew 11 percent last year to reach $155.2 billion, excluding travel, auto and prescription drugs, a Forrester survey showed. U.S. online retail sales are predicted to reach $248.7 billion by 2014.

“I think e-commerce and digital retail are important perks of retailers right now,” said Larry Joseloff, vice president of content at Shop.org. “It’s a growth area."

Questions? Comments? Email us at consumernation@cnbc.com

Retail