Q&A: An Insider’s Look at the Online Shopping Industry

REDMOND, Wash., Oct. 13, 2000 — The Internet has fostered a new generation of consumers who like to shop online. Forrester Research estimates that about a third of all U.S. households will buy something online this year, spending approximately $38.8 billion in the process. By 2003, according to International Data Corp., 500 million people will spend more than $1.3 trillion online. Such statistics offer a handy lens for spotting industry trends, yet they fail to explain the undercurrents of this sea change. To bridge that gap, PressPass turned to retail industry expert David Dempsey, who spent 14 years in retailing and manufacturing before joining MSN eShop as a senior producer.

PressPass: Can you give an example of how online retail has learned from offline retail?

Dempsey: Over the past year, the whole online retail industry has learned the importance of customer satisfaction and service. A large portion of offline retail cost is associated with customer service, and now online retailers are adding features to enable the online shopping experience to mirror that of offline shopping. Over the past year, MSN eShop has added much more flexibility in how various types of retailers can present themselves online. For instance, a retailer whose primary purpose in being online is to reinforce its offline merchandising space may carry over the same theme used in a storefront window. Other merchants might focus more on a branding scheme or establish a seasonal presence. MSN eShop allows merchants the flexibility to maintain their offline image online as well as highlight merchandise, specials and promotions being offered online and at your neighborhood store. This variation is a more compelling approach for merchants than simply listing thousands of products, which many retailers did in the early days of online shopping.

PressPass: What kind of retail experience and information does MSN use to develop and improve its online shopping services?

Dempsey: Besides recruiting people like myself with a traditional retail background to help drive the online shopping strategy, Microsoft constantly strives to listen to consumers and their needs. MSN works closely with high-quality, established merchants, drawing upon their years of experience in retail sales. As their partner, MSN continually supports them by delivering great shopping services on MSN. For example, MSN harnessed its strength as a software company to equip merchants with the technology to deliver real-time inventory updates on MSN, enabling them to post and pull merchandise instantly. As a result, consumers can shop with confidence, knowing that what they are looking for is in stock.

PressPass: How does a portal like MSN compare with a merchant-specific shopping destination?

Dempsey: A portal brings much greater breadth and depth to the table. For example, consumers who visit MSN will find that the shopping experience is mapped to where they are on the network. Lets say a consumer is using Expedia to plan a vacation. We can present him with products and services that are appropriate and relevant to his trip and his tastes in travel. Also, keep in mind that MSN’s inherent core competency is building powerful, dependable and understandable tools. Because we have a stronger grasp of technology than many of the online properties, we can make the shopping experience easier and more understandable for consumers.

PressPass: In your years of retail experience — and now your involvement in the online shopping industry — what do you believe is the most important consumer benefit of online shopping today?

Dempsey: Online shopping is like a sixth sense in that it supercharges consumers to use their human faculties more powerfully than before. Consumers are empowered to shop more quickly, more conveniently and more thoroughly — an exhilarating and intoxicating experience that brings a whole new dimension to shopping. As the online shopping industry matures, it’s exciting to watch this space becoming appropriately specific to all the types of shopping that people enjoy. With continued technology advances, people can shop for more and different products in ways they couldn’t even imagine 10 years ago.

PressPass: How do the concerns of online shoppers differ from those of retail shoppers?

Dempsey: In many ways, their concerns are the same — great selection of high-quality products, dedicated customer service and good value. The difference is the means by which we deliver each of these online. For instance, online a consumer may wish to view and make comparisons among a selection of items all at once and quickly, without having to bounce around many different sites. We’ve also learned that one of the chief objections online shoppers have is encountering too much of a maze when they get on the Web to perform a simple task. Online shopping may be disorienting or overwhelming. We’ve learned that people don’t respond to hundreds of text links, and they don’t want to wait for huge pictures to download. On MSN, shopping and navigating are fun, quick and easy. We constantly strive to improve MSN shopping by developing features designed to specifically address the needs our consumers have identified in user feedback.

PressPass: What has MSN done to make sure consumers are comfortable with their online shopping experience?

Dempsey: MSN works with well-known merchants that meet many requirements, which include providing consumers with secure transactions and posting their privacy statement on their sites, along with providing prompt customer service. Because of these requirements, consumers who shop on MSN have the confidence of knowing that the merchants they’re doing business with are legitimate and recognized as delivering the best quality. We work hard to make sure we represent all types of merchants well. As a result, a consumer shopping for a 19-inch color TV, for example, can choose to purchase it from a merchant who’s exclusively online, buy from a
“click and mortar”
specialty shop, or get information about the nearest neighborhood retailer.

PressPass: What does MSN eShop offer consumers who aren’t comfortable purchasing online?

Dempsey: Even if consumers choose to buy an item offline, they can accomplish a great deal quickly and efficiently on MSN because the site consolidates many of the steps leading up to a purchase. The key advantage is that all shopping-related activities are in one place and presented in a uniform format, so consumers can do everything from product research to product-feature comparison to finding the best value. The tools at their fingertips include power searching capabilities, buyers guides, current information from manufacturers and merchants to make comparison shopping easy, and integration with MSN Yellow Pages to locate local retailers in their community.

PressPass: What goal is MSN eShop striving to achieve this holiday season?

Dempsey: MSN eShop’s goal is to offer consumers the most informed online shopping experience. We deliver on this goal by providing more tools at your fingertips than any other shopping site online.

PressPass: What trends are you seeing today in online shopping?

Dempsey: The biggest trend overall is the increasing number of online retailers who understand the complexity of the retail business, whereas online shopping initially was driven by people who had a keen understanding of the Internet and the latest technology but not the retail industry. For example, people with retail expertise in the online shopping business now recognize that consumers shop differently for clothing vs. electronics vs. big-ticket items. This trend is good news for consumers. As online retailing expands and becomes commonplace, the online shopping population is getting less and less technically sophisticated — much like the trend we’ve witnessed in people using email. Online retailers are coming around to the knowledge that success today means reaching these consumers and providing the level of satisfaction they require for an easy, simple online shopping experience.

PressPass: Do you foresee any trends specific to this year’s holiday shopping season?

Dempsey: The most significant trend is
“click and mortar”
retailers coming into the picture in a big way. In the past, the buzz was all about dot-coms, while many traditional
“brick and mortar”
companies were hesitant to take their business online. Consider how difficult it was as recently as year ago to find a manufacturer’s authorized retailer online. This holiday season, consumers can expect to see more of the major players adding an online component –Radio Shack is a good example — and dot-coms incorporating tried-and-true offline retail strategies. eToys, for example, now boasts both a partnership with amazon.com and a product catalog. This trend spells another win for consumers because they gain more opportunities to find the products and services they’re looking for.

PressPass: What is the greatest challenge facing online retailers this holiday season?

Dempsey: Online retailers face the challenge of being profitable and sustaining their business while providing consumers the best possible service and value. In the past, the focus of online retailing was on cool, new and exciting technology. It’s still all of those things, but shopping — whether it’s online or offline — is the business of bringing consumers into your domain and having them return because they get the service and value and products they want. This commitment to customer satisfaction requires a great deal of work and care.

PressPass: What do you see as the top priorities for online shoppers?

Dempsey: Consumers want the assurance that their entire shopping experience will be complete and correct, that they’ll get the right level of customer service, the right level of value and the right products — and that they’ll arrive at the right time. MSN will offer a number of new resources later this fall to address these key consumer priorities.

PressPass: What resources on MSN can help consumers have a better shopping experience this holiday season?

Dempsey: One of the features we’ve worked hardest on is power searching. Integration of MSN Search into shopping helps make finding exactly what you’re looking for faster and easier than ever before. We recognize that there’s a whole class of consumers who want to drop in a word or phrase and get results. One of the best ways to be of service to these consumers is to pre-sort and pre-interpret product information for them, based on the experience we’ve had helping other consumers. In addition, we’ve placed greater emphasis on the look and feel of shopping by branching our retail merchandising out across all MSN channels in a relevant way. This approach mirrors traditional shopping, which by nature involves inspiration and fun.

Related Posts