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TOP E-COMMERCE COMPANIES ANALYZED

Posted on July 26, 2002

      Forget the bells and whistles. Forget CRM. Forget the price wars. According to new research released this week from Miller-Williams, e-commerce customers feel that over 80 percent of their decision to purchase or not reside in issues beyond their online experience. What's really important to customers is brand performance.

      The research was based on interviews with 976 active customers of various top performing e-commerce companies (excluding travel) including Amazon.com, AOL-Time Warner, BN.com, eBay, Monster.com and Yahoo. Current, former and potential customers were asked to describe their ideal e-commerce company vis-=E0-vis a subset of the top e-commerce companies.

      Of the five attributes customers use to evaluate e-commerce companies, the Clicks Interaction driver makes up only 15 percent of decision-making. The Clicks driver incorporates all aspects of the customer's online experience, including pricing, customer support, the quality of offerings, and mistake rectification. Brand Performance topped the list (35 percent), followed by Financial Longevity (18 percent), Strategic Direction (17 percent) and Bricks Interaction (15 percent). These five attributes, or drivers, make up 100% of a customer's decision to purchase from a site or not. Customers recognize the value of a well-performing brand and today's top e-commerce companies are clearly meeting their expectations - a key to their success. Based on this response, the study suggests that companies should continue, or even increase, their investments in traditional advertising campaigns.

      According to the study, Amazon.com is the premier e-commerce company, having translated its Brand Performance into value on the Bricks Interaction. The research shows Amazon's value here is essentially the equivalent of a retail storefront, something that customers don't see in the other e-commerce companies.

      Customers wholeheartedly agree that e-commerce companies need to better demonstrate their financial security. What's more interesting is that customers do not necessarily equate financial resources such as revenue, net profits and market value with financial stability. Instead, customers see a company's aggressiveness and ability to seize new markets as increasing their financial longevity. After analyzing 27 bricks & mortar and e-commerce market leading companies, customers ranked Oracle number one in terms of financial security, outperforming others such as AOL-Time Warner, Dell Computer and General Motors. Amazon and Barnesandnoble.com enjoy a high ranking on perceived financial security.

      "This shows us why so many recent activities and acquisitions have been taking place in e-commerce," said Miller-Williams CEO, Gary A. Williams. "Their revenues and profits are stabilizing and becoming more predictable so they make nice merger or alliance candidates. E-Commerce customers are voting with their dollars, and the winners are companies that have shown their brand strength and ability to execute in a proven market space."

      With respect to Brand Performance, the study warns e-commerce companies currently evaluating the use of pop-up advertisements: Customers see the use of technology and marketing and advertising as being an inseparable part of the company's brand. Key groups of e-commerce users have been resistant to this form of advertising, so use of it may have an impact on the customer's decision to purchase from a site or not.

      The report finally offers some key action items on what e-commerce companies can do to win more customers and raise their presence to a higher level.

      For more information, please refer to the Miller Williams web site.

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