What e-Commerce Companies Should Do to Thrive in 2014?

The e-commerce industry in India continues to see strong growth despite the economic slowdown, all thanks to the rapidly growing Internet population, and the aggressively competitive pricing offered by various e-commerce companies. But, discounting and cost-cutting are not a long term solution for any business. They bring zero customer loyalty since consumers will always choose the site that offers the lowest prices and fastest delivery time. As a result, despite strong segment growth, several e-commerce companies were actually shut down this year because they just couldn't sustain their business. I fear that a lot more will follow if they don't get their act together.

So for the coming year, my advice to all companies offering e-commerce services (both pure-play online portals and brick and mortar companies selling online) would be to use technology as a key differentiator to their business. They should use it to improve their back-end business processes, quality of customer support, refund policies, etc. Sadly, most of this is sorely missing in a lot of companies, as I myself have witnessed, after having made several online purchases from time to time.

I've noticed that when you purchase something online, all processes related to sales and marketing are nearly perfect. You get a multitude of payment options--credit card, debit card, cash-on-delivery, to even phone banking. These are further integrated with SMS gateways, email, and phone calls to ensure that the customer is informed about the purchase at every step. So the moment you buy anything online, an email/SMS confirmation with your order reference number is sent, followed by a phone call by the logistics or on-site service partner.

The trouble starts after you've made the online payment and something goes wrong in the process-- a server glitch that doesn't book your order but charges your credit card; the logistics partner who doesn't deliver; or something else. That's when you see the real face of the company and its quality of service.

The IVR system in most cases, is a nightmare to maneuver, especially if the answer to your query is not there in the labyrinth of menu options. The only recourse then is to talk to a customer care executive, which is a task in itself as most IVRs make it nearly impossible to reach them. Even if you do manage to reach, and your query still doesn't get resolved, then God help you if you have to call back again, because from there onwards starts your endless journey of explaining the same problem to a never-ending line up of different executives (and their floor managers if you end up screaming at one of them!).

Companies that use technology to keep customers informed about the progress of their complaint, and escalate it if it doesn't get resolved within a specified time frame will be at an advantage. It's surprising that many companies still don't do that (including a popular dish TV company I dealt with recently).

Refund policies is another bane of e-commerce. If the customer is not satisfied with your service, then your refund policies have to kick in effectively. A certain online travel portal I've used takes three days to refund a customer's money, no matter how much is your urgency to book another ticket. After 3 days also, there's no guarantee that your bank will acknowledge this refund, meaning your credit card's limit will remain blocked for that amount until both the bank and the merchant acknowledge your refund. So God help you if you have to urgently book another online ticket and your credit card has insufficient balance due to this.

These are just some examples, but there are so many other aspects where technology can be used to bring about a sea of change in e-commerce. Companies who align technology with their business processes to handle such glitches and other eventualities will thrive, while others will continue struggling or might even shut down.

Wish you a happy and thriving new year in advance!