Discover how we're helping Joe Browns scale their online business with a new Ecommerce platform built on Magento 2.
With the fresh news that ASOS has released a profit warning this week and as a result has seen its share price plummet by almost 38%, does this show that the demise of bricks and mortar retail is spreading to online retailers?
ASOS has had unprecedented success in the market of high fashion, but have they taken their eye off the ball and neglected their customer service and as a result their end customers.
ASOS reputation for fulfilling online orders has festered over the past few years. Just taking a look at their trust pilot reviews show over 50% of customer’s rate their experience as poor, the worst result available. Delving into these reviews shows customers wanting to leave a zero score, making the situation even direr.
So, what concerns are consumers voicing around ASOS? A large proportion of complaints seen to stem around delivery, with express delivery options not being met by the retailer. One recent comments sums up the issue. 58% of 5622 customers who have sent in a review are unhappy with the service provided by ASOS and this is just the customers who have left a review. Many many more will simply have made the decision to not order again and will have told their friends and family verbally and on social media of the issues they have experienced.
Impact of Negative Reviews on Consumer Behaviour
Today’s modern consumer makes purchase decisions based on several factors and an increasingly important area is online customer reviews from sites such as trust pilot. There have been extensive studies on the impact of positive online reviews on consumers’ purchases decisions, but the impact negative reviews have on customer brand perception is still heavily under–investigated. The Journal of Retailing and Consumer Services carried out primary research and one of the conclusions was that consumers being exposed to an increased proportion of negative reviews of a product led to an increased perception of poor product performance and a decreased perception of product value. Furthermore, the research concluded that a greater weight is placed on online reviews where the majority of the comments are negative than when the amount of negative comments are negligible. The research also summarises that the average consumer will consult seven reviews before they make their purchase. Looking back at ASOS last seven Trustpilot reviews makes sombre reading, with six out of the seven reviews being negative and giving ASOS one star out of five (results as of 18th December 2018).
Research has indicated that in order to minimise the disruption negative reviews create, retailers should respond immediately to consumers’ complaints and feedback. This could result in a number of full time positions within the online retailer to manage the volume of responses required, and this is undoubtedly going to hit the bottom line, where margins and profits are under duress.
So, what else can online retailers such as ASOS do to tackle these issues? Well, first and foremost, don’t believe the hype around your own brand and become arrogant. No matter how big you are or how successful the market sees you, if you don’t look after your customers and offer excellent customer service, they will get fed up and look elsewhere. In this highly competitive marketplace, customer choice is vast and if you are not looking after your customers, someone else will.
Make sure you have the stock you say you do
You need to make sure you have a robust and accurate stock management system in place. Online Retailers need to make sure that the stock they are showing as available on their Ecommerce site is up to date and accurate, ideally with web services integration to their back office system, so that stock in high demand is updated immediately. Also, if stock is due in soon, online retailers need to be able to show this on the website and have confidence in their purchase ordering systems to ensure the stock which is due in is being monitored throughout the purchase order lifecycle and kept up to date on the website. Online retailers need to learn from traditional multi-channel retailers that excellent stock management is a base requirement for any successful operation.
Fulfilling on your delivery promises
If you offer premium delivery options, such as next day, you need to make sure you have the infrastructure to process these orders efficiently and the right carriers in place to be able to deliver in these timescales. Selecting a carrier that can keep up with your delivery requirements if paramount to ensure that your customer and their perception of your brand is not let down by the delivery of your products.
Poor Customer Service
Customers who order on premium services often need the products for a certain date, and this is highlighted at the moment, with customers ordering clothing for Christmas parties. If your order doesn’t arrive and you have paid a premium, you are not going to be happy. Furthermore, if the retailer has not informed you of this delay and you have to contact them, you’re going to be even more annoyed. And, as many ASOS reviews state, if you contact the retailer and they are not geared up to give excellent customer service, your whole experience of that brand is tarnished and undoubtedly, you will be wary of ordering from them again. End customers will often want to speak to a skilled and knowledgeable customer services agent if there are problems with their order. A strategic solution online retailers need to implement is to offer effective after sales customer service to improve customer satisfaction. If online retailers are not skilled up in this area, their brand reputation can be put under serious duress.
Ensuring that you offer great customer service and you are confident about your stock will reduce the amount of negative reviews you receive. But, only time will tell if ASOS can recover.
ASOS announced sales performance issues which knocked 38% off their share price. What's causing this shockwave through the online retail sector?
Download our easy-read checklist to help you decide whether you’re ready to take your online business to the next level.