1.     PayPal – The widespread adoption of PayPal as a payment method among online retailers is quickly growing. Using PayPal as a payment method definitely has several advantages for me as a consumer:

Ease of Use – Click the PayPal button during checkout, log into your PayPal account, authorize payment, done.  It’s that simple.

Great Customer Base – You’ve read about the hundreds of millions of transactions on Ebay every year right?  Well the majority of the buyers AND sellers are used to using PayPal as THE de facto payment method.  Let’s think about this for a second – there are millions of members on Ebay, most paying or getting paid by PayPal (i.e. accounts are already established), it’s a comfortable payment method for many people doing online transactions, and it’s EASY.

No Credit Card needed! - This is a HUGE advantage over a system like Google Checkout in my opinion as I can associate the PayPal account with my bank account, and safely use that payment method for direct debit transactions.  No worries about online transactions on my check card, and easy payment reconciliation.

2.     Online Consumer Reviews – Word of mouth marketing at the speed of the Internet.

Honest Product Reviews – If I go to YOUR site, I see your company’s marketing messages and merchandising tactics.  Though your site may tell me how “great” something is, it really may not be.  As a merchant, it’s certainly your prerogative / duty (?) to educate me as a consumer – but YOUR opinion of YOUR product is only one side of the story.  Sites with extensive USER product reviews give me a comfort level about a product that I’m researching, and if your site doesn’t have them – I’m going to a site that does!  That’s not to say that I won’t return to your site to make my final purchase – but I am leaving your site to gather information elsewhere.  At that point, I’m either a non-converting visitor on your site, or you will see a delayed transaction on my part IF I decided to return to your online store to complete my purchase.

I Buy From Who I Trust – My holiday shopping in late 2007 was done almost exclusively online. And those that got my business, my MONEY, provided me with user-generated product reviews that helped me make not only educated decisions on products, but a major conversion factor for me as well.  Amazon.com and eToys.com user reviews were a godsend when it came to researching many products for my family and my son.  Because those two sites provided me with information such as user reviews that helped me form a sound decision – my tendency was to stay on those sites and complete my purchases there.

3.     Free Shipping – The tried and true online marketing promotion that makes a massive impact on every single online purchase I make.

Free Shipping is a

SALE

THE #1 Online Marketing Tactic – ComScore reported in January that the #1 promotional vehicle online consumers were looking for was free shipping. If your goods are online at full price, and not exclusive to your store, you’d better believe that educated shoppers will and DO go to other sites with the same goods, at the same price – just to save shipping costs.

4.     No Tax – Look at the consumers who flock to the malls on certain states’ “tax-free weekends.”.  The savings of between 6-10% in the eyes of a consumer can be a huge incentive to purchase goods online.

A Discount Is A Discount, Even When It’s Called “No Tax” - Couple no tax with free shipping, and many consumers can see a savings of up to +20% on their entire purchase.

Some Online Retailers HAVE to Charge Tax – Online retailers have to charge tax on a transaction when they have “nexus” in a state – i.e. a physical presence / office / retail store locations.  If your site has the goods I need / want, the pricing is fair, and you have strong shipping promotions, I can and will overlook that tax aspect.  However, online retailers need to remain mindful of the fact that non-aggressive shipping promotions coupled with a tax charge could end up making me look for the same goods elsewhere – which I do often.  Retailers who are required to charge tax over a wide area should heavily consider not only discounting shipping rates, but something like a “gift with purchase” (GWP) to help me overlook the tax being charged.

5.     Free Returns – I have spoken to many online retailers, large and small, who think that if they make returns / exchanges easier by tactics such as free shipping back to the seller, they will in essence have paid money out of their pocket to lose your business.  That is simply not the case.

Customer Retention Mechanism - Though I tend to purchase shoes from Zappos.com that are made by brands that I’m familiar with, sometimes I’ll purchase something just because I think it looks good.  The problem arises when that shoe manufacturer has slightly different sizing than I’m used to.  Once I receive my new shoes (Free OVERNIGHT shipping and no tax nonetheless), they may not fit correctly.  But as a Zappos consumer, that’s not an issue to me whatsoever.  I can simply return the shoes for free for a full refund or exchange. If I like the shoes in the first place, and they’re just a bit too big or a bit too small, why wouldn’t I simply do a free exchange – with no out of pocket expenses for me whatsoever during the return / exchange process. 

I'll be back with an update in the next 2 weeks, going over 5 things that shoppers DON'T want from online retailers.  ;)

Matthew Brown, Ecommerce
MarketNet
www.marketnet.com