Chat Me Up...Please

Instant messaging on e-commerce sites pleases customers and boosts sales

Let's face it: Shopping alone is a bummer. When I hit the mall looking for a suit or tie, I usually drag along a friend or, at least, consult a salesperson so I don't commit some ghastly fashion faux pas. On the Internet, though, flagging down help isn't so easy. You can't always count on a friend to be there. And customer service? Every time I zap off an e-mail with a question, I wait hours, even days, for a response.

That doesn't quite satisfy my thirst for instant gratification.

Well, consider this quencher: instant messaging, a kind of super e-mail that lets two or more people hold a real-time conversation online. No more waiting for a pokey e-mail reply. First introduced by America Online Inc. (AOL ) in 1997, the technology is now enjoyed by 40% of the U.S. online population, up from 27% in 1999, according to researchers Cyber Dialogue.

What are you waiting for, Web merchants? Only about 8% of e-commerce sites offer live chat to let shoppers contact a friend or a customer service rep, according to Jupiter Media Metrix. Too bad for them. Instant messaging is a "killer app for attracting users to Web sites," says Jupiter analyst Lydia Loizides. Devotees of instant messaging spend 15 hours a week online, compared with 11.5 hours for average users, Cyber Dialogue says. And 85% of them have recently shopped on the Web, a notch above the 78% of typical online adults. "This is a very savvy Internet-using group," says Cyber Dialogue's Ben Cutler.

Berries. Consider my cousin Alonzo. He has 108 people (including me) on his instant-message buddy list. When he's shopping, he first checks sites that feature instant messaging. A favorite: Shari's Berries at berries.com, an e-shop for strawberry lovers. When he's unsure about what's in a gift box, Alonzo pops off a message to customer service and gets a quick reply. "I don't think I could do without" instant messaging, he says.

Some big Web stores are waking up to the potential. Land's End Inc. (LE ) instituted live chat with customer service reps in 1999, when it realized that people want the same kind of service online that they get at the mall. It works. My Land's End rep, Darcia, responded in seconds to queries about belts, sending immediate replies and even pushing pictures to my screen. Of course, not every merchant is so efficient. Too many defeat the point of good customer service by not having enough reps on hand to keep impatient surfers from clicking away while waiting for a response. But being snappy helps Land's End convert more than 10% of its visitors to buyers, almost three times the Web's average of 4.9%, according to researchers Nielsen/NetRatings. The IM service has helped increase Land's End's Web sales from $61 million in 1998 to more than $200 million in 2000. Chat's contribution "is huge," says Bill Bass, the company's Internet division chief.

Instant messaging can help connect customers, too. Travelocity.com Inc. (TVLY ), the top travel-booking site, in June added a link that lets shoppers chat with friends while looking for a flight or hotel. My fiancee and I hooked up online to work out details of a ski trip to Colorado, chatting about options while looking at the same Web pages. Sure, it's not perfect: Travelocity gave me too many error messages and was slow to load. But letting people shop together has helped Travelocity convert a robust 8% of its visitors to buyers, says Elizabeth Cole, the site's marketing VP. It's about time other Web sites got the message: Live chat could boost sales in an instant.

By Roger O. Crockett, roger_crockett@ebiz.businessweek.com

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE