What did you find most interesting or most surprising about this study?

The pendulum has swung and we’re in a time now where online consumers’ expectations are ahead of web retailers’ capabilities. Consumers are more and more demanding. You see something on one site that’s a neat feature, and you’re disappointed if it’s not on another site. Those expectations are also built up through social network sites.

The rise of social media, social networking and blogs between 2002 and 2005 was the turning point. Before that, in the early days of online shopping, when there were fewer broadband connections, retailers were able to impress customers with new features and capabilities. Customers weren’t always in the driver's seat.

That's changed, and a lot of this revolution is being led by Generation Y.

What's the most important thing media buyers and planners can take from it?

The spending power of Generation Y, people in their 20s and late teens, is only going to increase. But they are a generation raised on the internet, and they have a very different idea of how brands should communicate with them.
We’re used to a one-directional flow from brands to consumers in their advertising. Generation Y especially is looking for more of a relationship, the opportunity to talk to retailers about their products.

Since Gen Y is spending more time on social shopping sites, some retailers are realizing that they should reach out to consumers on social networking sites. As a result, you’re seeing more brands launching pages on Facebook and MySpace, and even YouTube, and they’re providing information about their products but also encouraging interested consumers to offer suggestions and ideas on product development.

It means the brands have to give up some control, and there’s some vulnerability there, but at the same time they have an opportunity to be more competitive.

If they allow their customers to get more involved, it creates more loyalty. If you feel a retailer is listening to you, you can respond by being a customer for life. It’s really become a relationship. It’s much different now from the old way of brands dictating, “This is how we do it and if you’re interested in our product, come to us.”

Has the recent economic downturn and cutback on consumer spending had an impact on online shopping?

Absolutely.

First of all, online sales growth has been declining year over year, as evidenced by the U.S. Department of Commerce’s quarterly ecommerce estimates. But also as something gets larger, the pace of its growth slows, and that's the case with online shopping.

It’s a maturing channel. Most internet users who plan to buy online are already doing it.

The economy’s accelerating that trend, putting more pressure on what’s already taking place. So now growth rates are taking a steeper turn.

The second quarter of this year is the first time growth dropped down to single digits, and that’s a steep drop. It seems like things will get worse before they get better, so it could be a difficult Christmas season.

But keep in mind, internet retail sales are still growing several times faster than total retail sales, so while it’s experiencing hardship it’s still growing at a fast clip.

What do consumers expect from online retailers?

It’s basic things. A site that’s easy to navigate, easy-to-find products that you’re looking for and are easy to sort through them. A site that’s easy to get product information from and compare products. It depends on the product category, but that information is important.

Also, a simple checkout screen is important. Cross-channel shopping features are important; the ability to buy online and return something to a physical store is something consumers are receptive to. It could be being able to track orders from the point of fulfillment to delivery.

People also like personalization, being greeted by name, and product recommendations.

How is social media changing the online shopping experience?

There are so many different ways social media can influence the purchase process, and one way we already said is a retailer having a page on Facebook and similar sites. But people also talk about their experiences with retailers online, and those can influence purchase decisions.

This is a lesson also for brands.

They should be monitoring this and reaching out to consumers. When something’s not right with their service or products, they should get into the dialogue. If done right, they can turn around a bad situation quickly.

Of course the best thing to do is not to make the mistake to begin with, but if they do, there’s an opportunity to fix it.

How do you expect online shopping to change in the future?

You’ll see more cross-channel shopping options offered by web retailers. There’s more interest in product personalization. When done right it can be a very powerful tool.

I think more web retailers will be offering consumer recommendations, and further in the future there will be more online video and similar enhancements. Consumers like to see how products work and what the key features are. Videos create a lot of excitement.

Online retailers are looking for ways to replicate the sensory experience you have in a store with touching and feeling products. That’s sort of one of the drawbacks of ecommerce.

Also, we can expect to see more community features, like social shopping sites that combine networks with shopping tools, so people come together and share ideas on products and collaborate with brands on product development.