Consumer dissatisfaction: insights into online retailers’ performance

Using social analytics, NetImpact Solutions pieces together the key consumer pain points of major e-commerce players for October and November 2016


Graphic: Vipul Sharma/Mint
Graphic: Vipul Sharma/Mint

To quote Bill Gates, “Your most unhappy customers are the greatest source of learning”.

The e-commerce sector is no exception to this. During the festive months, this sector sees every possible weapon in the armoury being used by players as sales and advertising spending reach new heights every year.

Using the lens of social analytics, NetImpact Solutions Pvt. Ltd (a social analytics, online reputation management and brand strategy firm) has pieced together the key consumer pain points of major e-commerce players for October and November 2016, and the findings have been hugely revealing.

Since, by definition, the bulk of the action is online, tracking and analysing social buzz is a critical indicator of the health of the consumer base, the strength of marketing and business initiatives of e-commerce companies and most importantly the ease of doing business as ranked by consumers.

A huge social
interface

E-commerce consumers are a sizeable chunk and they express their opinions on social platforms on a variety of things—from what sales they liked, to the best deals available, to what advertising worked for them.

NetImpact analysed over 1.5 million conversations across eight e-commerce brands (which sell across all product categories and not vertical players specific to a particular category) covering October and November 2016 for this study. Amazon led with 27% conversation volume (with its Great India Sale) followed by Paytm and Flipkart.

Consumer
experience pain point ranking

Embedded in this social chatter are the conversations on negative experiences. For the critical period of October-November 2016, these were a significant 13% of the total conversations for all players. Snapdeal struggled with a high figure of 36%, led primarily by delivery issues in this period. Paytm had the second highest number of negative conversations after Snapdeal at 12% of total brand conversations. The two giants Amazon and Flipkart were in high single digits at 9% and 8%, respectively.

Interestingly, both Amazon and Flipkart have seen their negative percentage rise compared to our earlier analysis in the first quarter of 2016 where they ensured consumer delight with negative conversation percentages in the low single digits (see Mint report, India’s e-commerce wars: a consumer perspective (bit.ly/1V7rGkx)).

areas of
dissatisfaction

While the industry overall had a 13% of consumer comments expressing dissatisfaction, digging deeper into the various drivers for the negative conversations revealed that unsatisfactory customer care response and delivery issues together accounted for more than 50% of total negative social conversations.

Rahul Saighal, managing director, NetImpact Solutions says, “Brilliant basics around customer service and delivery will be the foundation for eventual leadership and this is a clear hygiene level opportunity.”

The leading grouse among the complaints was around unsatisfactory responses from customer care with people sharing their frustration over unclear responses to their queries and issues, and an inability to reach customer care with ease. While many of the top firms have invested in getting their logistics and warehouses revamped, clearly the stretch of the sale period left them struggling as delivery issues continued to bother consumers, reaching a quarter of all complaints. Refund issues at close to 12% was another cluster where people complained of long waits for refunds against cancellations; followed by return or replacement issues. The long tail is led by issues in product reviews, product quality or misleading details available on websites.

conclusion and looking ahead

With more competition expected in the form of Alibaba and Rakuten, getting the consumer experience smoothened out will be a key differentiator for some, and a matter of survival for others.

In an industry where often deals and discounts swing market share, having areas of dissatisfaction managed better will be a big step in genuine consumer loyalty and profitability.

Methodology

The number of conversations has been arrived at using the following methodology and NetImpact’s proprietary techniques.

• Time frame: 1 October to 30 November 2016 (eight weeks).

• Conversations are defined as shares, tweets, mentions and comments across social media, blogs and reviews linked to e-commerce brands in India.

• Conversations measured are those which could be captured by various tools and packages and NetImpact’s proprietary techniques. These are not exhaustive but strongly directional given the 15 lakh conversations captured across eight e-commerce brands (that offer products across categories and not the vertical players specific to a single segment alone).

• These conversations are the ones that had a direct or indirect mention of the brand.

• Conversations linked to impact of demonetization and Paytm have been removed as that was an external one-off event.

DISCLAIMER: We have covered the major players in e-commerce who are selling products across all categories like electronics, fashion, books, home furnishing. Vertical players catering to specific categories like fashion (Jabong, Myntra and others), home furnishing (Urban Ladder, Pepperfry and others), beauty, etc. were not part of this study.

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