E-tail's Christmas test: Who will be the stars and who will be the turkeys?

It's set to be a bumper year for e-tailers as record numbers of consumers go online. According to the Boston Consulting group, ecommerce revenue quadrupled during the 1999 Christmas shopping season. A similar increase is expected this year.

But have the past 12 months really taught e-tailers any valuable lessons? Have they put the late delivery fiascos and abysmal customer service record of last year behind them? One irate silicon.com reader is not too sure.

Recently he logged on to travel site ebookers.com to book a Christmas trip. One technical hitch, five emails and seven days later he was still unable to book tickets. More frustrating however was the complete lack of response from the company.

The same site also failed to respond to an email query from this reporter, and call centre staff offered three different explanations as to why a certain category of the site was not functioning in what must be one of the busiest periods of the year for travel agencies. The fourth operator just hung up.

Sanjiv Talwar, managing director of ebookers.com, admitted that this level of customer service was not acceptable.

"Our objective is a 24 hour email response time. None of this excuses the eight day reply time," he told silicon.com.

The upside, according to Talwar, is that the technical error that prevents online bookings under a certain category is due to live testing of a new CRM system that will fully integrate the site with back end airline reservations.

That's all very well. However up to 2.4 million people used the site during November and December, a seven fold increase on the same period last year, according to Talwar. Our unhappy reader eventually had his grievance resolved. But no doubt there are others like him wondering why ebookers weren't worrying about CRM last February rather than disrupting business - and holiday plans - with technical tests during the year's busiest shopping season.

Ebookers is not the only poor customer service culprit. No doubt many online consumers are still fuming over last year's delivery debacle when various e-tailers including ToysRus, eToys, Macys and CDNow failed to deliver some orders until mid-January.

It's not surprising then that consumers are still reluctant to shop online, says Nick Jones, senior analyst at Jupiter. He is the author of a recent study that found many regular internet users still prefer to shop offline.

The report estimated that 25 per cent of the European online population buy on the internet, while 36 per cent of them are happy to window shop on e-tail sites but prefer to spend money offline. Jupiter calculates that online retailers are losing out on E7.5bn (£4.6bn) by failing to convert these internet browsers into internet shoppers.

Internet companies must take some responsibility for consumers' cautious approach to online shopping, says Jones. A lot of e-tailers continue to exaggerate the online shopping experience, while failing to educate customers that even internet deliveries fall prey to bad weather, train delays, and poor postal services.

Admitting this means exposing fulfilment issues, and companies, trading on the perceived infallibility of the internet, are reluctant to do this, says Jones.

Daniel Gestetner, CEO of price comparison portal, Shopsmart, agrees that e-tailers need to educate consumers.

"The main let-down last year was order fulfilment. Consumers need to know that you can't order five days before Christmas and expect your order to arrive," he warns.

The Shopsmart portal provides access to 1,000 sites, but according to Gestetner 85 per cent of exits from the portal go to the top 300 sites. Obviously the high profile internet brand names are in for a busy Christmas. Analysts predict that this year will be a 'make or break' phase for a lot of them. Gestetner agrees.

"A lot could find their VC funds dry up if they don't perform this Christmas. Last Christmas they were basking in the Euphoria of the internet. But now that safety net has gone. It's real business."

Peter Hurst, director of marketing with Nortel Networks ebusiness solutions division, is a little more optimistic. He believes that last year's disasters, and the general dot-com slump, have shaken a lot of e-tailers out of their customer service complacency.

"Awareness of customer service is starting. A lot of e-tailers got a shock last year. I think expectations are rising. People realise CRM is a core of the business, it won't be universal but take up will improve through out 2001," he claims.

However Jacqui Hendriks, research analyst with the Gartner Group, believes that the customer service expectations of e-tailers are not rising in tandem with those of consumers. She warns that we can expect to see many of last year's order fulfilment mistakes repeated.

Despite dot-com doom many e-tailers are still spending heavily on advertising. CRM integration is way down their list of priorities. If poor customer service comes on top of over-hyped convenience many customers are going to vote with their feet and take to the high street, she warns.

But customers who do choose to shop online will be better protected this year according to Richard Webb, trading standards officer for ecommerce, at the Trading Standards Institute.

Under the EU Ecommerce directive, issued earlier this year, an e-tailer must specify the length of time required for delivery, and all purchase transactions should be completed and delivered within 28 days.

The consumer can choose to cancel an order if it looks like Santa Claus's stock isn't going to arrive until the beginning of January. If an e-tailer fails to make the specified deadline the consumer now has the right to return the goods and request a refund.

However there are some things that even the EU can't regulate. "With the postal delays and flooding it's almost inevitable we're going to have problems," warns Webb.

In the US the federal trade commission recently issued warnings to 100 retailers threatening them with court action if they repeat last year's late delivery fiasco. The message on both sides of the Altlantic is clear. Shoddy customer service will not be tolerated.