First Word: Demands high for online delivery

Like an increasing percentage of consumers, I've gotten pretty comfortable over the past few years with the whole idea of shopping online.

The convenience is unbeatable, and with many online retailers getting better and better about things like selection, product information and delivery options, online retail can actually be not just an easier and more efficient way to shop, but a superior one in many cases to visiting a bricks and mortar store.

I had an experience recently, though, that challenged my faith in online retailing. Because for all the ease of the shopping and the buying, the process breaks down pretty significantly the product isn't delivered.

In my case it involved a package seemingly star-crossed from the get-go. Notified by the merchant that my item had shipped, I awaited my purchase. After the scheduled delivery date went by, then another day as well, I checked with the shipping company.

For several days the latest entry on the online tracking tool had shown the package at a sorting facility in suburban Chicago. Making my way past the automated responses on the shipping company's customer service line to an actual person, I eventually learned that my package had in fact traveled from suburban Chicago to Alabama, a circuitous route to our home on Chicago's North Side.

A new delivery date was set, and on the appointed day, an online tracking check showed that my package had been delivered. Only it hadn't, or at least when I got home that evening it was nowhere to be found. A call to the shipping company directed me to the merchant. The merchant told me they'd file a claim, the process would take 10 to 12 business days and someone would get back to me. And for me, the shine of online shopping started to tarnish a bit.

As it turned out, I ultimately learned from a neighbor that the package had in fact been delivered, accepted by their nanny who must have tucked it temporarily in the basket of a stroller where it was forgotten and not discovered until some time later. Oh, the shame I felt for letting my faith in online shopping be so easily shaken.

It seems I'm not alone in my shaky faith, though, a fact that should concern those in the insurance industry looking to do business online.

A couple of weeks ago, I chatted with Geoff Galat, vp of marketing and product strategy at San Francisco-based TeaLeaf Technology Inc., a company that produces tools allowing businesses to monitor customers' online experiences on their Web sites.

He shared some pretty dramatic data.

The numbers came from the second annual Online Transactions study conducted for TeaLeaf by Harris Interactive, and they showed that online failures can lead consumers to abandon transactions or turn to competitors pretty quickly.

The survey showed that 88% of consumers had experienced issues when completing online transactions, and that 32% of those would switch to a competitor--either online or offline--when they experience a problem.

The survey also showed that 91% of consumers who experience a problem are likely to question the companies' ability to keep private information secure, a huge consideration for anyone in an info-centric business like insurance looking to operate online.

Another serious consideration for insurance industry companies moving into the online arena: 85% of those surveyed for TeaLeaf by Harris Interactive said they have the same expectations when doing business online as they do when doing business offline.

With consumer expectations that high, you're going to try to do business online, you'd better make sure you can deliver.