Are Holiday Dot Com Ads Doomed to Disappoint?

E-commerce companies this holiday season are spending billions in advertising, attracting millions of potential customers and then driving most of them away with a bad customer experience, says an Internet strategy consulting firm.

The firm, Creative Good, predicts that the day after Thanksgiving — traditionally the busiest shopping day of the year — will frustrate many online buyers and kick off a disappointing, but much hyped e-commerce holiday shopping season.

“Even before the holiday egg nog is consumed, we will experience an industry-wide hangover,” said Phil Terry, CEO of Creative Good. Too many e-commerce companies are providing “a bad customer experience — confusion, frustration and, ultimately, no sale,” he said.

In fact, Creative Good estimates that $6 billion of potential revenue will be left on the holiday table because of poor customer experiences. In essence, companies are spending more money to convert fewer customers.

“This gap will create cash flow problems for startups and large companies alike. This is why Levi’s pulled the plug on its Web efforts. This is the hangover that could push consumers right back to brick and mortar retailers,” said Mark Hurst, Creative Good president and founder.

What is causing many of these sites to fail? Poor navigation, confusing search features and inefficient check out processes, among other factors, the company said. Principally, however, it is a general lack of focus on the customer experience.

Creative Good examines these issues in its Holiday ’99 E-commerce report which is free for the download.

Creative Good clients include Gateway, Macys.com, Travelocity and Flooz.com. Research customers include Microsoft, Amazon and America Online.

Creative Good also publishes both the ZDNet e-commerce best practices Web site and the customer experience site, GoodExperience.com.