The commercial craziness that is the run up to Christmas has kicked off here in Britain, with the checkout tills humming from Oxford street to Covent Garden in London. But if you listen carefully, you should also be able to hear the whirrings of transactions in the darkness of cyberspace. The English have embraced online shopping, and there are estimates that we will buy 15% of our Christmas goodies online this year.

I’m a great example of someone who uses the Internet for work and play. As if being wedded to the laptop for more hours of the day than necessary isn’t enough, I choose to shop online as well. And for the most part, I love it. As an industrious cyber-shopper and pedant, I pride myself in spotting Web site shortcomings.

What surprises me is just how many sites with shortcomings I’ve stumbled across in this last week. Have Santa’s little helpers gone on strike ahead of the rush to Christmas, or is this poor planning on part of IT and operations? Here’s a few examples:

• A hotel booking Web site that couldn’t successfully take a booking via  credit card —no surprise, I choose another hotel

• Two retail sites that send tracker notification e-mails without the tracker IDs—annoyance factor that grates at their brand

• A mobile phone site requiring me to re-key all details when I moved to another section—more brand erosion

• A retail site who’s “shopping basket” had a memory limit of five minutes

Some of these shortcomings contribute to the annoyance factor. It’s like going into a brick-and-mortar store, and they don’t have the item on the shelf. You can’t sell what you don’t have in store. So you take your pounds elsewhere, and the company never knows they even lost your business.

Business should be smarter about their on-line stores. You don’t leave your high-street store unattended, or without stock? You should pay similar attention to detail in your online offering. The direct channel will become increasingly important in the future, for retailers, and insurers alike. Relative to retail, insurers have been a little slow at embracing online commerce, but should remember that they get measured along the same factors as an online retail store. After all, that’s what the consumer knows.

The English are happy to buy insurance online, particularly motor. We have some of the better Web sites in Europe for doing exactly that. And there is plenty of activity. Through an aggregator site, one insurer gets 250,000 quotes between 8pm and 9pm on Mondays—apparently, this is the time consumers look to shop for insurance. You couldn’t make it up!

The key takeaway here is the importance of having a solid customer portal that behaves in the manner a customer expects. This requires continued investment to reflect changing customer behaviour, and to leverage new technologies. In conversations, we see this as one of the key areas for IT investment in 2010. (We will be writing more on the topic of B2C in insurance in January). Owning the distribution space remains an important objective for insurers looking for growth in the coming year.

This blog has been reprinted with permission from Celent. Catherine Stagg-Macey is a senior analyst in Celent's insurance practice, and can be reached at cstagg-macey@celent.com.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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