You Have 360 Days to Change Your Mind
The exponential growth of e-commerce presents an old problem under new forms: how to gain consumers' trust. This problem is acutely felt in the case of sites such as Amazon, Ebay or Groupon, veritable e-commerce platforms that mediate transactions between millions of consumers and a myriad of producers.
The force of Amazon lies in the ability to create a large market between consumers and retailers. Many of these retailers (especially those operating in niche markets) would otherwise have difficulties in reaching a wide user base. At the same time, consumers would not find such items in traditional distribution channels with the same level of ease. The same can be said for Groupon, which sells coupons for services (restaurants, beauty farms, spas etc) at cut-down prices, which the customer must use over a limited time-horizon. While offering the consumer an immediate advantage, Groupon offers retailers value by supplying a new marketing channel: to make themselves known to a potentially large audience of new consumers.
However, such benefits alone are not sufficient to generate trust in consumers over said transactions. Actually, the more enticing the offer is, the more suspicious consumers become. A necessary condition to generate trust is to provide detailed information on the good or service being offered, as well as on the retailer's profile. But this may well not be enough, since we are dealing with remote transactions where people must pay up front for goods or services that will be delivered in the future. Thus, in this type of market, the problem of trust is a fundamental element in the competitive game.
Ebay and Amazon have succeeded where others have failed, i.e. they have managed to expand customer base and sales volume, thanks especially to their superior interaction between sellers and buyers. One instance of this is their feedback system, which not only increases consumer trust, but creates strong disincentives against opportunistic behavior on the part of sellers. While this is effective, it still has two major drawbacks: in order to be efficient it needs a large number of users; it has by now become standard, and as such it offers scant value in terms of differentiation.
If trust is a critical competitive factor for these platforms, the answer must lie in business models and choices that become sources of differentiation. An example of this is provided by Zappos, a US start-up which specializes in the online selling of shoes. Zappos has invested to create a company culture and a business model centered around the consumer.
The company gives the consumer 360 days to give back the product he/she bought free of charge (and pays a courier to pick up the goods that have been found wanting). The attention for the customer is so important that all new hires must spend at least two weeks in the customer care department. To each new employee a $2,000 check is given to leave the company if they feel dissatisfied working there. This is a mechanism that retains only those that are aligned with company values. Rather than costs, Zappos considers these expenses as investments in the trust and loyalty of customers and employees.
There are platforms that have started following the Zappos model. Groupalia, Groupon's main rival on the Italian and Spanish markets, is challenging the leadership of the main market incumbent by positioning itself in terms of higher customer satisfaction and stronger consumer guarantee. For instance, users can be reimbursed if they are unable to book the service bought in dates that are congenial for them. It is likely we are going to witness the appearance of increasingly evolved and sophisticated business models aimed at overcoming the "problem of trust".