E-retail satisfaction decreased in December

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By: Wise Marketer Staff |

Posted on January 10, 2011

E-retail satisfaction decreased in December

Although many US-based online retailers reported having a good holiday shopping season at the end of 2010, customer satisfaction with the top 40 online retailers had actually fallen since 2009, according to the sixth annual E-Retail Satisfaction Index report from ForeSee Results.

Compared to the 2009 holiday season, the index slipped by 1% to 78 on the study's 100-point scale, despite still being significantly higher than in previous years. The overall decline was largely due to significantly declining scores for some computer & electronics retailers and mass merchants.

"In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices," explained Larry Freed, president and CEO for ForeSee Results. "But our research shows that this is not always the case, and that it varies drastically from company to company. Retailers were slashing prices to attract customers, and not all of them needed to be doing that."

Amazon, Netflix, QVC.com, Avon.com, LLBean.com, Newegg.com and Apple.com were rated by customers as the most satisfying retail web sites, with each scoring 82 or higher. Altogether, one dozen retail web sites had customer satisfaction scores of 80 or higher.

The report also found that customer satisfaction has a huge and quantifiable impact on the future success of a retail web site. Highly-satisfied visitors to retail web sites said they are 60% more committed to the brand overall, 61% more likely to purchase from the retailer online, 35% more likely to purchase from the retailer offline, and 64% more likely to recommend the retailer than are dissatisfied visitors.

According to Freed, increasing customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations: "What else can a retailer do between January and November to make customers 61% more likely to purchase, or even 10% or 20% more likely? There are few investments aside from improving customer satisfaction that would have the same impact on sales, loyalty, and recommendations."

Among the report's other findings:

  • E-retailer Amazon (86) and retailer Wal-Mart (80) both had superior online satisfaction scores, but Amazon still held a 6-point advantage. Amazon beat Walmart.com in three measured elements of web site satisfaction: content, functionality, and merchandise, and the two companies were tied on consumers' perceptions of their prices.  
  • The three major US office suppliers competed closely in terms of satisfaction with Staples leading at 78, followed by Office Depot at 76 and OfficeMax at 75. The difference-maker in the office supply category was price, and Staples scored better than its rivals for the price element of the retail web site experience.  
  • While video rental is not typically associated with holiday retail, Blockbuster and Netflix were still two of the highest revenue e-retail web sites on the internet. Netflix is online only, so Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) still beat Blockbuster (76) in two very important categories: price and web site functionality.  
  • In the battle among PC manufacturer web sites, Apple (82) continued to dominate Dell (76) and HP (78). Apple defies conventional wisdom because it achieved the highest customer satisfaction despite scoring below its rivals on perception of price. However, Apple scored much higher than the others for web site functionality, which was the most important driver of customer satisfaction for all three web sites.

Interestingly, those companies with higher customer satisfaction also had better scores for desired likely future behaviours - such as brand commitment, likelihood to purchase, and likelihood to recommend - which is consistent with the ongoing finding that satisfaction is a key driver of future consumer behaviour.

The full report has been made available for download from ForeSee Results' web site. The annual index uses the patented methodology of the American Customer Satisfaction Index (ACSI), which was developed at the University of Michigan and is a proven predictor of consumer spending.

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