E-retail satisfaction shows tomorrow's winners & losers

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By: Wise Marketer Staff |

Posted on January 8, 2009

A study of customer satisfaction with top retail web sites during the 2008 holiday season has shed a little extra light on which online retailers are expected to thrive most during 2009.

According to the report by ForeSee Results, both Amazon and Netflix delighted holiday shoppers online while customer satisfaction with the web sites of Circuit City, Gap, Home Depot, HSN, Neiman Marcus, and Overstock all fell below the industry average.

The annual 'Top 40 Online Retail Satisfaction Index' uses the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI) to rate (on a 100-point scale) how successful retail web sites are at encouraging loyalty and purchase intent. The company reports that a highly satisfied online shopper is 73% more likely to purchase online, 38% more likely to purchase offline, 75% more likely to recommend than is a dissatisfied online shopper.

Larry Freed, president and CEO for ForeSee Results, said: "Too many e-retailers are ignoring this metric, and that shows in the results of this study. Only two of the e-tailers scored above 80, and more than one-quarter scored 70 or below. Nearly 40% saw satisfaction drop, year-over-year."

Highlights from the study's findings include:

  • The only two e-retailers scoring above 80 are Amazon and Netflix, both at 84. QVC came third at 79. Not surprisingly, Amazon has reported its best ever holiday season.
  • Only ten web sites had improved in terms of online shopper satisfaction since the 2007 holiday shopping season, with the most improved being Wal-Mart.com (up 5% to 78) and HP (up 7% to 76). Other significant gainers included Staples (up 6% to 77) and Target.com (up 4% to 75).
  • Some 40% of the sites measured saw customer satisfaction decline year-over-year, with the most significant declines being seen by the Home Shopping Network (down 9% to 69) and Gap (down 7% to 69).
  • Retailers scoring 69 or lower tend to be less successful at satisfying shoppers, which can erode loyalty while missing out on a real opportunity to leverage the web channel to improve the bottom line. Only six e-retailers scored 69 in the 2008 study, and the scores of five of these had decreased since 2007.
  • Prices are a key element of customer satisfaction for many individual web sites but, overall, improvements to merchandise and functionality produce a greater return on investment.

According to Freed, price is still not the be-all and end-all of customer satisfaction: "It's actually much smarter in the long-term to improve satisfaction through web experience improvements than to erode brand equity through price cuts."

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