Top 40 US retailers under-utilising online channel

WM Circle Logo

By: Wise Marketer Staff |

Posted on June 7, 2005

Despite strong increases in online consumer spending, a new study shows that many of the nation's top retailers are performing well below their potential online and may be inadvertently driving away some people who would otherwise make purchases.

The survey, from ForeSee Results and FGI Research, revealed that traditional bricks-and-mortar retailers are, in general, dramatically under-utilising the online channel. Most companies measured in this category - with the noteworthy exception of Barnes & Noble, an online star - have a huge gap between likelihood to buy online versus offline.

The study is based on surveys of consumers who browsed the 40 highest-grossing e-retail sites, and scores and ranks web sites on the basis of how well they are delivering the kind of experience that site visitors want. Falling short in this area can cause web site visitors to spend their money elsewhere and, in some cases, the sites were found to actually negatively affect future offline spending with the same brand. Netflix, Amazon, and QVC are the stand-out performers in satisfying site browsers. Costco and Kmart are at the bottom of the pack.

Untapped potential
According to Larry Freed, an online satisfaction expert and CEO of ForeSee Results, "A low satisfaction score means that there are lots of browsers who do not become buyers," Freed explained. "Of the five top-scoring e-retailers, likelihood of browsers to take the next step and make an online purchase is 36% higher than those at the bottom of the list. There is huge untapped potential for companies like Costco. People love Costco, but they don't like what they find online and so how much they shop there is very limited."

Experience matters
"Among online shoppers, the Internet has not become as price-sensitive a channel as expected," said Freed. "In many cases, companies that are competing primarily or largely on price are competing on the wrong thing. Our study shows price matters some of the time but key aspects of the site experience matters 100% of the time - literally 100%. Navigation, selection, all kinds of other things are what's driving the buy decision, but many of the online retailers have not isolated the right factors to drive purchasing behaviour."

The full list of companies measured, along with their scores, is available from the ForeSee Results web site (click here).

For additional information:
·  Visit ForeSee Results at
·  Visit FGI Research at