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According to the annual report from ForeSee Results, a provider of online customer satisfaction measurement, Amazon and Netflix continue to delight holiday shoppers online while customer satisfaction with websites for Circuit City, Gap, Home Depot, HSN, Neiman Marcus, and Overstock fall below industry standards.
The annual Top 40 Online Retail Satisfaction Index from ForeSee Results and FGI Research uses the patented and predictive methodology of the University of Michigan's American Customer Satisfaction Index (ACSI) to examine how successful the top 40 retail websites are at encouraging loyalty and purchase intent. All 40 websites are rated on a 100-point scale (a full list of scores is included at the end of this release). The study found that a highly satisfied online shopper is 73 percent more likely to purchase online, 38 percent more likely to purchase offline, 75 percent more likely to recommend than is a dissatisfied website shopper.
"In a recession, knowing that improving customer satisfaction with your website can engender that kind of loyalty and purchase intent is like money in the bank," said Larry Freed, President and CEO of ForeSee Results. "But too many e-retailers are ignoring this crucial metric, and it shows in the results of our study. Only two of the 40 measured e-tailers scored above 80, and more than a quarter scored 70 or below. Nearly 40 percent saw satisfaction drop year-over-year. That's just not playing to win in this economy."
Highlights of the report include:
- The only two e-retailers scoring above 80 on the study's 100-point scale (generally considered the threshold for excellence by the ACSI) are Amazon and Netflix, both at 84. QVC was a distant third at 79. Not surprisingly, Amazon just reported its best ever holiday season. "Amazon is setting the bar for online retail satisfaction and sales, and I expect they will have better financial results than the rest," added Freed.
- Only 10 websites improved online shopper satisfaction since last holiday shopping season, and the most improved are Wal-Mart.com (+5 percent to 78) and HP's online store (+7 percent to 76). Other top gainers include Staples (+6 percent to 77) and Target.com (+4 percent to 75).
- Forty percent of the measured sites saw satisfaction decline year-over-year. The largest declines were for Home Shopping Network (- 9 percent to 69) and Gap (-7 percent to 69).
- Retailers scoring 69 or lower are less successful at satisfying shoppers, which can erode loyalty while missing out on a tremendous opportunity to leverage the web channel to improve the bottom line. Six e-retailers scored 69 this year, and five of the six had lower scores in 2008 than in 2007.
- Prices are a key element of satisfaction for many individual websites, but overall, improvements to merchandise and functionality will have a greater return on investment. "Consumers were expecting big discounts this season, and price was a pretty important factor, but it's not the be-all, end-all for satisfaction, even in a recession," said Freed. "It's much smarter for the long term to improve satisfaction through web experience improvements than erode brand equity through price cuts. The travails of Detroit's Big Three automakers illustrate that point profoundly."
The holiday online satisfaction report is based on a survey of over 9,000 visitors to the top 40 e-retail websites according to sales revenue as reported by Internet Retailer's Top 500 Guide. Survey responses were collected FGI Research's Smart Panel. The study measured satisfaction among shoppers who visited the site, regardless of whether or not they ultimately executed a purchase online, which provides insight into the performance of retail websites as research and purchase channels. ForeSee Results used the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI) to determine the scores. The ACSI is the national standard for customer satisfaction and has been proven to have a direct link with stock prices and other measures of financial performance.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
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