Amazon, Netflix Tops For Holiday Sales Satisfaction

Netflix (NFLX) and Amazon (AMZN) did the best job of pleasing their Web shoppers during the holiday season, according to the "Top 40 Online Retail Satisfaction Index", compiled by ForeSee Results of Ann Arbor, Michigan.  Both were top-ranked last year, too.

A half-dozen traditional brick-and-mortar sellers showed "impressive" gains in pleasing visitors on their online sales sites. Overall, shoppers at the 40 largest online sellers’ sites, as measured by sales volume, were slightly more satisfied this holiday season than last, he added.

"The key is understanding the customer audience," said Larry Freed, president/CEO of ForeSee. "Making the Web site's features and benefits match those of the in-store experience is critical.”

He said major retailers like Sears (SHLD), JC Penney (JCP), and Target (TGT) showed improvement because they learned the Web is a resource for both purchasing and researching items.  Consumers are pleased, for instance, by other customers' comments.  "In a store, you can ask a salesperson if a particular product has performed well or been troublesome," Freed said. "Online, customer reviews perform the same function," and might even be more reliable. He also cited features such as the availability of detailed product specifications, large photos, and online product comparisons which were offered by some of the most successful sites.

Listen to Larry Freed talk about ForeSee Results' Top 40 Online Retail Satisfaction Index results.

Web sites that performed poorly last year, the first holiday season ForeSee studied online satisfaction, performed poorly again this year.  At the bottom of the ladder were CDW (CDWC), CompUSA, and Costco (COST).

"Costco does a great job offline, in the stores, Freed said. "You go in each week expecting to see different products at a great price.  Costco is, not however, replicating that experience online."  CDW was faulted for its pricing and selection.

Freed said he expects more retailers to offer non-holiday free shipping. "When you step back and think what goes into the cost structure of selling an item in a store, there are so many costs avoided selling online. There's probably enough margin to sell it with free shipping, and I think that will be a great step forward for multi-channel retailers because, as a consumer, I’ll be getting a consistent experience online and off line, with delivery or in-store pickup, all at the same price."

Freed's survey included 10,000 shoppers who visited the top 40 retail sites, according to sales volume.  They were asked to evaluate the sites on factors including merchandising, price, brands, and selection. Chart of rankings of online merchants (DMNews.com)

NFLX vs. AMZN vs. SHLD vs. TGT vs. JCP 1-yr chart:

Disclaimer: I own shares of Netflix.