Some online retailers will thrive in 2009, while others have an uphill battle ahead, if customer satisfaction with top retail websites during the holiday season is any indication, according to an annual report from ForeSee Results, writes Retailer Daily.
Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) continued to delight holiday shoppers online while customer satisfaction with websites for Circuit City (OTC:CCTYQ), Gap (NYSE:GPS), Home Depot (NYSE:HD), HSN, Neiman Marcus, and Overstock (NASDAQ:OSTK) fell below industry standards, the report said.
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 website shopper, the annual Top 40 Online Retail Satisfaction Index from ForeSee Results and FGI Research found.
The study uses patented predictive methodology of the University of Michigan’s American Customer Satisfaction Index (BATS: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.
“Only two of the 40 measured e-tailers scored above 80, and more than a quarter scored 70 or below. Nearly 40% saw satisfaction drop year-over-year. That’s just not playing to win in this economy,” said Larry Freed, president and CEO of ForeSee Results.
Among the highlights of the report:
- The only two e-retailers scoring above 80 on the study’s 100-point scale are Amazon and Netflix, both at 84. QVC was a distant third at 79. (Amazon just reported its best ever holiday season.)
- Only 10 websites improved online shopper satisfaction since last year’s holiday shopping season, and the most improved are Wal-Mart.com (+5% to 78) and HP’s online store (+7% to 76). Other top gainers include Staples (+6% to 77) and Target.com (+4% to 75).
- 40% of the measured sites saw satisfaction decline year over year. The largest declines were for Home Shopping Network (- 9% to 69) and Gap (-7% to 69).
- Retailers scoring 69 or lower are less successful at satisfying shoppers, which can erode loyalty while missing out on the 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.
Also, prices were a key element of satisfaction for many individual websites; but, overall, improvements to merchandise and functionality will have a greater return on investment, according to ForeSee Results.
“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.”
About the Top 40 Online Retail Satisfaction Index: The fourth annual 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 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.