Netflix is Biggest E-Commerce Loser as Competition Ramps Up According to American Customer Satisfaction Index

ANN ARBOR, Mich., Feb. 21, 2012 /PRNewswire/ -- Netflix suffers one of the largest drops in ACSI history as e-commerce inches up and competition stiffens, according to the American Customer Satisfaction Index's annual E-Commerce Report, produced in partnership with ForeSee. Customer satisfaction with e-commerce websites is up 1% to 80.1 on the ACSI's 100-point scale, while Netflix plummets 14% to 74, the lowest score of any e-commerce website in the Index.

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"E-commerce continues to shine in satisfaction, seemingly regardless of economic conditions. It is no wonder the sector continues to grow when you consider that satisfied consumers are more likely to increase spending as their means allow," said Claes Fornell, founder of the ACSI. "Satisfaction with brick and mortar retail is also improving, but we may never see it match the scores held by retail websites."

A full analysis of the scores released today is available on ForeSee's website and a table with all category and company scores can be found here: http://photos.prnewswire.com/prnh/20120221/DE55230

Online Retail

Satisfaction with overall online retail climbs 1% to 81, led by an improvement in the "all others" category (+3% to 80), which reflects smaller e-retailers and other companies not individually measured. Amazon (-1% to 86) maintains its spot as the top online retailer in satisfaction, but former champ Netflix suffers a huge drop, placing it firmly in the basement, 6 points below the all others category.

After raising prices 60% and threatening to split its convenient DVD and streaming media rental services into two, Netflix customers left in droves and investors followed suit. The ACSI E-commerce Report, based on surveys collected in the fourth quarter, shows that the remaining customers are much less satisfied. Netflix's DVD customer base is shrinking while streaming media customers continue to grow. This shift could potentially exert additional downward pressure on satisfaction, as Netflix struggles to beef up its streaming media content and DVD releases decline.

"Netflix's fall from grace was predictable given their missteps, but shocking in its degree of severity even though everyone could see this coming," said Larry Freed, president and CEO of ForeSee. "Though they've gained back many of the subscriber losses, it remains to be seen if Netflix will be able to satisfy them enough to keep competitors like Amazon and Hulu at bay. These results suggest that Netflix is vulnerable."

Newegg gains a point, with a score of 85, putting the company in the position of second place and the closest online retailer to Amazon in customer satisfaction. Overstock.com and eBay remain unchanged at 83 and 81, respectively.

Online Brokerage

Customer satisfaction with online brokerage drops 3% to 76. Last year, Charles Schwab led the pack and Fidelity has been a perennial leader. This year, Fidelity (+1%), Charles Schwab (-1%), and E*TRADE (+4%) tie to lead the sector with a score of 79. TD Ameritrade (+1% to 78) is close behind. From 2002 to 2008, E*TRADE was at the bottom of the list of measured companies, but has steadily increased its score over the past four years. 

"Satisfaction is leveling out among the top online brokerage firms though their satisfaction is still ahead of the all others category considerably," said Freed. "E*TRADE is benefiting from its efforts to position itself as the leader in online investment tools and trading in a marketplace where investors and the industry itself have become more tech-savvy and comfortable in the online space."

Online Travel

Customer satisfaction with online travel remains flat at 78, consistent with the category's all-time high set last year. Travelocity (+3% to 79) overtakes Expedia (-3% to 77) for the top spot, which has led or held a share of the industry lead since 2000. Orbitz (+1%) and Priceline (+4%) round out the category with scores of 76.

A free report of the historical e-commerce scores for all companies measured by the ACSI is available at www.ForeSee.com.

About ForeSee

As a pioneer in customer experience analytics, ForeSee continuously measures satisfaction across customer touch points and delivers critical insights on where to prioritize improvements for maximum impact. Because ForeSee's superior technology and proven methodology connect the customer experience to the bottom line, executives and managers are able to drive future success by confidently optimizing the efforts that will achieve business and brand objectives. The result is better business for companies and a better experience for consumers. Visit www.foresee.com for customer experience solutions and original research.

About ACSI

The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States.  Data from interviews with approximately 70,000 customers annually are used as inputs into an econometric model to measure satisfaction with more than 225 companies in 47 industries and 10 economic sectors, along with over 200 services, programs, and websites of approximately 130 federal government agencies.

The Index was founded at the University of Michigan's Ross School of Business and is produced by ACSI LLC.  ACSI can be found on the Web at www.theacsi.org.

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SOURCE ForeSee