Not All E-Retailers Had a Happy Holiday: ForeSee Results Reports Winners and Losers

Research Highlights Victors in Website Match-ups: Amazon vs. Wal-Mart; Apple vs. Dell vs. HP; Netflix vs. Blockbuster; Staples vs. Office Depot vs. OfficeMax

Dec 29, 2010, 09:00 ET from ForeSee Results

ANN ARBOR, Mich., Dec. 29, 2010 /PRNewswire/ -- ForeSee Results today released its annual holiday survey showing that while many e-retailers had a holiday to celebrate, customer satisfaction with the top 40 online retailers overall has fallen since last year. The sixth annual ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition) slipped 1% to 78 on the study's 100-point scale(compared to the 2009 holiday season), but is still significantly higher than previous years. The overall decline can largely be attributed to declining scores for some computer and electronics retailers and mass merchants.

"In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices. Our research shows that is not always the case, and that it varies drastically from company to company," said Larry Freed, President and CEO of ForeSee Results. "Retailers are slashing prices this time of year to attract customers, and not all of them need to be doing that."

The report includes individual satisfaction scores with the 40 top e-retailers for the past six years, allowing for comparisons over time and between companies. Amazon, Netflix, QVC.com, Avon.com, LLBean.com, Newegg.com and Apple.com are rated by customers as the most satisfying retail websites, each scoring 82 or higher. Altogether, a dozen retail websites had superior customer satisfaction scores of 80 or higher.

The report found that customer satisfaction has a huge and quantifiable impact on the future success of a website. Highly-satisfied visitors to retail websites say they are 60% more committed to the brand overall, 61% more likely to purchase from the retailer online, 35% more likely to purchase from the retailer offline, and 64% more likely to recommend the retailer than are dissatisfied visitors. Nearly 20 years of research coming from both academia and the private sector indicates that increasing customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations.

"What else can a retailer do between now and next November to make customers 61% more likely to purchase, or even 10% or 20% more likely?" asked Freed. "There are few investments aside from improving customer satisfaction that would have the same impact on sales, loyalty, and recommendations, and result in such targeted, actionable recommendations at both strategic and tactical levels."

The report examined a few notable head-to-head match-ups:

  • Amazon vs. Walmart.com: E-retail giant Amazon (86) and retail behemoth Wal-Mart (80) both have superior online satisfaction scores, but Amazon still holds a significant 6-point advantage.  Amazon beats Walmart.com in three measured drivers, or elements, of website satisfaction: content, functionality, and merchandise, and they are tied on consumers' perceptions of their prices. When it comes to priorities for improvement, neither retailer registers price as a top priority for improvement, which indicates the two may not need to be doing the price slashing we've seen in the last week before Christmas.

  • Staples vs. Office Depot vs. OfficeMax: The three major office suppliers compete closely in terms of satisfaction, with Staples leading at 78, Office Depot at 76, and OfficeMax at 75. The difference-maker in the office supply category is price, and Staples scores better than its rivals for the price element of the retail website experience.

  • Netflix vs. Blockbuster: While video rental is not typically associated with holiday retail, Blockbuster and Netflix are still two of the highest revenue e-retail websites on the Internet.  Netflix is online only. Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) beats Blockbuster (76) in two very important categories: price and website functionality. In this case, improving functionality is more important than price if Blockbuster is going to make any strides toward closing the satisfaction gap with Netflix.

  • Apple.com vs. Dell.com vs. HP.com: In the battle of PC manufacturer websites, Apple (82) continues to dominate Dell (76) and HP (78).  Apple defies conventional wisdom because it achieves the highest customer satisfaction despite scoring below its rivals on perceptions of prices. However, Apple scores much higher than the others in website functionality, which is the most important driver of customer satisfaction for all three websites.

Across all of the analyzed match-ups, the companies with higher customer satisfaction also have better scores for desired likely future behaviors, such as brand commitment, likelihood to purchase, and likelihood to recommend, which is not surprising, since the ForeSee Results methodology shows, time and again, that satisfaction is a key driver of future consumer behavior.

"The holiday shopping season is the time of year that retailers have the most exposure to the broadest spectrum of consumers," said Kevin Ertell, vice president of retail strategy at ForeSee Results. "And because customer satisfaction is predictive, this study is a great opportunity for retailers to see how they measure up to the competition and figure out what they need to do to drive sales well into the next year."

The annual Top 40 E-Retail Satisfaction Index from ForeSee Results and FGI Research uses the patented methodology of the American Customer Satisfaction Index (ACSI), which was developed at the University of Michigan and is a proven predictor of consumer spending.

A table of the full set of historical scores over time is below, and the full report can be downloaded for free at www.ForeSeeResults.com.

Website

Internet Retailer Rank*

Holiday 2005

Holiday 2006

Holiday 2007

Holiday 2008

Holiday 2009

Holiday 2010

Point Change Since Last Year

Point Change Since 1st Year

Aggregate, Top 40 E-Retailers


74

75

74

74

79

78

-1

4

Amazon.com

1

82

84

82

84

87

86

-1

4

Netflix.com

14

84

86

86

84

86

86

0

2

QVC.com

11

80

80

80

79

83

84

1

4

Avon.com

4

75

76

79

77

81

83

2

8

LLBean.com

24

80

80

80

78

80

83

3

3

Newegg.com

12

79

78

77

78

81

82

1

3

Store.Apple.com

33

76

79

79

78

82

82

0

6

eBay.com

NM

NM

NM

NM

NM

NM

80

-

-

MusiciansFriend.com

38

NM

NM

NM

NM

79

80

1

1

VistaPrint.com

36

NM

NM

NM

NM

NM

80

-

-

Walmart.com

6

73

73

74

78

79

80

1

7

Williams-Sonoma.com

26

NM

77

75

74

79

80

1

3

Costco.com

35

69

69

72

72

79

79

0

10

HSN.com

25

75

75

76

69

76

79

3

4

VictoriasSecret.com

18

NM

NM

NM

76

80

79

-1

3

Gap.com

NA

73

74

NM

69

76

78

2

5

HPShopping.com

17

74

78

75

76

78

78

0

4

JCP.com (JC Penney)

16

71

76

75

76

81

78

-3

7

Nordstrom.com

29

NM

74

74

74

79

78

-1

4

Staples.com

2

71

73

73

77

77

78

1

7

1800Flowers.com

40

75

74

71

72

78

77

-1

2

BestBuy.com

30

72

73

74

73

77

77

0

5

Buy.com

34

72

72

70

70

76

77

1

5

Cabelas.com

32

NM

NM

NM

NM

82

77

-5

-5

Target.com

21

70

74

72

75

78

77

-1

7

ToysRUs.com

37

69

71

72

NM

75

77

2

8

Blockbuster.com

10

NM

NM

NM

72

77

76

-1

4

Dell.com

15

74

77

74

74

79

76

-3

2

OfficeDepot.com

5

72

73

71

72

77

76

-1

4

Overstock.com

28

71

71

70

69

76

76

0

5

SonyStyle.com

13

69

73

70

70

77

76

-1

7

Symantec.com (Norton)

22

NM

NM

NM

NM

NM

76

-

-

HomeDepot.com

23

NM

NM

NM

69

NM

75

-

6

Macys.com

20

NM

71

71

70

79

75

-4

4

OfficeMax.com

7

NM

NM

68

70

75

75

0

7

Sears.com

8

68

73

70

70

75

74

-1

6

TigerDirect.com

39

77

76

77

77

80

73

-7

-4

2010 Rank in Internet Retailers' Top 500 Guide, a ranking of the Top 500 online retailers in the U.S. by sales volume. Internet Retailer does not include eBay in its Top 500 guide because eBay is a marketplace rather than an individual retailer. ForeSee Results decided to include eBay this year although they are not officially on Internet Retailer's list.


The following Top 40 retailer sites did not have enough sample size to report a statistically meaningful score: AmwayGlobal.com, CDW.com, Grainger.com, and SportsmansGuide.com



About the ForeSee Results E-Retail Satisfaction Index (US Holiday Edition)

The sixth annual holiday online satisfaction report is based on a survey of nearly 10,000 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 American Customer Satisfaction Index (ACSI) to calculate the scores. The ACSI is the national standard for customer satisfaction, and this measure has been shown to have a direct link with stock prices and other measures of financial performance.

About ForeSee Results

As the leader in customer satisfaction measurement, ForeSee Results captures and analyzes voice of customer data to help organizations increase loyalty, recommendations and marketing value. Using a patented, scientific methodology developed at the University of Michigan, ForeSee Results identifies improvements across all channels and touch points that drive customer satisfaction. With over 55 million survey responses collected to date and benchmarks across dozens of industries, ForeSee Results offers unparalleled expertise in customer satisfaction measurement and management around the globe.

ForeSee Results can be found online at www.ForeSeeResults.com.

About FGI Research

FGI Research is a leading provider of market research and information solutions that improve the speed, accuracy and impact of business decisions. By combining proven research methods, trusted online sample, and advanced analytics and communications, FGI delivers to end users and marketing research firms immediate and actionable information to decision makers throughout their respective enterprises. FGI offers a premier suite of online research solutions under the SmartPanel™ family of specialty and proprietary custom research panels. For additional information, visit www.fgiresearch.com.

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SOURCE ForeSee Results



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