Customer Satisfaction Study Predicts Merry Outlook for Some Top E-Retailers; Others Will Struggle in 2009

ANN ARBOR, Mich.--(BUSINESS WIRE)--A study of customer satisfaction with top retail websites during the holiday season is shedding light on which online retailers will thrive in 2009 and which could have an uphill battle ahead. According to the annual report from ForeSee Results, 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.

“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 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% more likely to purchase online, 38% more likely to purchase offline, 75% 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% 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% to 78) and HP’s online store (+7% to 76). Other top gainers include Staples (+6% to 77) and Target.com (+4% to 75).
Forty percent 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 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.”


Website	Satisfaction 2007	Satisfaction 2008	Point change	% change
AGGREGATE SATISFACTION	74	74	0	0
Amazon.com	82	84	2	2.4%
Netflix.com	86	84	-2	-2.3%
QVC.com	80	79	-1	-1.3%
Apple.com	79	78	-1	-1.3%
BN.com (Barnes & Noble)	78	78	0	0.0%
LLBean.com	80	78	-2	-2.5%
Newegg.com	77	78	1	1.3%
Wal-Mart.com	74	78	4	5.4%
Avon.com	79	77	-2	-2.5%
Staples.com	73	77	4	5.5%
TigerDirect.com	77	77	0	0.0%
Shopping.hp.com	71	76	5	7.0%
JCPenney.com	75	76	1	1.3%
VictoriasSecret.com	N/A	76	N/A	N/A
Target.com	72	75	3	4.2%
Zappos.com	78	75	-3	-3.8%
Drugstore.com	74	74	0	0.0%
Nordstrom.com	74	74	0	0.0%
Williams-Sonoma.com	75	74	-1	-1.3%
BestBuy.com	74	73	-1	-1.4%
Dell.com	74	73	-1	-1.4%
Chadwicks.com	73	73	0	0.0%
1800Flowers.com	71	72	1	1.4%
Blockbuster.com	N/A	72	N/A	N/A
Costco.com	72	72	0	0.0%
OfficeDepot.com	71	72	1	1.4%
Buy.com	70	70	0	0.0%
Macys.com	71	70	-1	-1.4%
OfficeMax.com	68	70	2	2.9%
Sears.com	70	70	0	0.0%
SonyStyle.com	70	70	0	0.0%
CircuitCity.com	73	69	-4	-5.5%
Gap.com	74	69	-5	-6.8%
HSN.com	76	69	-7	-9.2%
Overstock.com	70	69	-1	-1.4%
HomeDepot.com	N/A	69	N/A	N/A
NeimanMarcus.com	72	69	-3	-4.2%

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 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.

About ForeSee Results

As the leader in online customer satisfaction measurement, ForeSee Results captures and analyzes online voice of customer data to help organizations increase sales, loyalty, recommendations and website value. Using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI), ForeSee Results identifies the improvements to websites and other online initiatives with the greatest ROI. With over 30 million survey responses collected to date and benchmarks across dozens of industries, ForeSee Results offers unparalleled expertise in customer satisfaction measurement and management. ForeSee Results works with clients across industries, including: retail, financial services, healthcare, hospitality, manufacturing and government.

ForeSee Results (www.ForeSeeResults.com), a privately held company, is headquartered in Ann Arbor, Michigan and has offices in London and Toronto.

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.