FREEDyourMind

Which Retailers Satisfied Their Customers This Holiday Season?

Well Christmas has come and gone and two questions come to mind.

If you have young kids - how do you get all those toys put together?

And for everyone else, what retailers lead the way in satisfying their customers?

Let's address the second question today (you are on your own for the first one).

This year we measured satisfaction with the top 40 online retailers in the U.S. (get the full report here)

 
Overall, satisfaction was a 74 (on a 100 point scale) down 1 point from the 2006 holiday season.  The downward movement is a bit of a concern, but considering the very tough economic climate this holiday season and the disappointing retail sales, not too bad.  Netflix led all retailers with an impressive score of 86 (even with their score last year), followed by Amazon at 82 (down 2 points from last year).  QVC and L.L. Bean rounded out the top performers with scores of 80.

So who cares if customers are satisfied?  Well, not only consumers, but retailers should care too!  Satisfied customers become long term and loyal customers.  Dissatisfied customers become your competitor's customers. 

Comparing the top performers (scores of 80 and higher) to the bottom performers (scores of 70 and lower) we see that the result of higher satisfaction leads to significantly higher  purchase intent (33%), loyalty (23%), and word of mouth recommendations (26%).  That is the payback for satisfying your customers. 

And this year we also measured the top 30 U.K. online retailers.  This is our first time measuring the U.K. group.  Some of retailers performance was brilliant!  You can get the full report here.

 

The Online Holiday Season Is Coming To A Close

The latest online retail sales figure came out earlier today.  comScore is reporting that more than $26 billion has been spent online this holiday season so far, a 19% gain compared to last year.  While not as strong as last years growth rate of 26%, compared to total retails sales growth this year it is a very impressive number.  Early estimates are for a nearly flat year over year performance in retail spending.  A tough economy has put a significant damper on holiday spending.  Considering the dismal retail spending numbers, online retailers should be happy with the 19% year over year gain.

So...

While not a bad holiday season for online retailers, they cannot stand pat.  There has not been much innovation from 2006 to 2007.  Consumers expectations for online retail continue to go up.  Online retailers need to keep pushing the envelope.  What will be the improvements in 2008?  Here are a few ideas.

• Moving from mulit-channel to merged channel.  Whatever channel a consumer purchases from the experience should be the same.  They should be able to seamlessly move between channels.
• Is it time for free shipping all the time, with no restrictions?  I would challenge multi-channel retailers to determine the true cost when selling an item online vs. offline.  I would be willing to bet that in almost every case it is far less costly online, even if you provide free shipping.  When you factor in the increased inventory carrying costs, increased labor costs, increased facilities/real estate costs, it appears to be a no-brainer to offer free shipping all the time. This will eliminate price as a reason a consumer leaves your website to buy in a store.  This is good for consumers and good for retailers.  As a retailer are you willing to risk an intended customer to be distracted by other's advertisements and on their way to your store they buy from a competitor?  All because they didn't want to pay the shipping charges.
• Real time inventory that crosses channels.  If you truly want to provide that merged channel experience, you better let your consumers know if they are going to go to the store that the product is in stock. I can think of no more frustrating experience then after selecting the item to purchase you go to the store to purchase and they are out of stock.
• Better expectation management by online retailers.  Retailers can better manage consumer expectations by making sure they know when items are out of stock, making sure they know the return policies, etc.  Satisfaction, in simple terms, can be defined as a combination of what you get and what you expect. 

While some retailers are already providing these capabilities, they need to be come the norm for all retailers.  These are only a few things to think about. At the end of the day online retailers must continue to strive for improving the online experience and improving customer satisfaction. Improved customer satisfaction will lead to better financial results.

The ForeSee Results Top 40 Online Retail Satisfaction Index will be coming out in the next day or so.  This is a satisfaction measurement of the top 40 U.S. online retailers during the holiday season using the American Customer Satisfaction Index methodology.  It will be followed by a measurement of the Top 30 U.K. Online Retailer Satisfaction Index.  Check back in the next couple of days for details.

By the way, I was on Bloomberg TV last week, you can see the clip here...Bloomberg clip

 

E-Gov...Slipping a little but still outperforming other channels

For the third straight quarter, citizen satisfaction with federal government websites has slipped and is now at an aggregate score of 72.9, the lowest measured score since 2nd quarter 2005. However, citizens are still more satisfied with e-government than they are with federal government as a whole.

Key findings   include:

• Citizens satisfaction with federal websites is 8% higher than the annual ACSI satisfaction score for federal government as a whole.  This is a testament to the potential of the web channel to help government do a better job of meeting and exceeding citizen expectations.   
• Search remains a top   priority for government sites, meaning that search improvements will drive   satisfaction and loyalty
• Participation in the E-Government Satisfaction Index surged ahead 13% this quarter, demonstrating an increasing commitment of government websites to gauge performance in terms citizen satisfaction.

Check out the latest results at E-Gov Commentary

Ask ... and Listen

Very interesting announcement by Ask.com, introducing a service called AskEraser. 

And what does AskEraaer do?  It allows you to configure your Ask.com searches so that your search activity will be deleted form Ask.com servers.  NY Times Article

Ask.com listened to their customers.  Consumers today are concerned with protecting the privacy of their searches ... and Ask.com listened to these consumers and created an easy to use, easy to find capability to protect the privacy of the data.  Not that I have anything to hide!

Ask.com continues to innovate.  They have added great features to search, definitely worth checking out.  These features should raise the bar for all search engines.

 

For full disclosure, Ask.com is a ForeSee Results (satisfied) customer.  In fact, here is a recent webinar they participated in. Ask.com webinar                Other ForeSee Results Webinars

Not a surprise -- a ForeSee Results customer listening to their customers!

Online doing OK in Tough Holiday Season

According to the latest holiday shopping data, the retail sector is having a tough time, with the lone bright spot being the online retail space.

U.S. retail sales declined 4.4 percent in the week that ended Dec. 1 as fewer shoppers visited stores than a year ago, Chicago-based ShopperTrak RCT Corp. reported. A tough economy, with deep discounting early in the holiday season and no "super-hot" product this holiday season has contributed to a tough holiday season for retailers.

Yet, according to Comscore, Online spending during the week through Dec. 2nd increased 17 percent.  Now that is trailing last year's 26 percent pace, but still respective growth, and pretty consistent with the numbers we have seen online during this holiday season.  For the week ending November 30th we saw online spending increase 18% over last year.

So, while 17% year over year growth doesn't seem like a stellar year, we need to keep it in perspective compared to the broader retail sales struggles.  What would those online sales be if retail sales were even with last year, or even up 3%?   Would we surpass last years online growth?

So far online holiday shoppers have been more satisfied with the online holiday experience then last year.  Our latest results for online holiday shoppers satisfaction for the week end Dec 2nd should be out tomorrow.  Check back for the latest.

Holiday Week 1 is behind us

Well, the Online Retailers got through the first week of our holiday season in pretty good shape.  A few reported performance issues made the news, but no major meltdowns.  How did the first week end up?  From a sales perspective, good but not great.  Comscore is reporting sales $4.06 Billion in online sales for the week ending November 30th.  For the month of November, $13.43 Billion.  So, Cyber Monday, at $733 Million in online sales represents about 18% of the week and about 6% of the month.  Impressive, but not overwheliming. In fact, they are reporting the 3 days following Cyber Monday all resulting in online sales over $700 million.

We reported on Cyber Monday Customer Satisfaction last week, and within the next day or two we will give you an update on satisfaction for the week.  It will be interesting to see if satisfaction continues its trend of outperforming 2006 results.

Online sales were up year over year, 18% for the month of November, 18% for the week following Thanksgiving and 21% for Cyber Monday.  Again, good but not great. 

So why good and not great?  A couple of possible reasons. 

• No super hot product to drive sales early in the holiday season (although Amazon seemed to try to make the Kindle the hot product, but it would appear without major success - I personally know of nobody that has bought one -- and most of the people I know do read).
• Aggressive discounting and free shipping offers.  This will drive sales, but at lower dollars.
• Some major retailers still had performance problems - it might drive you to another site or it might drive you to the store.

We will keep a close eye on satisfaction scores and online sales over the remaining weeks of the holiday season.