Which E-Retailers Satisfied Shoppers Best?

I'm back from sunny Mexico to snowy Michigan, but came back to some great press coverage of our annual holiday study of how the top 40 online retailers fared.

I think CNET said it best: "With the nation on edge, you might assume that every Internet retailer worth their salt would have extended red carpet treatment to shoppers during the traditional end-of-year shopping rush. Wrong assumption."

That's right: even though we're in a recession, even though numerous analysts predict that some retail chains will have to close their doors forever as a result of this holiday shopping season, still nearly 40% saw their satisfaction scores decline year over year. Only a quarter improved. It's kind of mind boggling, given the stakes: the research shows that a highly satisfied online shopper is  73% more likely to make a purchase online, 38% more likely to purchase offline, and 75% more likely to recommend than a dissatisfied website shopper. That's money in the bank for a troubled retailer.

So here are some highlights:

The Leaders: Only two of the measured websites scored over 80, usually considered the “top performer” threshold for U.S. e-retailers.

• Amazon (up two points) ties Netflix (down two points) for the top spot this year, both with a score of 84. These two industry giants widened their lead over all other retailers significantly in terms of online shopper satisfaction. Last year, Amazon came in second (behind Netflix) and was in a tight pack of six retailers all within a four-point range. It’s remarkable and admirable that such a clear industry leader is not resting on its laurels and is constantly striving to improve the customer experience. Because satisfaction is predictive of financial success, it's no surprise that Amazon is reporting better financial results than the rest.
• Rounding out the list of top-tier online retailers are QVC (down one point to 79) and a tight pack of e-retailers all at 78: Apple (down one point), Barnes &Noble, L.L. Bean (down two points), Newegg (up one point), and Wal-Mart (up four points).

The Most Improved: Ten sites improved year-over-year.  The most notable increases were:

• HP Home and Home Office Store (up five points to 76)--HP sees a strong increase, despite a struggling economy and extremely competitive PC environment. HP is firing on all cylinders and seems well positioned to continue their rise. They could even one day be the leader in the PC world, making the conflict between Apple and Microsoft irrelevant.
  
• Wal-Mart (up four points to 78). Wal-Mart is climbing fast—four points in one year and five points since 2006. Their value model clearly plays well in this economic environment, so a key challenge for them will be whether they can retain customer loyalty when the economy improves.
• Staples (up four points to 77)
• Target (up three points to 75)

The Largest Declines: About two out of five of the measured sites saw their scores decline: 15 of 37 saw lower satisfaction scores in 2008 than they did in 2007. The largest declines were for:

•  HSN—Home Shopping Network (down seven points and more than 9% to 69)
• Gap (down 5 points to 69)--Gap slips, despite making major changes to checkout so that customers can shop across four brands in one session with one shopping cart. On the surface, it seems like an idea that might be good for business. However, this feature may not have been important to Gap’s online customers to begin with because they may view the other brands differently in terms of price, quality, and style. Our findings indicate that the functionality of their website is critical to their shoppers’ satisfaction, so they may need to revisit exactly which changes would benefit their customers’ web experience most.

The Laggards:  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: Gap, HSN, Circuit City, Home Depot, Neiman Marcus, and Overstock.

Download the full report here. What were your experiences this holiday shopping season?

Comments

[bed comforters sets]

he annual list of top online holiday retailers is in, and there are almost no surprises at the top. ForeSee Results and FGI Research compiled the list of 40 retailers with the best customer satisfaction over the 2008 holiday season, using the Univ. of Michigan's American Customer Satisfaction Index's 100-point scale.

[Double wide homes]

Online retailers Netflix Inc., QVC Inc. and Amazon.com Inc. do the best job of satisfying visitors to their Web sites, according to a ForeSee Results Top 100 Online Retail Satisfaction Index, released Friday.

[Used outboard motor]

good job, I have had an idea like this in the works for several years. You have done a great job with the groups, and profit sharing, good call.