FREEDyourMind

Just in Time for Spring, E-Retail Blossoms

Poetic title, right?

We've been doing our Top 100 E-Retail Satisfaction Report for six years now. And the latest installment was released today.  

Overall satisfaction with the top 100 e-retailers rebounded from last year's dip to an all-time high of 78, up nearly 5 points from 2009. That's a lot, especially since not a single one of the top 100 e-retailers scored 69 or lower, which we generally consider the threshold for being a bottom performer. Looks like we may need to come up with a new threshold.

 Since customer satisfaction is predictive of future financial success and even stock prices, this is great news for e-retail. In fact, this study showed that a one point increase in online customer satisfaction predicts a revenue increase of $89 million, on average.

The report is available on our website and has individual scores for all Top 100 e-retailers across a half dozen categories.

I'm still at eMetrics in San Jose today, so stop by and say hello if you haven't already. 

Does anything surprise you about this report? Has your own experience with e-commerce improved over the last year?

American Customer Satisfaction Index (ACSI) Q4 Results Released Today

The American Customer Satisfaction Index (ACSI) Q4 results were released today.  The ACSI was founded at The University of Michigan in 1994 and is the leading measurement of Customer Satisfaction in the world.  And while others may make up acronyms and new gimmicks to try to measure consumer satisfaction, the ACSI is the only measurement that has the financial evidence behind it that proves its accuracy, reliability and precision.  And the only methodology that stands up to peer review and has the respect of Economists and Researchers around the world.

Fourth Quarter ACSI Results:  The fourth quarter results cover some very important sectors: Retail, Finance and E-Commerce.  Overall, the ACSI dipped by 0.1% to a 75.9, just 0.2 off its all time high and 0.2 above the Q4 2008 results.  Very impressive results considering the still difficult economy.  These results do not hurt the economic outlook and give us confidence that the economic recovery has a very good chance of continuing on its current pace. 

E-Commerce Key Findings (for the full report check out www.ForeSeeResults.com )

• Satisfaction with e-commerce is up nearly 2% since last year to 81.4.
• The increase in the overall e-commerce sector score is clearly driven by the rebounding online brokerage industry, up 5.4% to 78, with Fidelity and Charles Schwab sharing the top spot with a score of 79.
• The e-retail industry, always the strongest within the e-commerce sector, gains one point to a score of 82 and Netflix takes the top spot.
• The online travel industry ties its all time high aggregate score of 77, not seen since 2005.  Expedia holds the top spot.

Retail Sector: Customer Satisfaction with the retail sector, which includes department and discount stores, specialty retail stores, supermarkets, health and personal care stores and gas stations rose 1.3% to a score of 76.2.  Department and discount stores climbed 1.4% to an ACSI score of 75.  Some notable results include Target up 4% to a score of 80.  Specialty retailers rose 1.3% to a score of 77, with Barnes & Noble leading the way with a score of 84. Supermarkets remained unchanged with Publix continuing to lead the way with score of 86, up 5%.

Finance & Insurance:  This sector improved 1.4% to a score of 77.1, with Banks coming in with a score of 75 and Credit Unions registering 84.  Life Insurance rose 1.3% to 79, Health Insurance went up 2.7% to 75 and Property & Casualty Insurance dropped 1.2% to a score of 80.

You can find out more about the American Customer Satisfaction Index at www.ForeSeeResults.com and TheACSI.org

Summary

So, why is Customer Satisfaction important?  Well, as a leading economic index, the ACSI is unmatched.  And for individual companies an accurate measurement of customer satisfaction can give you the intelligence you need to make the right decisions to optimize your investments.  Consumers go where they are satisfied, so to win in the ultra competitive environment we live in today, companies must satisfy their customers or they face the risk of not surviving.

Social Media Strategy for Retailers

Get a Facebook page!

Okay, so that's not so much a strategy, really more of a tactic. But research we released today clearly shows the value of a Facebook page to retailers. Among our key findings:

• Facebook is, by far, the best place to reach shoppers—both because it’s where they already are, and it’s where they want to hear from retailers.
• 56% of shoppers to top e-retail websites who interact with social media websites have elected to "friend" or "follow" or "subscribe" to a retailer on a social networking site like Facebook, Twitter, and YouTube
• Customers mainly interact with retailers on social media sites to learn about products and promotions (rather than for help or technical support)—a marketer’s dream come true.
• Half of the top 100 retailers have a lackluster or nonexistent social media presence. If you can't find a retailer's Facebook page by going to Facebook and searching for their name, or if they are a top 100 retailer and have fewer than 10,000 fans... they aren't maximizing the value of this marketing opportunity.

Your customers want to interact with you! Make sure you're giving them what they want and that they can find you. And make sure you understand the needs of YOUR customers rather than industry trends (you know, like the one we're reporting in this research), because we see huge differences in preference and satisfaction from one retailer to the next.

Satisfaction with Top UK E-Retailers Surges

We've just completed and released our analysis of satisfaction with the Top 40 e-retailers in the UK, and it's great news: satisfaction increases across the board. Since satisfaction calculated using the scientific methodology used in this study predicts sales, loyalty, and even stock prices, this is great news for many top UK e-retailers. Get the full report and full list of 40 measured companies on our website or read about it in V3.

• Aggregate satisfaction with top UK e-retailers is 71 on the study’s 100-point scale, up 4 points and an incredible 6% from last year’s aggregate score of 67). This increase is made all the more notable by the fact that it occurred during a global recession. 
• Amazon continues to lead the Index with a score of 83, the only e-retailer in the UK to score above 80. Play.com (79) and QVC.com (78) rounded out the top three performers in the UK.
• Websites for Debenhams, M&M Direct, John Lewis, and WH Smith have seen the greatest increases in satisfaction since last year; all four registering year-on-year increases of 13% or more.
• 15 of the 40 measured UK e-retailers registered scores of 69 or lower, generally considered to be bottom performers who are risking erosion of market share and sales if improvements are not made. Ticketmaster UK and B&Q had the lowest scores in the Index (both at 65). Dixons, Currys, Freemans, and Littlewoods did only slight better but still fall to the back of the pack. (all at 66)

The report goes into my theories for why the increases are happening, but its clear that both the industry and UK shoppers have made leaps and bounds this year, and I expect it will be a very merry Christmas for many on this list.

Two caveats 1) we've seen in both the UK and the US that the best are getting better while most of the rest are getting worse. This theory/prediction is confirmed by our data, Comscore data and other post-mortem analysis of the holiday season.

We're releasing our US Index tomorrow with scores for the top 40 US retailers...keep an eye out.

A Disappointing Green Monday

Today we released the third weekly e-retail benchmark we've done this holiday season, and satisfaction is still down from last year.

Satisfation with online shopping in November? Down every week, across the board.

Satisfaction on Thanksgiving Weekend? Down 3%

Satisfaction on Cyber Monday? Down 4%

Satisfaction the week after Thanksgiving (11/30-12/6)? Down 3%

Satisfaction Dec. 7-13? Down 3%

Satisfaction on Green Monday? Down 4%

Meanwhile, Comscore has adjusted their predictions to 4% YOY (up from 3%, based on a record-setting week last week.) That's still pretty disappointing, given the low levels we're starting from last year. Some analysts were projecting YOY increases in the 7-9% range, and the satisfaction data tells us we just won't see it. I'm looking forward to the Comscore data on Green Monday--they're predicting it will turn out to be the heaviest online shopping day of the season, maybe of all time, but won't release their data until later in the week.

Anyone else want to go out on a limb and make any predictions?

Online Holiday Spending Continues to Limp Along

Another lackluster week.

Another week come and gone, one week closer to the end of the holiday season and the latest Online Holiday Spending results from Comscore released today.  For the week ending December 11th, online holiday spending was up 4% from last year.   For the current holiday season, online spending is running 3% up from last year (Nov 1 - Dec 11).

2008 was a tough year as we all know, and Comscore last year reported a 3% decline in 2008 from 2007 online holiday spending levels.

Half full or half empty?

So how should we feel about a 3% increase for the current holiday season compared to a 3% decline from last year?  A 3% increase is not a decrease and some may say flat is the new up,  And if just look at those two reference points we would fell pretty good.  However, if we go back to 2007, we saw a 19% increase in online holiday spending from the prior year.  As we saw last week, consumer's satisfaction with online retail sites is down significantly from last year.  And looking further into the situation, we see the same trend we saw last year - that we are seeing a further separation from the high performing sites and the rest of the pack. 

Here comes Green Monday

Green Monday is the last Monday of the holiday season where you can still use ground shipping and get it there by Christmas, and usually with free shipping.  Over the last few years this has been the largest online holiday spending day of the season.  Well, Green Monday is here tomorrow.  And we are anxiously awaiting the results.  Not only of the dollars spend but also how well consumer's needs are met - in other words, their level of satisfaction.

What do you think ?

Is the glass half full or half empty - should we be happy with the 3% increase in online holiday spending?

Will Green Monday give us a big boost this holiday season ?

Online Holiday Spending - A Disappointing Increase So Far

Last week we reported that consumers satisfaction with online retail was down from last year.  Now there were significant increases in online spending over the holiday weekend, compared with last year, with Comscore reporting an increase of 10% on Thanksgiving day, 11% on Black Friday and 5% on Cyber Monday.

Last week we (ForeSee Results) suggested that the decrease in satisfaction did not bode well for the future and caused us concern, further suggesting - "While we should see a modest increase in online sales overall this year, it will be the retailers who are satisfying customers online who will reap the true rewards".

The holiday season seems to be playing out as we expected.  Comscore reported on Sunday that for the period from November 1 through December 4th online sales were up only 4%.  Still an increase, but far less then what we were seeing through the promotion driven holiday weekend.  They went on to further report that the top 25 online retailers were up 13% from November 1-30 compared to a decline of 10% by smaller retailers.  Now, there are not a lot of details as to who is in the top 25, etc., but we know one thing for sure.  Amazon, who has traditionally excelled in satisfying its consumers, is the biggest online retailer by everyone's standards.  What we saw last year in our research and are expecting to play out again in this year's holiday research is the strong get stronger and the weak struggle to survive.  Those that satisfy their customers will gain market share...and those that don't will suffer.

I am excited to see the results of consumer satisfaction with online retailers from last week to see how the rest of the holiday season will play out.

Now a couple of questions for you.

• What are your online spending levels compared to last year?
• Are you doing more of your online shopping at the "big and best" online retailers?

Satisfaction Down on Cyber Monday

Our first 2009 holiday benchmark shows some cause for concern: online satisfaction with e-retail on Cyber Monday is at its lowest level in four years.

Why is this troubling? Because the ACSI methodology used to conduct the survey predicts future financial success and links satisfaction to likelihood to purchase online and offline. I'm seeing online retail forecasts ranging a 3% increase to an 8% increase, with a few outliers suggesting higher or lower.

We know sales were up on Cyber Monday--higher than last year and higher than Black Friday. But satisfaction was down. Does this mean people are buying early to take advantage of discounts, or do you think we'll see a strong and robust online holiday shopping season? 

Holiday Predictions

Well, Thanksgiving dinner is over and as I sit here, after having eaten way too much Turkey and way too many deserts, it is time to ponder the online holiday season that is just minutes away from kicking off.  Actually, it seems in many ways it has already started.  Things used to be simple...and defined.  We had Black Friday and Cyber Monday.  But now, many retailers have turned this week into "black Friday week" with aggressive discounts all week long.  I remember reading an article a while back where many prominent retailers said there wasn't going to be the deep discounting that we have seen during prior holidays.  We will see if they can hold out.  From the looks of things so far, I doubt it.

All of us that work in and around e-retail are being asked about our predictions for 2009 holiday sales online. Here are my predictions.

Overall, I’m cautiously optimistic and think sales will be up. And I say that for a few reasons.

1. Everyone’s being a lot smarter about inventory, and e-retailers always have a leg up when it comes to inventory because they can leverage so many different warehouses, while a brick and mortar store has more limited inventory. Those who have bought well will do better both online and offline, but the lack of inventory offline will help online retailers this year.

2. H1N1 paranoia will send more people online to do their shopping. What better way to avoid nasty germs (except for those in your own house or office...and of course those computer viruses) than by shopping online?  That reminds me of a story about my grandmother.  Thanksgiving seems like a good time for a story.  Many years ago, back in the mid to late 80's, when we first started hearing about computer viruses there was a widely publicized computer virus.  At that time I was working in technology at National Bank of Detroit.  My grandmother calls me and is all worried, wondering if I am sick.  She was even ready to bring me some chicken soup.  I told her I wasn't sick, and she said, "but I heard on the news about that awful computer virus and I know you work with computes all day".  Aren't grandmothers great!

3. For the first time last year, we saw price had a big impact on satisfaction. In previous years, it was interesting that that despite e-retailer’s assumption that people cared only about price, there were actually other elements of the online shopping experience that impacted them more. We were able to find this out using the powerful technology of the American Customer Satisfaction Index (ACSI) and prove it to be true with the data.  But last year, with the recession, we saw that change and price became a key driver of satisfaction. Retailers are jumping on discounting early and they know they need to slash prices to attract customers.

4. Recession fatigue. We’ve been in this recession for more than a year. Those of us that have jobs who have been saving money and watching spending may be tired of being so careful and may be a little more willing to spend money this year.  Maybe some of the pessimism is finally lifting. I wouldn’t say we’re jumping for joy, but maybe we’re hopping for mild excitement.  And what a better time to show that mild excitement then during the holiday season.

5. When we look at years of satisfaction trending data, we see that customers are as satisfied today as they were six months ago and a year ago, after sat took a huge dive last September. Since satisfaction as measured by the ACSI is predictive of online and offline purchases, if satisfaction is keeping steady into a Christmas season, we would expect to see sales go up this holiday season.

So what are your predictions?

The ROI of Customer Satisfaction: Royal Canadian Mint Case Study

Big thanks to Robb Collins from the Royal Canadian Mint, Bill Zujewski from ATG and our own Kevin Ertell for the great webinar last Tuesday. Royal Canadian Mint shared a case study about how they use voice of customer analysis to build the business case for a redesign and adoption of an improved e-commerce platform. The improvements led to a 22% increase in online revenue and a 25% increase in customer satisfaction during one of the toughest holiday seasons in years.

If you couldn't make the webinar, you can watch the recording.

It's definitely worth a look if you're thinking about how to invest in areas of your website with the most ROI and how to measure the impact of the website on multichannel sales. 
 
Would love your feedback if you were able to attend or watch the recording after the fact.