FREEDyourMind

UK E-Retailers: Best and Worst of the Christmas Season

Our annual study of satisfaction with the top 40 e-retailers in the UK is out today (the Top 40 in the US will be out next week on 12/28), and the findings are pretty interesting.

First, customer satisfaction is up for the fourth year in a row, to an all-time high for the UK of 73, a slow but steady increase over the last five years.

It's also interesting to take a look at how the individual companies did. We see a really wide range of performance among UK e-retailers--there is a notable 24-point gap between the highest-scoring e-retailer (Amazon.co.uk, 85) and the lowest (London2012.com, 61).

The last quarter of the year is the most important time of the year in e-retail in both the US and the UK– especially this year during such a tumultuous economic period. The last few months of 2011 and early 2012 will could make or break many retailers.  One way to look at it is that e-retailers have a unique opportunity to acquire new customers for years to come, strengthen relationships with existing ones and make a significant difference to their bottom line.

One of the best ways to increase success is by improving the customer experience, which results in increased sales, loyalty, and positive word-of-mouth recommendations. Understanding customer needs and expectations is critical for retailers to continue to survive and thrive in an increasingly competitive and winner-takes-all business environment.

Online Banking in the UK

We've been studying satisfaction with online banking in the U.S. since 2003, and this year we did our first study of customer satisfaction with online banking in the UK. For this study, we did more than 1000 customer surveys of customers of the top 5 consumer-oriented retail banks in the UK: RBS, Lloyds, Barclays, HSBC, and Santander. 

Despite 2+years of tumult in the global banking industry, customer satisfaction with online banking in the UK is fairly high, and customers are very satisfied with the top five banks (on aggregate they score 80 – generally considered the threshold for excellence on the study’s 100-point scale). Within the top five banks, the range of scores varied from 77 at the lower end to 82 at the high end indicating close competition between the top banks.

This surprised me--how can satisfaction be so high when so many banks and financial markets are in trouble? I think the answer lies in the online channel. Banking websites still have an amazing ability to connect with and satisfy customers even  faith is not high overall. Customers are able to have a satisfying and fulfilling online banking experience despite what's going on in the markets. This is great news for banks, because it means there is a channel that works and works well.

We can't compare satisfaction year-over-year in the UK (yet), but we can compare between UK and U.S. In other industries we study, there are much larger gaps in satisfaction between the U.S. and UK markets, but in online banking, it's only 3 points (this is comparing top 5 UK banks to an aggregate of satisfaction with all U.S. banks).

 

Another way to get some context around the number is to compare online industries. The next chart shows how satisfaction with online banking compares to satisfaction with online retail, both in the UK. You can see there is quite a gap, and where satisfaction is higher, financial returns are higher.

 

 Other key findings:

• Adoption of mobile banking is slow. Of survey respondents with a mobile phone, only 15% are aware of mobile banking apps or mobile sites for their bank (by my count, only 2 of the top 5 banks in the UK even havean m.mobile site--Barclays and HSBC--and even those do not appear to have apps. The other three (Santander, RBS, Lloyds) don't have either. Whatever the reason, only 10% of respondents are using their mobile phone to bank.
• UK customers prefer to hear from their bank through the post. When asked their preference for communications from their bank, 42% said they prefer post, 38% prefer email, 11% prefer the website, three% want text messages or mobile alerts, and only five% said they don’t want any communications at all.
• UK customers are not inclined to get social with their banks.When asked if they would like to friend, follow, or like their bank on social media sites like Facebook, 97% said no.
• There is a clear relationship between satisfaction and frequency of website usage. Customers who access their banking website roughly once a month report satisfaction of 71, while customers who access their banking website more than once a day report satisfaction of 89. 
• UK customers prefer the website to other channels by a huge margin. When asked which channel they are most satisfied with, 70% said the website (17% said the branch, 10% said the cashpoint, two percent said the call centre, and one percent said mobile banking).

Feel free to use these infographics or leave questions in the comments.

Amazon in UK tops in satisfying their customers

 
At ForeSee Results we just released our 4th annual UK E-Retail Satisfaction Index, measuring the top 40 UK retailers.  We surveyed nearly 10,000 UK consumers that visited the most successful UK e-retailers during the holiday season. 

Some of the key findings

• After a huge year-on-year increase in online customer satisfaction from 2008 to 2009 (from 67 to 71 on the study’s 100-point scale), satisfaction with the top 40 UK e-retailers not only held onto the gains achieved last year but increased another point in 2010 to 72.

 

• There is a notable 23-point gap between the highest-scoring e-retailer (Amazon.com, 84) and the lowest (RyanAir, 61). In the analysis we see that the largest retailers have the highest satisfaction. In fact, the average satisfaction of the top 10 e-retailers (in terms of traffic) is 77; while the average satisfaction for the rest is a 71, a gap of six points.  The best are getting better, while the rest are falling behind. The good news for the smaller players is that customer experience is something that can be improved. Smaller retailers can easily level the playing field and compete with larger retailers if they focus on improving the things that matter the most to their customers.  
• Amazon held the top two spots.  Yes, you heard me right.  Amazon.com scored 84, followed by Amazon.co.uk at 83.  The only other e-retailer that scored above 80 was Play.com at 81.  Over the years 80 has become the bar for top performing sites to be measured against.  John Lewis and Marks & Spencer round out the top 5 with scores of 78.   

 

Why do we care about satisfying our customers?  In today's economy satisfying your customers is more important than ever.  Consumes will go where they are satisfied.  The competition is high and the switching costs for consumers is low.  And the data validates this.  A highly satisfied shopper in the UK says they are 56% more likely to purchase from the retailer the next time they are looking for similar merchandise (a great measurement of loyalty) and 69% more likely to recommend the e-retailer to others. 

 

You can get the full report here.

Next week the US E-Retail Satisfaction Index will be releasead.

 

Happy Holidays!

 

 

 

 

 

 

 

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.