Although overall customer satisfaction is high, several companies are lagging as consumers' expectations continue to increase on a yearly basis.
Posted Jun 1, 2007
Video rental specialist Netflix and TV shopping channel QVC are doing the best job satisfying their site visitors, according to an index of the top 100 online retailers released today by ForeSee Results. The twice-yearly index, based on surveys of 20,000 consumers who visited the sites, ranked the Web sites of Netflix and QVC as the kings of e-commerce customer satisfaction with scores of 85. Both were followed closely by booksellers Amazon (83) and Barnes & Noble (82), and pet supply retailer Drs. Foster and Smith (81). Other customer favorites included LLBean (79) and Apple.com (79).
At the bottom of the ForeSee Index were computer electronic vendors PCMall and PCConnection, with scores of 67. Other well-known names included Home Depot (69), Lowes (70), and BestBuy (71). "In most cases, these sites aren't getting worse," says Larry Freed, CEO and President of ForeSee Results. "Consumers' expectations are getting higher."
The problem, Freed explains, is that a company's Web site is competing with all Web sites, not just those limited to the company's competitors. "It's what makes the online environment a unique one," Freed says. "If I walk into a brick-and-mortar establishment, my expectations a few years later are the same, but that's not the case on the Internet. The expectations of consumers are increasing every year and they're being set by the channel, not by a single company or Web site."
The report also found that, despite the popularity of the Web, online and multichannel retailers have the opportunity to increase conversions through the Web channel. According to the report, 23 percent of survey respondents hadn't bought from a given retailer in the past year and 38 percent hadn't purchased from the retailer's Web site in this timeframe. Additionally, customers who bought online five times in the past year were 19 percent more satisfied than shoppers who had never bought from the company online.
This trend also leads to brand loyalty, as the top performing sites scored 14 percent higher in brand loyalty than the bottom performing sites in this metric (83 versus 73). "It magnifies the importance of satisfaction with the online shopping experience on the future growth of the brand," Freed says. Even when multichannel shoppers prefer purchasing offline, they often consult the retailer's Web site prior to purchase, which strengthens the argument that the Web site experience is a critical part of a broader multichannel strategy. "A perfect example of this is consistency of product offerings," he says. "There's nothing more annoying than eyeing a product online, then driving to the store to find out they only sell it on the Web."
This trend also highlights how unimportant pricing and free shipping is to an online consumer. Of the four areas of customer satisfaction measured in the survey--pricing, shopping experience, brand, and merchandise--pricing is consistently the lowest priority, according to the report. "Making the shopping experience more pleasurable will far and away lead to more loyal and happy consumers than low pricing will," Freed says. He expects free shipping to become the standard in coming years. "Retailers are realizing the lower operating costs, and thus higher profit margins, from selling online can allow them to do this. After all, a store doesn't charge you for the shipping and warehouse costs associated with stocking the items. Retailers will start to step up."
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