Customer Satisfaction Index on Top 40 E-retailers

ANN ARBOR, Mich., Dec. 28, 2011 /PRNewswire/ – Customer experience analytics firm ForeSee today released the results of their annual Holiday E-Retail Satisfaction Index, showing that after seven years spent jockeying for first place in the Index, Amazon and Netflix are headed in divergent directions.

Amazon climbed two points to score 88 on the study’s 100-point scale, registering the highest score from any retailer in 14 consecutive studies. Meanwhile, Netflix’s well-publicized blunders caused its customer satisfaction to plummet by seven points and 8% to 79. After years of being separated by a point or two, Amazon and Netflix, which are increasingly in direct competition as Amazon expands into streaming video and rentals, are now separated by nine points in terms of satisfaction, a gulf that may be too wide for Netflix to overcome anytime soon.

Today’s report provides the first scientific quantification of customers’ experience with Netflix since its missteps earlier this year. With its satisfaction decline, Netflix has gone from satisfaction superstar to merely average, matching the Index’s aggregate score of 79 (up one point from 78 in the 2010 holiday shopping season). Netflix saw scores drop in every single element of the website that ForeSee measures, including site content, site functionality, merchandise, and prices.

Since 2005, the average customer satisfaction score for the Index has increased from 74 to 79. A score of 80 has always been the standard for excellence; given the causal relationship between satisfaction and financial success, it is not surprising that most of the sites receiving the top 40 largest revenues according to Internet Retailer also have very high satisfaction scores. Any retailer scoring below average risks eroding loyalty, recommendations, sales, and market share to competitors who score higher, so even the Top 40 need to improve to stay at the top of the heap. If satisfaction drops significantly, a revenue drop is likely to follow.

KEY FINDINGS

The report includes individual satisfaction scores for the 40 top e-retailers (see chart below) for the past seven years, allowing for comparisons over time and between companies:

  • Next to Netflix, both Gap.com (down 6% to 73) and Overstock.com (down 5% to 72) have the largest declines in satisfaction, leaving them with scores at the bottom of the Index.
  • On the other end of the spectrum, the largest gains in satisfaction go to TigerDirect.com (up 8% to 79) and JC Penney (up 6% to 83), which named Ron Johnson, former head of Apple’s retail operations, as CEO this year.
  • Price matters less: American consumers were less price sensitive during the 2011 holiday shopping season than they were last year
  • Nearly 20 years of research coming from both academia and the private sector indicates that increasing customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations. The report quantifies the impact of satisfaction on these desirable customer behaviors

For further results of the study, and a full listing of the top 40 e-retailers visit http://www.foreseeresults.com/news-events/press-releases/us-e-retailer-winners-and-losers-holiday-season-2011-foresee.shtml

Leave a Reply