Holiday Online Retail: Shopper Satisfaction Down in 2007

Netflix, Amazon, L.L. Bean, QVC Remain Atop ForeSee Results’ Top 40 Online Retail Satisfaction Index

ANN ARBOR, MI (December 27, 2007) - Customer satisfaction with online retail during the 2007 holiday season is down slightly from last year, according to the Holiday 2007 edition of the ForeSee Results Top 40 Online Retail Satisfaction Index.  Aggregate satisfaction with the leading online retailers scored 74 on a 100-point scale, losing 1.3 percent from a year ago, as online holiday sales rose at their slowest pace ever.

“Online shopping is still the bright spot for holiday retailers, but lower satisfaction coupled with slower than expected spending growth puts a little cloud over the season,” said Larry Freed, president and CEO of ForeSee Results.  “In an economy where consumers are feeling the pinched economically, there’s increased competition for the customers’ dollar. So, it’s even more important for e-retailers to meet their customers’ needs online.”

Last year’s top-rated websites continue to dominate the Index.  Netflix (86), Amazon (82), L.L. Bean (80) and QVC (80) lead the Top 40.  The most improved websites from last year include Costco (up 4.3% to 72), Zappos (up 4% to 78), and Avon (up 3.9% to 79).  Overall, 10 sites have increased customer satisfaction from last year, while 18 websites saw their scores slip.

The third annual holiday edition of the Top 40 Online Retail Satisfaction Index also found:

• Desirable future behaviors that are affected by customer satisfaction, like Likelihood to Recommend and Likelihood to Purchase Online, are down.  Most significantly, Likelihood to Purchase Offline plunged 7.5%, slipping to 62 from 67 last year

• Internet Pure Plays still hold the edge over multi-channel retailers when it comes to online customer satisfaction

“Consumers’ likelihood to purchase offline took a big dip from last year, which we attribute to several factors,” said Freed. “Gas prices may encourage some people to buy online, rather than drive to the mall. Also, the tough economy and the flurry of discounting throughout the season leads to more price comparison shopping and higher expectations for deals.”

The survey of over 11,000 consumers employed the methodology of the University of Michigan’s American Customer Satisfaction Index and was conducted in partnership with FGI Research.  The Top 40 Online Retail Satisfaction Index is composed of the top revenue-grossing online retailers as determined by Internet Retailer.

Other key findings regarding the role of free shipping (both with and without restrictions, leading acquisition sources that drive the most satisfied shoppers, the impact of customer reviews and the availability of alternative payment sources will be addressed in subsequent reports to come over the next couple of weeks.

About ForeSee Results

As the leader in online customer satisfaction measurement, ForeSee Results uses online voice of customer data to help retailers increase sales, loyalty, recommendations and website value. Using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI), ForeSee Results identifies the improvements to websites and other online initiatives with the greatest ROI. With over 25 million survey responses collected to date and benchmarks across dozens of industries, ForeSee Results offers its clients unparalleled expertise in customer satisfaction measurement and management. Retail clients include: Ace Hardware, Barnes & Noble, Best Buy, Borders, Cabela’s, Danskin, Finish Line, Helzberg Diamonds, Lane Bryant, Sears, Sephora and Zappos, among many others.
ForeSee Results, a privately held company, is located in Ann Arbor, Michigan and on the web at www.ForeSeeResults.com.

About FGI Research

GI Research is a leading provider of market research and information solutions that improve the speed, accuracy and impact of business decisions. By combining proven research methods, trusted online sample, and advanced analytics and communications, FGI delivers to end users and marketing research firms immediate and actionable information to decision makers throughout their respective enterprises. FGI offers a premier suite of online research solutions under the SmartPanel™ family of specialty and proprietary custom research panels. For additional information, visit www.fgiresearch.com.