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Stores Catching Up Online

Aug 1, 2007

Retailers that only sell online are rated higher in customer satisfaction than websites operated by brick and mortar retailers. But the latter group is catching up.

That's according to the results of the Top 100 Online Retail Satisfaction Index, conducted by ForeSee Results out of Ann Arbor, MI. The study is based on a survey of more than 20,000 consumers who visited the top 100 revenue grossing retail websites. It utilizes the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI). ACSI is a 100 point scale designed to measure how well the sites deliver the type of online experience customers want.

According to the report, Netflix and QVC.com, closely followed by Amazon, do the best job of satisfying their visitors. PCMass.com and PCConnection.com are at the bottom of the ranking, and other laggards include Macys.com, NeimanMarcus.com and HomeDepot.com.

The study encompasses a wide range of product categories and merchant classifications, such as mass merchants, department stores and specialty chains. It includes retailers that sell only online and companies that sell both online and in stores.

The range of scores spanned Netflix and QVC.com at 85 on the index, and PCMall.com and PCConnection.com at 67. Among high end retailers, Nordstrom leads with an ACSI score of 73. Neiman Marcus' score of 69 suffered a nine percent drop in comparison to last year. Macys.com also scored 69 this year, and SaksFifthAvenue.com, a newcomer to the top 100 websites, scored 70.

At 76, JC Penney.com and Target.com tied for the top spot among department stores. Wal-Mart followed at 75, with Costco.com and Sears.com trailing at 72.

LLBean.com and the pure play shoe retailer, Zappos.com, led in the apparel and accessory category, both with a score of 79. At 77, VictoriasSecret.com wasn't far behind.

Abercrombie.com matched SaksFifthAvenue.com at 70.

Apple.com and TigerDirect.com led in computer and electronics websites with scores of 79, followed by Dell.com and Newegg.com at 78. They all bested PCConections.com and PCMall.com by more than ten points.

Books, CDs and DVDs were the highest scoring category. Among brick and mortar retailers in this category, Barnes & Noble's BN.com scored well at 82, in relation to the Netflix pure play site. Because Amazon has expanded well beyond this category, it is categorized with mass merchants, but with a score of 83, it remains a large player in books, CDs and DVDs. "Books and DVDs are a much more consistent category than apparel and electronics," explains Larry Freed, president and CEO of ForeSee Results. A best selling book or hit movie are the same whether they're purchased online or in a store, "so online sellers in this category have an easier time of it," he reasons.

"With apparel, there are many differentials along with a question of fit, and there are so many variations among even similar electronics," Freed continues. Yet, new capabilities and technologies are coming to the aid of categories that were initially difficult to depict.

For example, apparel sites are rapidly implementing rotation and zoom capabilities, which make it easier for customers to assess how an item will enhance their wardrobe. Side by side product comparisons are also improving, particularly in electronics categories. And reviews by other customers build consumers' confidence.

Freed says, "In general, those that sell only online do a better job of satisfying customers who come to their websites, and that's so, pretty much across all product categories."

"But the gap is closing," he adds. "Pure players have a huge advantage, because they built everything around selling online from the start. Yet, brick and mortar retailers have that physical presence, which is also an advantage," he continues. "Their challenge is to provide consistency across channels. "Satisfaction relies on what you get versus what you expect," he explains. "Satisfaction is destroyed if a customer sees something online and finds that it's out of stock."

Freed acknowledges that retailers can feature many more products online than they can stock in stores. "They need to make sure that the online visitor understands that some products are available only online, or only in stores," he says. "Even with free shipping," he notes, "it doesn't cost much to sell online," and free shipping is important to online shoppers.

Today's continuous sales and deals have nurtured a price savvy consumer. Since consumers "use the internet to compare prices and shop across a much broader range of retailers, you might expect their buying decisions to be very price driven," Freed says, adding, "our research showed this not to be true."

"Satisfaction with price was the lowest of any of the drivers of satisfaction that we measure," he says. "Improving price would not have a significant impact on satisfaction for 95 percent of the sites we measured. Improvements to brand and the site experience would be far more influential on increasing satisfaction and likelihood to purchase."

Raising satisfaction with the online experience, "has a halo effect on the entire company," Freed contends. Satisfied customers are more likely to buy from the same retailer the next time they're looking for similar merchandise, and, equally important, more likely to recommend the retailer to others.

Topic: Business Strategies

Related Articles: apparel 

Article ID: 294

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