Amazon Tops In Customer Satisfaction, While JC Penney, Dell And Apple Slip

By John Consoli -- Broadcasting & Cable, 12/27/2012 10:15:48 AM

Internet retailer Amazon continues to set the standard for customer satisfaction, matching the record-high score it set last year in the annual Holiday E-Retail Satisfaction Index released by customer experience analytics company ForeSee.

Amazon.com received a satisfaction score of 88 and has had the highest score in the Index for the past eight years.

Second in the shopper satisfaction index with a score of 85 was LLBean.com, up 4 points from last year. Rounding out the Top 10 were OVC.com and Vitacost.com with scores of 84; esteelauder.com and Vistaprint.com with scores of 83 each; 1800Contacts.com, Keurig.com and Scholastic.com with scores of 82; and Avon.com, Cabelas.com, HSN.com and Newegg.com, with scores of 81.

A bunch of online retailers were tied with satisfaction scores of 80. That group includes 1800Flowers.com, Blair.com, chicos.com, freshdirect.com, HPShopping.com, Kohls.com, MusiciansFriend.com, Netflix.com, OrientalTrading.com, Shutterfly.com, Store.Apple.com, VictoriasSecret.com and Walgreens.com.

Online retailers showing the largest increases in the shopper satisfaction index were HSN.com, and Sony Store, Online, each up 5 points from last year; LLBean.com and Gap.com, up 4 points; and Target.com, OfficeDepot.com and Overstock.com, up 3 points each.

Online retailers showing the biggest decreases in customer satisfaction were JCPenny.com -- down 5 points from 83 last year to 78 -- and Store.Apple.com, Dell.com and AutoParts Warehouse.com, down 3 points each to an 80, 77 and 75, respectively.

Lowest scores on the list were Fingerhut.com and Gilt.com which both had 72.

The report is based on more than 24,000 customer surveys collected during the holiday shopping season between Thanksgiving and Christmas. It expanded from measuring 40 retailers last year to 100 this year.

"This year we're seeing that even some of the largest companies in the country are at risk if they lose sight of customer satisfaction," says Larry Freed, ForeSee president and CEO. "Satisfaction with the customer experience, when measured correctly, is the most important predictor of future success, and while Amazon clearly gets it, Apple stumbles from their usual focus on the customer experience and Dell and JC Penney seem to be struggling to find their way, which could make them extremely vulnerable to competitors."

As far as Amazon goes, Freed said, "At this point, Amazon has been dominant for so long and has such a history of focusing on the customer, it's hard to imagine anyone else coming close. Companies should emulate Amazon's focus on the customer, which is clearly linked to superior revenues over the years."

The survey found that highly satisfied shoppers say they are 67% more likely to consider the company the next time they purchase a similar product. Satisfied shoppers also report being far more likely to return to the site, recommend it and stay loyal to the brand, the study found.

A further analysis of the top e-retailers in the U.S. found that, on average, a one-point change in Website satisfaction was found to lead to a 14% change in revenues generated online.

Other findings show that highly satisfied visitors to a retail website say they are 65% more committed to the brand overall, 71% more likely to purchase from the retailer online and 56% more likely to purchase from the retailer offline.

Regarding JC Penney, the report said the retailer is learning its lesson "the hard way."

"[JC Penney] suffered the largest drop in customer satisfaction in the Index because it failed to listen to what its customers wanted," the report said. "It's no surprise the drop was so large. The company tried to reinvent itself in the retail space by overhauling the existing pricing and promotion structure by drastically reducing the number of coupons, special discounts and sales in favor of everyday low prices. This model works great for other companies and their customers, but it obviously is not working for JC Penney shoppers."

The report continues: "If [JC Penney] simply would have listened to their customers, using credible science and statistical rigor before they went public with the new strategy, they would have understood that changing pricing and promotion strategies would not make sense from the consumers' perspective."

The study says that any retailer falling below a satisfaction score of 78 is "risking loyalty, recommendations, sales and market share to competitors with higher scores." Among the online retailers with scores of 77 are BestBuy.com, Dell.com, EddieBauer.com, gamestop.com, Gap.com, JCrew.com, Macys.com, NeimanMarcus.com, OfficeMax.com, RalphLauren.com, Staples.com, and UrbanOutfitters.com.

CVS.com, FootLocker.com, Nike.com and Toysrus.com are among those with satisfaction scores of 76.

The study states that measuring customer satisfaction beyond just how often they click on a site is vital to online retailers understanding how to best reach their potential customers. "While analysts and journalists tend to focus on the flashier story of whether revenue was up or down, they rarely dig deeper to uncover the reasons why revenue changed. Using metrics like hits, clicks and time spent or revenue to determine how well the online retail industry performed during the 2012 holiday shopping season offers good insight, but it also leaves many critical questions unanswered. Getting inside the minds of site browsers and assessing their impressions of their site experience and satisfaction provide a critical perspective on how to maximize the contribution of the Website to driving overall sales, customer satisfaction and loyalty both during the holiday season and throughout the year."