Foresee Results Sees Drop in Online Shopper Satisfaction

Predicts Lackluster Revenue Increases,

ANN ARBOR, Mich. (December 16, 2009) – According to ForeSee Results’ weekly benchmark of customer satisfaction with online holiday shopping, Green Monday shoppers were less satisfied this year than last, continuing a season-long trend of declining satisfaction year-over-year.

Green Monday, a term coined by eBay for their biggest shopping day of the year, is traditionally the second Monday in December and kicks off the strongest online shopping week of the year for many online retailers.

ForeSee Results’ previous weekly benchmarks have all reported satisfaction as down year over year and declining, and Green Monday is no different. With a 2009 score of 72.5 (on a 100-point scale), online customer satisfaction on Green Monday is 4% lower than last year and half a point lower than it was last week (December 7-13). Additionally, every measured element of satisfaction (navigation, search, site performance, etc.) and every measured future behavior (likelihood to purchase online in the future, likelihood to recommend, etc.) is down year over year, many substantially down.

“Week over week and year over year, there is a clear downward trend across every measurable component, both on and offline,” says Larry Freed, CEO of ForeSee Results. “We should be setting a new record every Green Monday, but we’re just not seeing it. There’s nothing positive about a 3% average increase year over year. We are simply not seeing the impressive growth many predicted, and we won’t, based on our data.”

Customer satisfaction, when measured using the methodology of the American Customer Satisfaction Index (ACSI), has been consistently shown to be a predictor of sales, loyalty, recommendations, and even stock prices. Therefore, the downward trend is troubling.

“When we see low and declining scores like this and we understand the relationship between online satisfaction and financial success, we have to be worried,” said Kevin Ertell, Vice President of Retail Strategy at ForeSee Results. “What’s happening is that those who have been working on the customer experience over the last year are improving it and increasing sales. Retailers who have forced their online channels into static, money-saving mode are going to pay the price for putting customer experience on the backburner during the recession.”

A further look at ForeSee Results’ retail benchmark shows that the top 20% of companies in ForeSee’s benchmark (in terms of satisfaction scores) are increasing satisfaction year-over-year, while the bottom 20% are actually declining.

Comscore data underscores the ForeSee Results finding. While revenue is up a modest 3-4% year over year, the modest spoils seem to be going to the bigger players. While the Top 25 retailers are growing 13% year over year, the “Small and Mid Tail” retailers, with a few exceptions, are actually declining at a rate of 10%. In backward-looking metrics (financial data) and in forward-looking, predictive metrics (customer satisfaction), the gap between top e-retailers and bottom e-retailers is widening.

“Industry-wide, this continues to be a disappointing holiday season, but for some there is light at the end of the tunnel,” added Freed. “Those companies that learned from their past mistakes, and used the predictive data found in this study every year to vigorously attack their deficiencies are not simply seeing a substantial rise in online satisfaction, but in revenue as well. In this tough economy, you can’t do any better than that.”

Methodology

This third report in a series of ForeSee Results’ weekly holiday benchmarks was conducted using the methodology of the American Satisfaction Index (ACSI), which was developed at the University of Michigan and has been proven to be predictive of future sales (online and offline), word of mouth, and financial performance. Data was collected from more than half a million visitors to top online retail websites between November 2 and December 14, 2009, including more than 13,000 online shoppers on Green Monday alone. Among the more than 110 e-retailers included in the ForeSee Results weekly holiday benchmark are companies like Ace Hardware, Belk, Best Buy, Borders, Chef’s Catalog, Chicos, Danskin, Eastern Mountain Sports, Finish Line, Helzberg Diamonds, Godiva, Guess, Kodak Easy Share Gallery, Lego, Newegg.com, NFL, Sephora, StubHub, and UnderArmour to name a few.

Source: ForeSee Results