Online Shopper Satisfaction Holds Steady, But Still Disappoints

ForeSee Results Holiday Benchmark

ANN ARBOR, Mich. (December 8, 2009) – Customer satisfaction with retail websites for the week following the Thanksgiving weekend is on par with satisfaction on Cyber Monday, according to ForeSee Results’ weekly holiday benchmark.

Satisfaction, at 73.1 on a 100-point scale this week, is only slightly lower than the week before Thanksgiving (73.5). Though little has changed week-over-week, the satisfaction score is 3% lower than at the same time last year and does not bode well for a retail industry hoping to regain its footing during the holiday shopping season.

ForeSee Results measures online customer satisfaction using the methodology of the American Customer Satisfaction Index (ACSI) which predicts purchase intent (both online and offline) as well as loyalty and recommendations. Because of the ACSI’s scientifically proven predictive abilities, for many online retailers, satisfaction is the best measure of future success and can be a crucial bellwether.

“Retailers hoping for a healthy rebound after last year’s discouraging holiday season may be in for another letdown,” said Larry Freed, president and CEO of ForeSee Results. “ComScore just released numbers citing a four percent increase in spending over last year. For an industry accustomed to double digit increases in revenue year over year, this is disappointing. With satisfaction lower than it was last year, it is going to be a challenge for online retail spending to exceed the 4% growth currently being reported.”

Satisfaction may be lower because customer expectations continue to rise, and larger retailers are setting the pace. According to ComScore, larger retailers are increasing market share and account for 64% of all dollars spent.

“Standing pat is not a winning strategy for e-commerce, and rising customer expectations put a lot of pressure on retailers that have chosen not to continually invest in improvements to their online customer experiences,” said Kevin Ertell, ForeSee Results Vice President of Retail Strategy.

“The retail industry has conditioned consumers to expect the big discounts on Cyber Monday, and we did see higher intent or likelihood to purchase online on that day. But it has since given up those gains as consumers revert to using online retail as a research tool,” said Freed. “As the excitement over aggressive Cyber Monday promotions wanes, we’re not going to see any breakthrough sales numbers because consumers aren’t getting any more than what they expect.”

Other findings from the second weekly holiday benchmark report:

* All future behavior measures – likelihood to purchase online, offline, and to return to the site – remain lower than last year, in spite of marketing efforts centered around Cyber Monday.
* Year-over-year, some key website satisfaction drivers are rated lower, as well. For example, Product Browsing (which measures the ability to sort and filter to find products) scores are lower (75.8 in Cyber Monday week, compared to 79.2 last year). This could mean that expectations of retail websites are getting higher, and some of the weaker players may have trouble keeping up.
* Satisfaction with site performance dips on Cyber Monday every year as high traffic levels tax websites, but it bounces back to previous levels as traffic stabilizes. The same pattern emerged this year.

Methodology

This second 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 150,000 visitors to more than 110 top online retail websites between November 30 and December 6, 2009, including 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