CE, IT e-Tailers Score Lowest In Customer Satisfaction Study

ANN ARBOR, MICH. — Despite sky-high scores for Newegg.com and Apple.com on its Web-wide Top 100 e-tail ranking, Internet research firm Foresee Results said that the electronics and IT sector falls short when it comes to satisfying consumers online.

According to Foresee's annual Online Retail Satisfaction Index, the computer and electronics category scored dead last behind apparel; food and drug; sporting goods; and books, movies and music, which led the product category rankings.

The study, conducted with FGI Research, uses methodology developed by the University of Michigan's American Customer Satisfaction Index (ASCI) to measure how well Web sites perform, and to accurately predict consumers' future behavior and brand loyalty both online and off.

The index is comprised of the top 100 online retailers by sales volume as identified by the 2008 Internet Retailer Top 500 Guide, and results were based on surveys of 24,000 respondents conducted in early spring.

According to Foresee, online satisfaction drives loyalty, sales, and word of mouth. Highly satisfied online shoppers are 69 percent more likely to purchase from the retailer next time for similar merchandise, the study showed, while 75 percent are more likely to recommend the retailer.

"Customer satisfaction builds loyalty, increases brand recognition and ultimately leads to future sales," said Foresee president/CEO Larry Freed. "The more satisfied a customer is with a Web site, the better the opportunity for the retailer to impact their bottom line."

Freed said that providing a satisfying Web experience is a key way to convert "browsers to buyers," which is even more critical during a weak economy when competition for limited consumer dollars is fierce.

As the index shows, some do a better job at satisfying customers than others. Topping Foresee's Top 100 ranking is Netflix, whose "satisfaction score," based on a 100-point scale, rose 1 .2 percent year-over-year to 86. QVC and Amazon.com follow in second and third place, while Newegg and Apple share Top 10 status at Nos. 6 and 7, respectively, with scores of 80 each.

At the opposite end of the index, PC Connection and PCMall.com were tied for last place, with satisfaction scores of 67, flat from last year.

Scores of 80 or greater indicate high satisfaction, and scores of 69 or lower indicate dissatisfaction, Foresee said.

In between, IT leader TigerDirect ranked 16th on the index; Dell.com came in at 30; CircuitCity.com placed 33rd; BestBuy.com was 49th; and J&R Electronics.com was ranked 55th, ahead of such retailers as Macy's, Target, Sears, Lowe's and FTD.

Besides addressing such basic areas as search function, navigation and product descriptors, Foresee also suggested that e-tailers embrace promotional emails, free shipping and include customer reviews to improve business.

Promotional emails drive the best quality and highest quantity of traffic, Freed noted, while free shipping can be a "valuable and effective competitive differentiator for computer and electronics Web sites."

Interestingly, the research indicates that lowering price wouldn't make people much more loyal or likely to buy, suggesting that CE and IT e-tailers would be better off investing in free shipping, adding product reviews, or better aligning the brand across channels than in lowering prices, Freed observed.

Freed said the results are all the more compelling given the fact that 48 percent of PC hardware, software and peripherals, and 20 percent of CE are now being purchased online, according to Shop.org and Forrester Research.