Netflix, Amazon beat multichannel players in holiday satisfaction index

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DVD rental site Netflix and Internet superstore Amazon.com once again topped the list of online retailers surveyed by ForeSee Results for delivering a satisfying online shopping experience during the Christmas holidays.

The two online-only retailers occupied envied spots on the Top 40 Online Retail Satisfaction Index from ForeSee and its survey partner, FGI Research. Netflix posted a 2.4 percent increase this holiday season versus 2005 to attain a score of 86 out of 100, while Amazon was also up the same percentage with a score of 84. But they had better watch their backs.

"I was truly surprised by the group of retailers that had significant increases from last year's holiday study and they were all multichannel retailers," said Larry Freed, president/CEO of ForeSee, Ann Arbor, MI.

Indeed, players like Sears.com, JCPenney.com, OldNavy.com, SonyStyle.com, Target.com and HPShopping.com all posted score increases of 5 percent or more compared with the 2005 holidays. Sears.com, for instance, upped its 2006 holiday satisfaction score 7.4 percent to 73, from 68 last year. Click here for chart.

As expected, the top online-only performers in the index gained high satisfaction scores based on the focus on one channel. Click here for the full chart.

Netflix was cited for its excellence in site experience, merchandise, brand and price - all factors key to driving overall satisfaction and future behavior like purchase, return and recommending the site to others.

Similarly, Amazon stood out for its merchandise and other satisfaction drivers.

Now, even the multichannel retailers are vying with their online-only counterparts in areas that drive consumer satisfaction over e-commerce transactions. The supporting role played by other channels like catalog and stores helps.

"We've seen over the last few years the pureplay retailers seem to lead the way in meeting their customers' needs online - not a big surprise; they're totally focused on the online channel," Mr. Freed said.

"With these bricks-and-mortar multichannel retailers, we're seeing them close the gap to the pureplay online retailers," he said. "When you think about the advantage that bricks-and-mortar retailers have, which is the other channel, this leads us to think that it'll continue to be a very competitive landscape between the pureplay retailers and the bricks-and-mortar retailers."

The ranks of the 40 in the index include multichannel players like LLBean.com (No. 3, score 80, consistent with last holidays); QVC.com (No. 4, score 80, consistent with last holidays); Apple.com (No. 5, score 79, up 3.9 percent from 76 in 2005 holidays); and OldNavy.com (No. 6, score 79, up 6.8 percent from 74 in 2005 holidays).

The other sites with multichannel presence included Barnes & Noble's bn.com, Dell.com, Williams-Sonoma.com, Chadwicks.com, HSN.com, 1800Flowers.com, CircuitCity.com, Gap.com, Nordstrom.com, BananaRepublic.com, BestBuy.com, NeimanMarcus.com, OfficeDepot.com, PotteryBarn.com, Staples.com, Walmart.com, Gateway.com, Macys.com, toysrus.com, CompUSA.com, Costco.com and CDW.com.

Research showed that CDW.com, Costco.com and CompUSA.com scored low on all satisfaction drivers, particularly price and brand. Costco.com's lowest driver score was merchandise, while it was across-the-board low scores for CompUSA.com.

"Focus on the customer," Mr. Freed said. "I think the biggest opportunity in online retail is to do a great job in meeting the customer's needs and you'll have a long-term loyal customer. We know that satisfaction will drive loyalty and loyalty will drive financial success."

Overall, the survey - based on roughly 10,500 consumer responses collected Nov. 28 to Dec. 19 - showed that apparel and accessories sites topped the satisfaction index despite past fears over the Internet's inability to convey look, color and fit information satisfactorily.

Sites belonging to mass merchandisers and retailers specializing in computer and electronics also scored high satisfaction scores. Again, several multichannel retailers with an e-commerce site people the ForeSee list that uses the methodology of the University of Michigan's American Customer Satisfaction Index.

"I think they've started to get more of a focus on the Internet," Mr. Freed said. "Years ago the Internet was not a key focus of growth for multichannel retailers and today it is.

"They're really able to leverage their strengths of the traditional channels and still provide a good experience online," he said. "It's a bit of a wakeup call to some of the pureplays. You still have a lot of pureplays at the top, but the gap is closing quickly."

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