February 11, 2005

Internet retail sales might have risen during last year's holiday season (over the previous year), but did customer satisfaction with e-retailers decline in 2004? The numbers that follow seem to indicate this.

According to the American Customer Satisfaction Index (ACSI) from ForeSee Results, consumer satisfaction with e-commerce has declined from a score of 80.8 in 2003 to an index rating of 78.6 in 2004, representing a 2.7% decline.

Among all the e-commerce categories — e-retail, online auctions, online travel and online brokerages — e-retail experienced the strongest decline of 4.8% between 2003 and last year. Nonetheless, the other categories also displayed declines in customer satisfaction ratings over the year.

There are two main reasons why customer satisfaction with e-retail has dropped, explains ForeSee.

The first is that expansion of companies like Amazon has led to brand dilution. Amazon is increasingly working with different companies to offer a myriad of products beyond books and CDs, which can be confusing for customers.

The second reason for the decline in customer satisfaction with e-retail is that since the Internet has developed as an important channel for consumers, they have greater expectations for the shopping medium. The Net is expected to meet or surpass bricks-and-mortar stores.

Indeed, according to the Holiday eSpending Report from Goldman, Harris and Nielsen//NetRatings, more consumers chose where to shop online according to the site's product selection and its ease of use than those who mentioned their trust in the brand.

In fact shoppers are directly comparing the Internet and offline stores because these days they are using the two venues interchangeably.

Today's shopper is multi-channel, but as eMarketer notes in its Online Consumer Selling report, many retailers fall short of fully exploting the opportunity due to technology hurdles, organizational resistance and short-term thinking.

Source: eMarketer