Amazon E-Customer Satisfaction King
For the eighth straight year, Amazon ranked first in ForeSee’s annual Holiday E-Retail Satisfaction Index, holding steady from last year. Other big companies such as Penney, Dell and even Apple, however, saw declines their scores.
The study, based on more than 24,000 customer surveys collected during the holiday shopping season between Thanksgiving and Christmas, expanded from measuring satisfaction with 40 top retailers to 100 this year.
Amazon’s scored an 88 out of 100, the same as last year.
In a statement, Larry Freed, president and CEO of ForeSee, which measures customer satisfaction for companies, attributed Amazon’s high satisfaction rates to the wide variety of merchandise it offers and a site that is easy to use.
"At this point, Amazon has been dominant for so long and has such a history of focusing on the customer, its hard to imagine anyone else coming close," added Mr. Freed.
L.L. Bean came in second with an 85, up from 81 a year earlier. Others scoring high were QVC.com, 84; Esteelauder.com, 83; and Cabelas.com, Avon.com and HSN.com, all at 81. The index mean average was 78.
Among the big name decliners was Apple’s online retail store, which slid four points to 80, its lowest score in four years. Mr. Freed said that with many new launches in recent months, navigating the site had become more problematic.
Dell.com also fell four points to 77. But the biggest year-over-year decline went to JCPenney.com, down to 78 from 84 last year. Mr. Freed said of Penney, "They’ve struggled a lot in their stores as they’ve tried to reinvent themselves a bit and that’s carried over a little bit to the website."
Among other bigger chains, Walmart.com scored a 78, down from 79 in 2011. Target.com scored 79, up from 76 last year, when it had some struggles after taking over control of the site from Amazon. Nordstrom.com, Macys.com and Kohls.com were all also close to the mean of 78.
Scoring slightly lower than average were REI.com, ToyRUs.com, Nike.com, Sears.com and Lowes.com. At the bottom of the list were Gilt.com, CrateAndBarrell.com and Fingerhut.com.
ForeSee’s findings indicate that satisfied website visitors are 71 percent more likely to purchase from the retailer online and 58 percent more likely to purchase offline. They are also 67 percent more likely to purchase from the retailer next time, 65 percent more committed to the brand overall, and 69 percent more likely to recommend the retailer. Analysis of top e-retailers in the U.S. has also shown that, on average, a one-point change in website satisfaction leads to a 14 percent change in the log of revenues generated on the web.
Discussion Questions
How does achieving customer satisfaction differ online versus in-store and how is it the same? Why do you think many sites operated by brick & mortar retailers are having trouble raising their web experience closer to Amazon’s?
I tried JCP’s site recently and placed an order which I covered in a blog. All I received was confirmation and to expect it in 3-4 business days—it arrived over 2 weeks later. I placed an order from Restoration Hardware 12/17 2-day shipping. It arrived 12/26.
If you are going to have an online presence, you have to be at least as good as Amazon. That means keeping customers informed, having steadfast delivery promises and making it easy to want to return.
Online satisfaction is really no different than brick and mortar, we want what we want when we order it with no surprises, excuses or delays.
Amazon has invested in systems and technology that are totally customer focused. As a frequent purchaser, using Amazon Prime, I am constantly delighted with the online experience that offers one-click checkout, product suggestions, two-day free shipping, package tracking and text messaging of deliveries and no-hassle returns.
Success leaves clues and Amazon has developed the template that delivers beyond expectations. Bricks & mortar retailers need to think in terms of developing customer intimacy, efficiency and execution that exceeds their best in-store experience.
Amazon, for the most part and relatively speaking, makes it easy for consumers to make purchases, and returns, online. The service is good. I am not surprised about Amazon’s good ranking. However, not everything purchased from Amazon is from Amazon. If consumers have a bad experience with a vendor that uses Amazon, but ships direct from its own business, then Amazon is at risk for losing consumer-approval.
Also, Prime members at Amazon pay a premium price to have prime shipping privileges, but prime shipping often does not apply to a vast number of Amazon’s direct shipping and direct selling vendors.
Both online and offline stores need to allow customers to quickly find what they want, have products in stock and expedite the checkout process. They need to back this up with fast, friendly, customer-centric service.
Amazon and the top offline merchants know this. The customer experience is built into their DNA and is stressed at every consumer touchpoint.
Online customer satisfaction can be reduced to three foundational elements—easy to find, easy to buy and easy to deliver. Wrapped up in the word ‘easy’ is navigation, robust and seamless website performance. Amazon was created as an online retailer and was not saddled by traditional ‘brick n mortar’ legacy culture and systems. Those retailers are trying to add an online presence to their current status quo. What they should be doing is reassessing and reinventing themselves completely.
What and how should a retailer design her workflows to meet customer and shopper expectations and how should each channel be designed to compliment each other? This is completely different (and far more challenging) than simply adding an online presence.
Plain and simple, Amazon delivers! I have been a Prime customer for years and only rarely have had an experience that even required interacting with someone in customer service. When I did, they resolved the issue quickly, efficiently, and to my satisfaction without having to jump through hoops. Key items for customer satisfaction online? User experience, delivering when promised, and in Amazon’s case, the recommendation engine…knowing what I want before I do!
Not being a face-to-face transaction makes for a different type of customer service. If dealing with customer service via email, I do not like the delayed response time; for me the live chat method is preferable and provides answers much more quickly. The best customer service is a live person, whether it be via telephone or in-person at a brick & mortar store.
Amazon’s focus is online retailing as opposed to brick & mortar, which has to focus on two areas: online and in-store. There is such a wide variety to choose from at Amazon as opposed to a brick & mortar site which offers basically what can be found in the store (though some do have online only products). Brick & mortar online sites need to expand their online offerings and perhaps review their online pricing.
Brands that have bricks and mortar locations need to recognize that an online presence is an extension of their brand. Any deficiencies in the online experience will erode the brand’s reputation.
Keep in mind that people do business with people. And, a website is designed by people…for people. Manage every online touch-point. Be sure the website is easy to navigate and is intuitive.
Study who you think does an outstanding job and learn from them. Don’t copy, but benchmark. What can you do to bring some uniqueness to your brand’s website?
Customer satisfaction criteria are the same: is it easy to shop, does the company have the products I want, does the product ship in a timely manner, do I receive what I ordered, can I talk with someone if there is a problem, are issues resolved in a timely manner? Of course, the execution online differs from the execution in a physical store, and the execution in a call center.
Amazon has focused on getting the basics right since it began and maintains a consistent quality of service by focusing on customers and how they want to use the site, what products they want, and making the process work well. That is their core business, not a process added on to their existing business.
I imagine that if we combined customer satisfaction of online retailers and in-store, Amazon would win in a walk. More than any other retailer, on-line or other, Amazon is all about the customer. Again this year, all my Christmas shopping was done online, most of it with Amazon. Christmas presents for my grandchildren in France were done on Amazon.fr. (And my Prime was applicable.) Everything arrived perfectly. On time, as expected. And it took me less than an hour and a half to get it all done. (A trip to Macy’s alone would be more time than that.)
And is price an issue? Not at all. Dealing with Amazon negates all price shopping. If their prices are higher or lower, I don’t know. I know they are close enough. And, if they are higher, I am willing to pay for the extraordinary customer service.
The biggest reason other retailers are having difficulty raising the web experience to the level of Amazon’s is mindset. They still do not comprehend that an online sale is as valuable if not more so than a sale in the store. They see themselves in the store business and not in the customer business.
Whether online or in-store, it’s all about the customer! If you have thought out the processes from the perspective of your customer and can deliver, then customer satisfaction goes up!
Customer satisfaction is achieved in a similar manner both offline and online, yet there are very different tools and tactics available within the different channels.
There are very real limits to what can be done online, particularly in terms of the human aspect of the merchant. However, online provides a nearly unparallelled opportunity to deliver consistency, leverage data and customize an experience.
Conversely, an in-store experience has an absolute advantage in terms of delivering service via a human being, which should always trump online in terms of making an emotional connection.
The real answer depends on fundamental variables, largely a function of the retail category and the customer.
Max is right—the fundamentals are the same both on and off line. Online retailers need to make sure that products are shipped on time, in one piece as represented and that returns are seamless.
As to why Amazon is best, well, they more or less perfected, if not invented, the game didn’t they? And—in this case—practice seems to have made near perfect.
Seamless—it should not matter if you are ordering online or in-store or via direct chat or through retail call center—the access to product information, available sizes, warranty, eligible for promotion or bonus points if in loyalty program, shipping advantage, and easy returns plus preference based on form or tender. You treat the online customer the same as the in-store buyer.
Where retailer websites fail is in the visibility to the shopping cart as you select items and how the cart “looks”—whether it is refreshed over time. Also, lack of interaction as the shopping experience continues—how nice would it be to have a personal shopper work with you as you shop? Not the boring pop-up pic of a friendly customer service rep with the dull looking headset either.
Analytics, predictive modeling, item and price promotion based on historical or profile analysis—an investment in these tools continues to create a gap between the best operators and their competitors.
Another paean to Amazon…how nice (though I think David’s cautionary note might be more prescient).
As for the comparison between online and in-store satisfaction, I think it’s like a comparison between baseball and football; i.e. the end goal (scoring more than your opponent) is the same, but how you go about it—and everything else for that matter—is different.
Customer satisfaction is the same everywhere you go. Satisfaction is meeting or exceeding the expectations of the customer, before the customer realizes it. Properly communicating these expectations (like Nordstrom or Amazon) and then meeting or exceeding them as a daily part of your business, is the key to success. We only have to look at the very successful companies either online or in-store and their success with great customer satisfaction fills this requirement.
Executing a process is an imperative, regardless of whether you’re online or bricks & mortar.
The next key to excellent customer service is limiting access to humans. If your process if flawless and you needn’t ever speak to anyone then there’s no reason for anything less than perfect customer service.
Having written that, I teach/speak on the Kano Method. Truly delighting customers generally requires human contact. Which, of course, requires extensive training. It’s not impossible; The Ritz-Carlton and Four Seasons Hotels do it exceptionally well.
Retailers have to, among many things, make the commitment to serving their clients and the courage to increase margins to accommodate increased costs.
E-commerce is more competitive, as the barriers to switch vendors is less. I know, physical proximity is a big factor for choosing a brick-and-mortar store. In online world, there is no loyalty induced by locality.
The parameters of satisfaction of web portal visitors are different from physical store visitors. Product search is related to store lay-out in physical world. In E-commerce it is exhibited in proper catalog management, effective search facilities, and realistic display features. Similarly, running promotional campaigns and customizing them can acquire different hues and colors in online world and physical world.
Brick-and-mortar retailers should view the online channel complementing physical store. This can become their competitive advantage to online retailers. If an entity tries to compete with both physical stores and online stores, it can face conflicting choices.