E-tail and Pizza Beat Retail in Customer Satisfaction

Feb 20, 2002

Overall satisfaction with online retail is higher than traditional retail according to the quarterly American Customer Satisfaction Index (ACSI), released by The National Quality Research Center at the University of Michigan Business School. E-commerce companies are showing remarkable and unexpected strength despite the many reports of the death of dot-coms.

On important components of customer satisfaction, such as perceived quality and value, e-commerce is registering very strong scores, according to a detailed report not released elsewhere comparing key satisfaction factors between e-commerce and traditional retail. “These numbers bode well for a new era of profitability for the Internet,” says web satisfaction expert Larry Freed of ForeSee Results, “driven by an increasing sophistication about the link between customer satisfaction and profitability. We’re past the days of just trying a bunch of cool ideas, and moving into a more bottom-line era of getting an understanding of what customers actually care about, and what will produce both satisfaction and profitability.”

In e-tail companies, Amazon.com posted the highest score, with BarnesandNoble.com and eBay not far behind. The biggest improvement was made by 800/Flowers.com, which jumped 10 percent from last year, when e-commerce was first rated.

In food chains, Papa John’s rated ten percent higher than the restaurant industry and also above the retail sector average, according to the survey conducted in partnership with the American Society for Quality and the CFI Group. The pizza chain was rated number one in customer satisfaction among all national fast food restaurants for the third straight year. During the fourth quarter of 2001, 16,000 current customers of the companies included in the survey were asked questions about their expectations and perceptions of value and quality.

Retailers, led by beleaguered discounter Kmart Corp., did a better job of pleasing customers last quarter as stores slashed prices and improved service, the survey found. Kmart showed the largest jump in customer satisfaction among discount and department stores in the fourth quarter, but also had the most room for improvement, the survey found.

Retailers, mindful that consumers are more tight-fisted during a recession,
are paying more attention to what their customers want, from deep discounts
to better service, according to Claes Fornell, a business school professor at
the University of Michigan. Interest rates, currently at a 40-year low, are
a big incentive for retailers to try harder because of the promise of greater
rewards once the economy rebounds and shoppers begin to spend more freely again,
he adds.

Moderator Comment: Why do consumers prefer to shop
online? [George
Anderson – Moderator

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