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ForeSee details customer satisfaction with online retailers

Ann Arbor, Mich. -- While many e-retailers had a holiday to celebrate, customer satisfaction with the Top 40 online retailers overall has fallen since last year, according to the sixth annual ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition).

The report found that customer satisfaction slipped 1% to 78 on the study's 100-point scale (compared with the 2009 holiday season), but is still significantly higher than previous years. The overall decline can largely be attributed to declining scores for some computer and electronics retailers and mass merchants.

"In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices,” said Larry Freed, president and CEO of ForeSee Results. “Our research shows that is not always the case, and that it varies drastically from company to company. Retailers are slashing prices this time of year to attract customers, and not all of them need to be doing that."

The report found that customer satisfaction has a huge and quantifiable impact on the future success of a website. Highly-satisfied visitors to retail websites say they are 60% more committed to the brand overall, 61% more likely to purchase from the retailer online, 35% more likely to purchase from the retailer offline, and 64% more likely to recommend the retailer than are dissatisfied visitors. Nearly 20 years of research coming from both academia and the private sector indicates that increasing customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations.

The report examined a few notable head-to-head match-ups, including:

Amazon vs. Walmart.com: E-retail giant Amazon (86) and retail behemoth Wal-Mart (80) both have superior online satisfaction scores, but Amazon still holds a significant 6-point advantage. Amazon beats Walmart.com in three measured drivers, or elements, of website satisfaction: content, functionality, and merchandise, and they are tied on consumers' perceptions of their prices.

Staples vs. Office Depot vs. OfficeMax: The three major office suppliers compete closely in terms of satisfaction, with Staples leading at 78, Office Depot at 76, and OfficeMax at 75. The difference-maker in the office supply category is price, and Staples scores better than its rivals for the price element of the retail website experience.

Netflix vs. Blockbuster: While video rental is not typically associated with holiday retail, Blockbuster and Netflix are still two of the highest revenue e-retail websites on the Internet. Netflix is online only. Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) beats Blockbuster (76) in two very important categories: price and website functionality. In this case, improving functionality is more important than price if Blockbuster is going to make any strides toward closing the satisfaction gap with Netflix.