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.
Survey: Retailers’ weekly sales rise 4.8%
New York City — A survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs found that chain-store sales for the week ended Dec. 25 rose 4.8% from the year-earlier period, the best performance since April 24.
According to the survey, on a week-over-week basis, sales gained 1%.
"Consumers hurried to complete their last minute holiday-gift buying ahead of Christmas Day as many workers had additional shopping time on Christmas Eve, which was a federal holiday for many since Christmas Day fell on a Saturday," said Michael Niemira, ICSC’s chief economist. "That last-minute holiday spending lift was aided by consumers who had more money as a result of the improving economy, more time as a result of the Friday holiday and more holiday-season excitement than in many years."
ICSC forecast December same-store sales to rise 3.5% and November-December holiday-season sales to increase 4%, the strongest since at least 2006. Those forecasts were at the top end of its previous ranges.
Where’s the Savings?
There wasn’t anything particularly complicated behind Wendy’s franchisee Raul Dominguez’s decision to implement an energy management system in his Miami chain of six quick-service burger restaurants. He simply wanted to reduce utility expenses.
“Our costs were skyrocketing because of high fuel costs,” said Dominguez, whose Florida territory also includes another six Wendy’s units in Orlando. “I wanted to save money on electric bills, plain and simple.”
In 2007, Dominguez retained Arlington, Va.-based GridPoint to identify the restaurant’s biggest energy draws and install an energy management system to tighten the controls and halt over-consumption. The project launched with a pilot site in Miami. But the savings didn’t stop there. Although the original battle plan was to see how the pilot store performed for an extended period of time, the initial proof-of-concept went so well that Dominguez installed the GridPoint system in his remaining five Miami-market Wendy’s units in early 2008.
The GridPoint system is actually an energy management and submeter system. It controls HVAC, lighting and refrigeration, monitors the total energy load in the units and essentially acts as the central nervous system for the store. A typical location, whether restaurant or retail store, has a meter that measures electricity and gas usage but is incapable of identifying the biggest energy hogs. In the GridPoint EMS, a submeter augments the traditional meter and allows detailed visibility of energy eaters, whether HVAC, lighting or even broilers.
“The submeter will tell us on a granular level how much energy is being used,” explained Michael Donohue, executive VP sales for GridPoint. “And we don’t restrict our visibility to the HVAC system, as we also likely want to monitor lighting usage, which can be interior lighting, exterior lighting, office and backroom lighting and signage.”
The other hardware component to the system is a control that removes energy command from employees to the owner or central decision-maker. The control in the Wendy’s units allows Dominguez to decide what the restaurants’ set points are for temperature and lighting and maintain those set points without employee interference.
The accompanying EMS software enables proper analyses for energy usage. The EMS installation in Dominguez’s six Miami restaurants revealed the biggest energy users as, not surprisingly, the HVAC and refrigeration systems.
“And that is where we have seen the biggest savings,” Dominguez said. Since the 2008 rollout, energy costs have been reduced between 10% and 15% — from a monthly cost of about $5,000 per month per site to less than $4,500 per month per site.
An added advantage of the system has been a reduction in food spoilage. As part of the GridPoint system, Dominguez receives an e-mail if a refrigerator is not operating at the correct temperature, promoting quick reaction and enhanced food safety.
Looking ahead, Dominguez said he plans to roll out the GridPoint system to his six Orlando Wendy’s units, and he is implementing additional energy-saving strategies.
“Over the past year, we have replaced every fluorescent light bulb in every restaurant with incandescent,” Dominguez said. “And we are looking at on-demand water heaters to further save energy and cut costs.”