We’ve been doing a weekly benchmark of online satisfaction with retail sites since November. We’ve conducted more than a half a million surveys at this point; more than 13,000 on Green Monday alone. Satisfaction is still down across the board. People are less satisfied with their online shopping experience this Green Monday than they were last Green Monday, just as they have been less satisfied every week this year when compared to last year. There are lots of studies showing that satisfaction (when using the methodology of the American Customer Satisfaction Index) predict future financial success. Two of the metrics we are able to produce for any given company are “likelihood to purchase online in the future” and “likelihood to purchase offline in the future.” Both of these key success indicators are down.
It’s interesting…Comscore is making their seasonal predictions based on backward-looking data—financial data. They’d been saying we’d see a 3% increase in online sales year-over-year and after a great week last week, they’ve increased it to a prediction of 4%. I’m not sure how some of the other analysts and retail experts have been making their predictions, but I bet its based largely on backward looking data. Based on the only forward-looking metric (customer satisfaction), it looks like e-retailers are still in for a very rough ride.
What’s more, we see the gap between the best and the worst widening. According to both our data (satisfaction) and Comscore’s data (financial), the best are getting better and the worst are getting worse.
What do you think? Are we headed toward losing our “middle class” of online retailers?
Satisfaction held steady from last week, meaning shoppers are similarly satisfied with the online shopping experience this week when compared to Cyber Monday. What’s troubling is that satisfaction is still down 3% since last year, and even last year (amidst the recession), it wasn’t anything to write home about. Comscore is reporting sales increases of 4% year-over-year, and we’ve been wondering how sales can be up at all (even a disappointing 4%) when satisfaction is down. After all, satisfaction as measured by the ACSI is a proven predictor of sales, financial success, and even stock prices.
However, when we look deeper at the Comscore data, we see that the Top 25 retailers are growing 13% while “Small and Mid Tail” retailers are declining 10%. As Larry Freed predicted based on the Cyber Monday data, only a small percentage of retailers who have really focused on customer experience over the last year are going to see sales increases, while the vast majority are actually going to lose revenue YOY. So while overall, sales numbers are increasing (a disappointing 4%), the overall increase doesn’t tell the whole story because it’s a few HUGE increases averaged with a lot of decreases. It’s becoming apparent that a lot of individual etailers will still be hurting January 1.
In short, retailers that are focusing on the customer experience despite the recession will increase online satisfaction and will therefore increase revenues.
Kevin Ertell has some ideas on what it looks like to improve customer experience in a way that could have a meaningful impact on revenue.
When measured using the methodology of the American Customer Satisfaction Index (ACSI), satisfaction has been proven to predict future sales and even stock prices. Using the ACSI methodology, our annual holiday benchmark of more than 350,000 shoppers to more than 110 retail websites during the week of Thanksgiving and on Cyber Monday shows some cause for concern. On Cyber Monday, shopper satisfaction was at its lowest levels in four years. Our benchmarks for likelihood to buy online and offline were at their lowest levels in four years.
There’s a bright spot though, and it could be the bright spot that keeps this holiday season merry for retailers. Although overall shopper satisfaction was down, BUYER satisfaction was actually up. In fact, buyer satisfaction was on Cyber Monday was at its highest levels in the four years that ForeSee Results has measured it, meaning that those who actually purchased online on Cyber Monday were happier than they’ve ever been.
Our prediction is that the websites with the highest online customer satisfaction will see the biggest sales increases and could carry the industry. What’s your prediction?