ForeSee Results, market leaders of customer satisfaction measurement and management, has today announced the findings of its annual Christmas Customer Satisfaction Index across the UK�s top 40 online retail websites during December. After a huge year-on-year increase in online customer satisfaction from 2008 to 2009 (from 67 to 71 on a 100-point scale), customer satisfaction has increased only slightly in 2010 (from 71 to 72). This is significant because highly satisfied visitors to retail websites in the UK say they are 57% more committed to the brand overall, 59% more likely to purchase online, 33% more likely to purchase offline, and 69% more likely to recommend the retailer. There is a powerful and quantifiable impact when customers have a good experience, with demonstrable return on investment.

By comparing scores to the overall aggregate for UK online retailers (72), any retailer falling 72 or lower is risking loyalty, recommendations, sales, and market share. By this measure, the research shows that 24 online retailers (nearly two-thirds) are underperforming their UK peers. Despite these findings, the research also indicates that the gap between the best retail websites in the UK and the rest is huge and possibly widening. Whilst the year-on-year increase in satisfaction is small in the aggregate, individual retailers have seen big gains. The best and biggest online retailers are typically providing a much better online experience, and smaller retailers are falling further behind.

This is the fourth year that ForeSee Results has measured customer satisfaction with the top 40 online retailers in the UK, enabling valuable year-on-year comparison to see which retailers have improved and which have slipped over time. The Index measured four high level factors that affect overall customer satisfaction: functionality, price, merchandise and content. Over 10,000 survey responses were collected from shoppers who had visited the top 40 online retail websites in the UK in November and December.

Key Trends: Retailer Satisfaction Ratings

The Leaders: Amazon.com (84) was measured for the first time this year as a separate site, and it slightly edges out the long-standing top performer amongst UK online retailers, Amazon.co.uk (83). Perennially high-scoring Play.com increases two points to round out the top three companies scoring over 80 (last year, only one website scored over 80, generally considered the threshold for excellence whilst using this methodology). John Lewis increases one point to 78, and Marks and Spencer enters the top five for the first time in the study’s four-year history with a five point year-on-year increase.

The Fallers: Only seven of the 40 websites (18%) saw scores decline, but all decreased only by one point except for Dell EMEA, which declined three points since last year to a score of 68, below the online retail aggregate of 72.

The Widening Gap: When comparing the largest online retailers (in terms of revenue, as ranked by IMRG) to the rest of the group, it is clear that the largest retailers have the highest satisfaction. In fact, the average satisfaction of the top 10 online retailers (in terms of revenue) is 77; whilst the average satisfaction for the rest is a 71, a gap of six points. In addition, the 10 online retailers with the best satisfaction had an average increase of two points each, whilst the other thirty retailers averaged no change since last year.

In short, the best are getting better, while the rest are slipping.

The Most Improved: Of the 40 measured UK online retailers, fourteen (roughly one-third) saw year-on-year increases of at least a point or more. The most notable increases are all companies that build on substantial gains last year by not resting on their laurels and continuing to improve the customer experience on an ongoing basis.

Marks and Spencer (78): up five points since last year; up eight points since 2008
Argos (77): up four points since last year; up 10 points since 2007
ASDA (76): up three points since last year; up 12 points since 2007
Next (74): up three points since last year; up seven points since 2007
River Island (72): up three points since last year; up 11 points since 2007
Littlewoods (71): up five points since last year; up seven points since 2007
Curry's (69): up three points since last year; up nine points since 2007

Internet pure plays outperform multichannel retailers again: pure plays score 76, up two points on last year. Retail chains score 72 and multichannel retailers score 71, up by 2 and 1 point respectively on last year and trailing the Internet pure plays significantly.

UK vs US: With an aggregate score of 78, American websites are outperforming UK websites by six points, but the gap is closing. Last year, the gap was eight points.

Satisfaction by categories: Individual retailers at the top of their game in various categories include Amazon.com, Amazon.co.uk, Play.com, John Lewis, Marks and Spencer, Apple, Next, Cineworld, Easyjet, Expedia, Screwfix, HMV, and ASDA.

Customer satisfaction matters more than ever. Compared to online retailers with average satisfaction scores of 69 or lower, those scoring 77 or more had notably high than average scores for future purchase, brand commitment, and recommending the site.

To improve satisfaction, online retailers need to improve certain, specific website elements. On aggregate, retailers need to focus on improving price (either actual prices or just customers’ perceptions of prices) as well as the availability, variety, and appeal of merchandise.

Social Media: Fewer than 4 percent of online Christmas shoppers report being primarily influenced by social media channels to visit a website. Ten percent visit websites as a result of a promotional email and 13 percent as a result of search engine trawls. A huge 46 percent are primarily influenced by their familiarity with a brand.

Mobile Shopping and Apps: Ten percent of shoppers have accessed the website for the company they rated via their mobile phone. Those that did were primarily using their mobile or smart phone to look up prices, compare product specifications, or do product research. Only 1.3 percent of all online shoppers actually made a purchase on their mobile phone.

The Multichannel Experience: Nearly half of site visitors (49 percent) come to a website just to research; not to buy. Roughly one-fifth of shoppers plan to research online and then buy in the store; a multichannel impact and value that is probably not captured or quantified by the retailer in question.

Larry Freed, President and CEO at ForeSee Results commented: �To the general public a small point increase may seem insignificant, however for the Top 100 American retailers a one-point change in website satisfaction was found to predict a 14 percent change in the log of revenues generated on the web! We�ve found similar relationships between customer satisfaction and revenue in previous years so for Marks & Spencer to see a five point year-on-year increase is good news for them and could predict a huge increase in online revenue.

“The findings around how shoppers are interacting with retailers also threw up a few surprises – that just 4 percent reported they were primarily influenced by social media to visit the site and only 1.3 percent are making purchases using their mobile phones – both marketing channels that retailers appear to be heavily investing in, with apparently little return or interest from their customers,” said Kevin Ertell, Vice President of Retail Strategy at ForeSee Results. “While social and mobile may play a significant role in the future of online commerce, it's important to recognise they play a relatively small role today and getting basic web experience right is still hugely important. Retailers need to tune into and fully understand what their customers want from them and focus their attention on converting browsers into customers. Satisfied customers will return, recommend and stay loyal – worth their weight in gold.”

Published on: 9:20AM on 22nd December 2010