[cnbc.com – May 2010]
As consumers increasingly shift their spending to the Internet, retailers’ focus on improving their online presence is paying off.
According to a new survey by research firm ForeSee Results, satisfaction among the top 100 online retailers shifted to an all-time high 78 out of 100—a five-point increase over this time last year.
Perhaps more telling, for the first time in the six years of the survey, no retailer earned a score lower than 70—the bar for classifying a dissatisfied customer.
“The state of the economy really forced e-retail to step up their game,” said Larry Freed, president and CEO of ForeSee. “Since so much of the financial downturn was out of their control, companies turned to those things they could improve, and now they are reaping the benefits.”
Even a slight improvement in sales can translate into big bucks for retailers, Freed said. According to the study, which was based on responses from more than 23,000 visitors to the 100 biggest retail Web sites, a one-point increase in online customer satisfaction translates on average to roughly $89 million in increased sales.
“The paycheck for satisfying your customers is not only for revenue today, but more loyalty and more recommendations in the future,” Freed said.
Online sales have become even more important in the aftermath of the recession.
Critics of the retail sector’s recovery have downplayed a recent improvement in same-store sales—citing historically weak comparisons—but online retailers this year have been making better than 10-percent sales gains over a positive 2009, according to Nicholas Colas, ConvergEx Group chief market strategist.
That growth is likely the result of retailers investing more in their Web sites. According to a study by Forrester Research, Web sites’ spending on 15 of 18 technology categories related to online customer experience is expected to rise this year.
ForeSee gauged its ratings based on three factors:
• Drivers of satisfaction, which include merchandise, functionality and content;
• Overall satisfaction, which brings into play a person’s individual expectations, and
• Future behaviors, such as how likely a shopper is to return to the site.