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Online Customer Satisfaction Reaches Lowest Level Since 2004


forsee_chart_imageWhile online retail continues to thrive, new research shows that online customer satisfaction has weakened, indicating that some companies may have negatively impacted their business with strategies implemented during the economic recovery.

The American Customer Satisfaction (ACSI) Index’s annual E-Commerce Report, produced in partnership with ForeSee Results, found that customer satisfaction with e-commerce web sites is down 2.6% to 79.3 on the ACSI’s 100-point scale, its lowest score since 2004.  Diminishing satisfaction with online retail pulls down aggregate satisfaction with the e-commerce sector overall, which also includes online brokerage and online travel.

In 2010, the ACSI predicted a recovery as customer satisfaction scores increased almost universally. Contrary to previous years, where increases and declines were almost uniform across all measured industries, this year shows a mix of falling and rising customer satisfaction, which provides insight into the success of companies’ business models after they have weathered the economic downturn.

“In any economic downturn, both businesses and consumers look to improve their bottom line, but the largest companies with the flexibility to offer the discounts and promotions will satisfy a thrifty consumer and engender long term loyalty,” said Larry Freed, President and CEO of ForeSee Results.

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Overall customer satisfaction as measured by ACSI has not improved since the middle of 2009, and now registers its biggest drop in two years.  For Q4 2010 the Index fell 0.5% to 75.3 on the ACSI’s 0-100 scale.

For online retail specifically, satisfaction decreased 3.6% to 80, as customer satisfaction with smaller online retailers suffered a major drop. The “all others” category, which is an aggregate of smaller e-retailers and other companies not individually measured, fell 6% to 78.

There is some good news. Big-name online retailers continue their dominant reign. Amazon was up 1% to 87and eBay gained 3% to 81. While Amazon may have recorded smaller profits than predicted, the online giant grew its market share and is in position to continue to lead the industry in sales, according to the report.

As reported in the ACSI retail report, satisfaction with brick and mortar retail is down 1 point to 75. Online satisfaction has exceeded brick and mortar satisfaction since the ACSI began measurement in 2000. Despite the drop, customer satisfaction with online retail is still 7% higher than satisfaction with the overall retail industry. The aggregate e-retail industry score is made up of the scores of several of the largest online-only retailers in the field.

Measuring The Mobile Channel
For the first time this year, ForeSee Results applied ACSI methodology to measure customer satisfaction with companies’ web sites and applications accessed via mobile phone. The aggregate satisfaction score for mobile commerce as determined by ForeSee Results’ Report on Mobile Shopping during the Holiday 2010 Season is 75.

“Mobile commerce is still emerging and presents a tremendous opportunity for growth,” Freed noted. “It is the Wild West in terms of mobile apps, and companies can really begin to distinguish themselves if they pay close and careful attention to their customers’ needs and expectations on the mobile channel.”

The ACSI, which has measured customer satisfaction with goods and services of more than 200 companies since 1994, first started measuring customer satisfaction with the e-commerce industry in 2000.