E-Tailers Beat Bricks and Mortar in Customer Satisfaction
When it comes to customer satisfaction, online retailers beat the traditional brick-and-mortar stores, hands-down. In fact, customer satisfaction with e-tailers is nearly 12 percent higher than the overall retail industry. That's just one of the many findings being released today by University of Michigan business school in its latest quarterly study of how thousands of customers rank their experiences with about 200 companies.
Every quarter, the American Customer Satisfaction Index focuses on different segments of the economy. This quarter it's retailers, finance and insurance and e-commerce. Here are some of the key findings:
By far the sector with the greatest satisfaction was online retailing, with companies posting an overall score of 81, considerably higher than the bricks-and-mortar retailers, whose overall score was 72.4. All the online retailers had scores far higher, with Amazon leading the pack at 87. That's still down from its high score of 88 in 2003, but an improvement from last year's 84 grade. Sharing the top 87 score was barnesandnoble.com.
By comparison, the best score by a traditional retailer was 80 by Kohl's, followed by J.C. Penney and Target, which both posted scores of 78. The lowest ratings to a department/discount store went to Wal-Mart (72) and Kmart Corp., now combined with Sears (70). That's a one-point drop for Wal-Mart from last year, but a three-point gain for Kmart.
"E-retailers used to be at a disadvantage because customers can't touch and feel their products, but they've figured out that there's a whole lot more they can offer to make up for that," said Larry Freed, president of ForeSee results, an online customer-satisfaction management company that teamed with the University of Michigan's survey.
For specialty retailers, the highest score (79) went to Costco, while Home Depot posted the lowest (67), a 6-point drop from last year. "Home Depot's state of the art quality techniques are more focused on internal systems for operational efficiency and productivity," said Jack West, a past president of the American Society for Quality in a statement that came with the report. "These things are largely transparent to the consumer and would take awhile to be reflected in perceived quality ratings, if they're ever noticed by the consumer at all."
On other online sites, ebay still posts the highest score for an auction site--81--but it's down from a high of 84 in 2003. Even so, it's substantially in front of other auction sites, including uBid (73) and priceline (72). Expedia had the greatest score increase in the online travel category, up to 79 from 76 last year, making it the clear leader over Travelocity (75) and Orbitz (74), which both posted drops in customer satisfaction.
As for banks, Wachovia posted the highest score (79); Wells Fargo, the lowest (67).
Why should these scores matter? As we all know personally, the more satisfied customers are, the more likely they are to return to that store and even increase their spending.
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