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E-TAILERS GIVE THEMSELVES POOR SCORE

Posted on August 30, 2002

      The industry may turn out to be its worst critic as a survey of 273 online retail executives revealed overall dissatisfaction with e-tailing. When ForeSee Results asked the American e-tailers to rate their overall satisfaction with online shopping on a 100-point scale, the score barely broke the halfway mark at 58.

      Comparatively, the average score for brick-and-mortar retailers is 74.8, and the Internal Revenue Service (IRS) received a 62, indicating that the future of e-tail could be in jeopardy.

      Other key findings among the research include:

      - E-tail insiders indicated deep disappointment with online fundamentals such as site navigation (which scored a 54) and setting up online accounts (55).

      - Elements that e-retailers gave higher rankings are the online ordering process (68), site functionality (66), and content (64), but even these scores are relatively low.

      - Ironically, despite the low satisfaction scores e-retailers give their industry, 90.8 percent of those surveyed indicated that customer satisfaction is very important to their organization.

      "It seems counterintuitive to say so, but this is actually good news and bodes well for the industry," said ForeSee Results CEO Larry Freed. "These are the people who know better than anyone how much better things could and should be. They're clearly putting pressure on themselves to set a higher standard. If they follow through, and keep ahead of rising customer expectations, they'll earn strong customer satisfaction and loyalty -- and the revenues that brings. But they can't wait until people start complaining. The expert opinion we measured is ahead of the curve -- but Internet history tells us that the experts are only slightly ahead so they'd better watch out and take action. Now is the time to start figuring out what's going to most impact customer satisfaction and behavior and get things done before the holiday shopping season arrives."

      Freed believes that e-tailers are working on improvements, particularly to gear up for what is expected to be a big e-commerce holiday season. "There are a few months before the holiday shopping season, so if the e-retailers start taking action on the things that really drive customer satisfaction they will knock holiday shopper's socks off."

      Additionally, indicators from Nielsen//NetRatings bode well for the 2002 holiday e-commerce season. The measurement firm found that 58 percent of holiday shoppers reported that they were "satisfied or very satisfied" with their online shopping experience in 2001. However, e-tailers will have to worker harder as 2002 brings lowered consumer confidence along with lower-income households shopping online, and those looking for value.

      "The 2002 online holiday season will likely resemble the 2001 season, with the economy setting the tone and pace for e-commerce," said Lisa Strand, director and chief analyst, Nielsen//NetRatings.

      However, analysts from Gartner, Inc. were not as optimistic about businesses' ability to satisfy customers, particularly with technological solutions.

      The firm theorizes that through 2007, a time during which acquiring, satisfying and retaining customers will be imperative to business success, more than 75 percent of businesses will fail to fully meet customer expectations for customer service excellence.

      Furthermore, businesses that fail to meet customer service excellence will experience an average turnover of 100 percent of their customer base every five years, according to Gartner. However, those that use customer relationship management (CRM) solutions properly have a better chance of survival. By 2007, Gartner predicts that more than 60 percent of successful businesses will embed real-time analytics into key customer interactions.

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