American Customer Satisfaction Index Annual E-Commerce Report

American Customer Satisfaction Index
Annual E-Commerce
Report
February 21, 2006
Commentary and Analysis by Larry FreedPresident and CEO, ForeSee ResultsCUSTOMER SATISFACTION GAP WIDENS AS E-COMMERCE INDUSTRY MATURES; CLEAR LEADERS EMERGE After a slight decline last year, customer satisfaction with the e-commerce sector has started to rebound, with a year-over-year increase of one point, or 1.3%, to an aggregate score of 79.6. The fourth quarter 2005 American Customer Satisfaction Index (ACSI) E-Commerce Report measures the following industries within the e-commerce sector: e-retail, online auction, e-brokerage and online travel companies. (The report on the e-business sector, including portals, search engines and news and information sites, is released every August.)
Even with this increase, customer satisfaction with the e-commerce sector is still more than a point lower than it was two years ago, when the aggregate score was 80.8. Customers' standards for e-commerce sites continue to rise as the industry matures, and online companies have struggled to keep up with industry leaders and high customer expectations. At the same time, customer satisfaction with e-commerce sites remains substantially higher than the ACSI aggregate score for cross-industry customer satisfaction, which this quarter is a 73.5.
The stakes are higher than ever for e-commerce companies to get a handle on customer satisfaction. The lead article in the January 2006 issue of the Journal of Marketing detailed academic research proving a direct link between ACSI scores and stock prices. After articles appeared in BusinessWeek, Institutional Investor, CBS MarketWatch and other prestigious news outlets about the link, investors will start to demand that companies make customer satisfaction a top priority.
As the industries in the e-commerce sector mature, we are starting to see the emergence of clear leaders and laggards. A large gap in customer satisfaction scores is most notable in the e-retail industry, where 10 points separate category co-leaders Barnes & Noble and Amazon from 1-800-FLOWERS, and in online auctions, where there is a difference of nine points between leader eBay and the lowest-scoring auction site, Priceline. Even the e-travel industry, which had long experienced a lack of differentiation, has seen Expedia emerge as the leader in customer satisfaction in fourth quarter 2005. As consumer standards rise, the "best of the best" e-commerce organizations are increasingly standing out from the rest of the pack, challenging competitors in their categories to enhance their focus on customer satisfaction in order to compete successfully.
Several e-commerce companies reported significant gains in customer satisfaction from 2004. Charles Schwab experienced a significant increase of 4.2% to a score of 74; Expedia jumped 3.9% to a 79 and Amazon's score rose 3.6% to 87. Amazon's score of 87 ties it with For More Information Barnes & Noble at the top of the ACSI e-commerce industry, indicating that these two 1.800.621.2850 organizations are doing an outstanding job of meeting the needs and exceeding the www.ForeSeeResults.com expectations of their online customers.
Category Q4 2000 Q4 2001 Q4 2002 Q4 2003 Q4 2004 Q4 2005 % Change Score Score Score Score Score Score Q4 2004-2005ACSI Aggregate 72.6 72.6 72.9 74.0 73.6 73.5 -0.1%Retail Aggregate Score 72.9 74.8 74.6 75.0 72.6 72.4 -0.3%Commercial Banking Aggregate Score 70 72 74 75 75 75 No changeE-commerce 75.2 74.3 77.6 80.8 78.6 79.6 1.3%
E-Commerce Sub-Groups: E-Retail 78 77 83 84 80 81 1.3%Online Auctions 72 74 77 78 77 78 1.3%Online Travel N/A N/A 77 77 76 77 1.3%Online Brokerage 72 69 73 76 75 76 1.3%
Trends in E-Commerce Sector Industries85)elacs tp 0 8001( noitc 75afsitaS eta 70gerggA 65 2000 2001 2002 2003 2004 2005Brokerage AuctionsRetail Travel
The chart above shows the gradual increase across all industries measured as part of the e-commerce sector and the significant lead enjoyed by the e-retail industry in particular.
Comparison of ACSI E-Commerce Scores to Other ACSI ScoresFor More Information E-retail continues to have the highest aggregate score of the four measured industries 1.800.621.2850 in the ... [download for more]