Consumer Electronics Not Likely to be a Hot Seller Online Says New Study From cPulse - The Internet Satisfaction Monitor.

Business & Technology Editors

NEW YORK--(BUSINESS WIRE)--Dec. 12, 2000

Most holiday purchases will still be offline this year --

Web experience not keeping up with consistent levels

of customer support and service

Consumers won't be flocking to the Web to buy those big-screen TVs and fancy surround systems for this year's holiday, according to a new Web survey conducted by cPulse, the Internet Satisfaction Monitor.

Consumers' likelihood of purchasing consumer electronics online is falling and defection is high. In June approximately 25 percent of online consumer electronics shoppers interviewed stated that they were very likely to purchase from that particular site in the future. This number has fallen to just under 18 percent in September. Nearly 34 percent of consumer electronics site visitors qualified as defecting customers, versus just 17 percent of all commerce shoppers.

"We've seen everyone from brand name manufacturers to well known retailers to unknown dot com start-ups make a play for market share in the online consumer electronics industry," says Jody Dodson, cPulse executive vice president. "Unfortunately many of these e-tailers forgot what sells consumer electronics. It's customer support, both before and after the sale."

According to the survey, customer support is the single most under-delivered attribute for consumer electronics retailers. More than 50 percent of the 1,115 consumer electronics shoppers surveyed during the third quarter 2000 said they were extremely dissatisfied with the level of customer support received from these sites. Put into perspective, only 27 percent of online shoppers were dissatisfied with the customer support at non-consumer electronics sites.

"The average Internet consumer isn't ready to make a high risk purchase unless the appropriate levels of support and product knowledge are provided," explained cPulse analyst Michael Hochster. "Consumer electronics clearly fit the bill of a `high risk' purchase; they're expensive, they're consumed over several years, they require a high degree of specialized knowledge to understand and they're very visible to one's peers."

"Consumers need customer support to replace the advice and knowledge provided by in-store sales people, and the current delivery of online customer support attributes remains inconsistent throughout the industry," concluded Dodson.

Online order status checking, clicks for phone number support, hours of phone service shopping assistance and live chat were among the specific customer support features studied by cPulse analysts.

The research from cPulse's Satisfaction Solutions Group resulted from data collected from 2,548 interviews with consumer electronics site visitors between April 1 and September 30, 2000. cPulse uses patented 60-second interactive interviews administered via pop-up based technology. Actual Web site visitors are interviewed while they are on a Web site.

About cPulse

Based in New York, cPulse LLC, an independent Gartner Group, Inc. (NYSE: IT and ITB) company, was established in November 1998 to develop and market customer service solutions for Internet businesses. Created as a spin-off from CLT Research Associates, Inc., a leading Manhattan-based custom research firm, cPulse's mission is to provide Web-based businesses with the most simple and effective means to measure online customer satisfaction.

Today, cPulse is the only subscription-based, online monitoring service that measures customer satisfaction to provide meaningful Internet benchmarks and quantifiable user feedback. This product serves as an interactive service for customer-driven research and accurately compares competitive norms. It also unites real-time, actionable reports, with a fully customized turnkey solution based on business needs branded for the value-added reseller (VAR) community. Gartner purchased cPulse in November 1999. FreeRide Media also owns a portion of cPulse.

Web sites using cPulse technology include: GE, 3M, Bell Atlantic, Compaq, Verizon, Hewlett-Packard, Pfizer, Procter & Gamble, IBM, iVillage, Cincinnati Bell, InternetWeek, Dictionary.com, DVD City, United States Postal Service, Fathers.com, MIT, Lycos, MOMA.com, Time Magazine, GradSchool.com, Budget Rent-A-Car, Siemens, Chase Manhattan, Business.com, TV Guide Online, NewBalance, Nextel, SportingNews.com, Dell, AT&T, Sun Microsystems, Sports Illustrated, Wine Messenger, Yack.com and Ziff-Davis University.