Netflix, Amazon Lead Annual Top 40 Online Retail Satisfaction Index for Second Consecutive Year; ForeSee Results Report Suggests Online Satisfaction Key to Increasing Likelihood to Purchase, Recommend.

ANN ARBOR, Mich. -- For the second year in a row, Netflix and Amazon outperformed brick-and-mortar multi-channel merchants in online customer satisfaction on the annual Top 40 Online Retail Satisfaction Index. Yet even as online sales revenue grow, stagnant online customer satisfaction suggests a missed opportunity to turn browsers into buyers.

ForeSee Results and FGI Research produced the study, based on over 8,500 surveys of consumers who browsed the 40 highest-grossing e-retail sites, which scores and ranks web sites on the basis of how well they are delivering the kind of site experience site visitors want. The report found that high customer satisfaction is linked to higher likelihood to purchase and to recommend. Online shoppers for retailers in the top 10 percent of the Index were 33 percent more likely to purchase online than the bottom-performing 10 percent. Also, online shoppers were 16 percent more likely to recommend the retailers' site if it was one of the Index leaders, allowing these top-performing retailers to capitalize on the word-of-mouth marketing potential of highly satisfying retail websites.

"Online customer satisfaction is definitely a driver of customer behavior," said Larry Freed, an online satisfaction expert and CEO of ForeSee Results. "And for brick-and-mortar companies, superior online customer satisfaction can fuel sales in the offline channel as well."

ForeSee Results also announced updates to the Multi-Channel Value Index (MCVI), a measure of the total contribution of the website in supporting sales through all channels. This intangible value of online shopping is generally under-represented when consumers use the website as a research channel before completing a purchase via another channel, like a catalog or store. By and large, those companies scoring best on the MCVI also scored in the top half of the Top 40 Online Retail Satisfaction Index. This suggests that these web sites are doing a better job of leveraging their online presence to drive sales, even if the purchase is not completed online.

"Even with online revenues increasing, data suggest that brick and mortar retailers could do a lot more to improve the multi-channel customer experience, which would reap greater benefit to the bottom line," said Freed.

Three of the top-performing companies are web-only merchants. Netflix and Amazon scored 85 and 83 respectively on a 100-point scale. Newegg.com, an online retailer of computer and electronics products, scored 82 as did QVC. Multi-channel retailer Chadwicks.com showed the biggest gain from the holiday season, up 6.8 percent to 78, while BananaRepublic.com suffered the biggest drop, down 8.2 percent to 67, to become the lowest scoring site on the Index.

Surprisingly, the study found that the Internet has not become as price-sensitive a channel as expected. "Given the Internet's unrivaled convenience for comparing prices, one would think that price competition is a key driver of satisfaction in the online channel," said Freed. "But on the whole, other elements of the online shopping experience are more of a determining factor for satisfaction, loyalty and future behaviors, such as the likelihood to return, recommend, or purchase. Since price is rarely the primary driver of customer satisfaction among the Top 40 retailers, then companies must compete on other drivers, like merchandise selection, site experience (e.g search, product descriptions, etc.), or brand. That's good news for e-retailers because they can drive sales by investing in their web sites rather than cutting prices and undercutting their bottom line."

Other highlights include insights into the quality of site visitors driven to the website by search engines. Despite the substantial increase in online advertising dollars flowing to search marketing, search engines generated site visitors with the lowest satisfaction ratings (seven percent lower than the aggregate for all traffic sources) and the lowest likelihood to purchase online (10 percent lower than the aggregate). Top 40 retailers can generate better quality site traffic from a strong brand. Online shoppers driven to the site by familiarity with the retailer and its merchandise generated the most purchase-prone traffic and most loyal customers, evidenced by the highest likelihood to purchase from the retailer the next time they buy similar merchandise.

The study was produced in partnership with FGI Research, and is based on Internet Retailer's annual Top 400 Report on e-retailers' revenues. The report was produced using the American Customer Satisfaction Index (ACSI) methodology, a sophisticated scientific formula that predicts future consumer spending behavior. The full report is available for purchase at www.ForeSeeResults.com, and reporters can contact Chaat Butsunturn ([e-mail] or 415-391-7900, x114 for deeper findings).

About ForeSee Results

ForeSee Results is the market leader in online customer satisfaction management and specializes in converting satisfaction data into user-driven web development strategies. Using the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI), ForeSee Results has created a model that scientifically quantifies the elements that drive online customer satisfaction and predicts future behaviors, including the likelihood to purchase online or offline, return to the site or recommend the site to others. ForeSee Results, a privately held company located in Ann Arbor, Michigan, can be found online at www.ForeSeeResults.com.

About FGI Research

FGI Research is a leading provider of market research and information solutions that improve the speed, accuracy and impact of business decisions. By combining proven research methods, trusted online sample and advanced analytics and communications, FGI delivers to end users and marketing research firms immediate and actionable information to decision makers throughout their respective enterprises. FGI offers a premier suite of online research solutions under the SmartPanel family of specialty and proprietary custom research panels. For additional information, visit www.fgiresearch.com.