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E-tailers Beat Out Retailers in Customer Satisfaction Survey

In its first-ever comparison between online and offline customer satisfaction levels, the American Customer Satisfaction Index (ACSI) Monday reported that etailers are succeeding in meeting shoppers' demands.

Customers are more satisfied with making retail purchases online than they are at shopping at traditional retail outlets, according to ACSI. In fact, satisfaction with online retail earned a score of 78 on a scale of 0 to 100.

Yet, Professor Claes Fornell, University of Michigan Business School, reminds etailers that service is crucial to longevity.

"Even though e-commerce provides higher levels of customer satisfaction overall, this is not true for all e-commerce companies," Fornell noted. "In view of the intense competition, the high cost of customer acquisition, and the ease by which customers can switch vendors and abandon their current suppliers, it seems safe to predict that companies that fail in satisfying customers will face difficult times."

Fornell developed the methodology for the study, which is produced in partnership with the University of Michigan Business School, the American Society for Quality and the CFI Group.

To represent e-commerce, the study selected 13 companies with the largest 1999 revenues in their respective categories: portals, retail, auctions, and brokerages. Those companies include Yahoo!, AOL, MSN, Amazon.com, Buy.com, Barnes & Noble, egghead.com, e-bay, uBid, priceline.com, 1-800-Flowers, Charles Schwab & Co., and e-Trade securities.

The findings included:

  • Customer satisfaction for the entire e-commerce sector is 73.2, which is high for a service industry.
  • Amazon.com scored an 84, higher than any service sector company in ACSI, and higher than Costco, which at 79 is the leader among traditional retailers.
  • Amazon.com's rating is also higher than all other major department and discount chains
  • Retail shows the highest satisfaction (78) with on-line brokerages and auctions both at 72.

The ecommerce ratings were released as part of a comprehensive report that is distributed quarterly. The ACSI reports satisfaction scores for more than 200 companies that provide goods and services to consumers, as well as about 30 government agencies.

Each quarter, the Index updates a different sector of the economy, covering over 40 percent of GDP on an annual basis. The Index scores individual firms, industries, sectors, and the economy overall on a 100-point scale where 100 is best.