Amazon, Apple Soar In Customer Satisfaction In 2011; Netflix Plummets

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According to customer experience analytics company ForeSee, e-commerce giant Amazon once again topped consumer satisfaction in online retail after taking the top spot in 2010. However, Netflix, which had a dismal year, plummeted in customer satisfaction. For the past seven years, Netflix and Amazon have been competing for first place in Foresee’s Index, but this is the first year where one of the e-retailers saw a massive dip in sentiment.

Amazon climbed two points to score 88 on the study’s 100-point scale, which is the highest score from any retailer in 14 consecutive studies. Netflix’s well-publicized blunders, including price hikes last summer and the unsuccessful attempt to spin off the DVD rental business, caused its customer satisfaction to plummet by seven points and 8% to 79.

Netflix saw scores drop in every single element of the website that ForeSee measures, including site content, site functionality, merchandise, and prices. Next to Netflix, both Gap (down 6% to 73) and Overstock.com (down 5% to 72) saw the largest declines in satisfaction, leaving them with scores at the bottom of the Index.

Besides Amazon, the largest gains in satisfaction go to TigerDirect.com (up 8% to 79) and JC Penney (up 6% to 83), which nabbed Ron Johnson, former head of Apple’s retail operations, as CEO this year. Top-performing e-retailers include Amazon, Avon, JC Penney, QVC, and Apple.

The report also found that American consumers were less price sensitive during the 2011 holiday shopping season than they were last year, as price had a smaller impact on satisfaction than last year. Instead, for many e-retailers, improving merchandise and content would have a greater return on investment than price, says survey respondents.

Another key finding from the report related to repeat buying. Highly satisfied shoppers say they are 64% more likely to consider the company next time they are purchasing a similar product, 68% more likely to purchase from the retailer online, 48% more likely to purchase from the retailer offline, and 67% more likely to recommend the retailer to others. And analysis of top e-retailers in the United States has shown that, on average, a one-point change in website satisfaction was found to predict as much as a 14% change in revenue generated on the web.