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Customer Satisfaction With E-Commerce Dips

  |  February 17, 2009   |  Comments

Index shows online brokerage industry takes the biggest drop, while travel sites hold steady.

A weakened economy pulled customer satisfaction down 1.6 points in the e-commerce sector on the American Customer Satisfaction Index. The 2008 index was released today by the University of Michigan and e-commerce partner ForeSee Results.

Overall, online commerce sites scored 80 points -- on a scale of zero to 100 with 100 representing the top score. In this report the index examines three online commerce sectors: retail, brokerages, and travel companies.

Online brokerages saw the biggest drop in customer satisfaction, going from 79 points in 2007 to 74 points last year. TD Ameritrade saw the biggest decline, from 80 in 2007 to 71 last year. During that period, at least one TD Ameritrade investor filed suit against the brokerage, according to a published report. The investor claimed TD Ameritrade improperly marketed the Reserve Yield Plus as a money-market fund that would maintain its $1 share price.

For online brokerages, Freed attributed the drop in customer satisfaction to several factors, including "the struggle that the financial services industry had, the eroded trust that consumers have in some organizations." Other brokerage firms, he said, fared better by being proactive and helping consumers understand the economic volatility.

On the retail front, Newegg, which sells consumer electronics, recorded the highest score at 88, while eBay recorded the lowest at 78. Overall, online retailers had an aggregate score of 82 -- the highest of the three sectors in the report. Newegg's loyal customers "cite competitive prices, good product selection, and lightening-fast shipping," Freed wrote. In contrast, "eBay is losing its reputation for deals and discounts," he said, pointing out that site has less appeal when major retailers are aggressively slashing prices.

"Online retail continues to be a positive amongst the overall retail sector, and what online retail brings to consumers is ease, convenience, and great choice," Freed said. "Online retail did far greater than in-store during the holidays." The retail sector, which includes department stores, discount stores, specialty stores, supermarkets, and gas stations, earned a score of 75.2. While lower than its online counterpart it's up 1.3 percentage points in terms of customer satisfaction from 2007.

Online travel sites recorded an aggregate score of 75 in 2008, unchanged from the prior year. Expedia's score was 77, while Priceline.com had a score of 72.

"These travel aggregators, the transaction is done with them but their ability to service it is limited," Freed said in an interview with ClickZ. "Online [travel] retailers are trying to step up." Travel sites are aiming to do this through offering better reviews of hotels and destinations, and guarantees on reservations and transactions made on their sites.

Nearly every industry online channel outperforms its offline counterparts, according to ForeSee Results.

Here are the scores for the online sectors included in today's report:

Overall C-commerce, Aggregate: 80

Online Retail Sites, Aggregrate: 82

  • Newegg: 88
  • Amazon.com: 86
  • Netflix: 85
  • All others: 82
  • Overstock.com: 82
  • EBay: 78

E-Brokerage Sites, Aggregate: 74

  • Fidelity: 80
  • Charles Schwab Corp.: 78
  • All others: 74
  • TD Ameritrade: 71
  • E*Trade: 69

Online Travel Sites, Aggregate: 75

  • All others: 77
  • Expedia: 77
  • Travelocity: 75
  • Orbitz: 74
  • Priceline: 72


Enid Burns

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