"Despite the drop in satisfaction, e-commerce is still one of the best performing service sectors of the economy in all of ACSI, but it is far from immune to the challenging economic conditions," said online customer satisfaction expert Larry Freed, president and CEO of ForeSee Results. "It’s a tough environment to do business, but if there’s a silver lining to any of this it’s that the e-commerce sector remains strong and is well-positioned to capitalize on the benefits of satisfying customers when the economy stabilizes."
Online Brokerage
The economic downturn has been toughest on the online financial services industry, which plummets 6.3% to 74 on the ACSI’s 100-point scale. Each of the individual measured online brokerage firms also drops in customer satisfaction. TD Ameritrade suffers the biggest decrease in score of all measured companies in the industry, diving 11% to 71. This is the second largest decline of all 200+ companies measured by the ACSI in 2008 either online or offline, and the company’s financials directly reflect customer dissatisfaction. As of January 2009, TD Ameritrade reported that first-quarter profits plunged 23%.
Fidelity and Charles Schwab with scores of 80 and 78 respectively, maintain leadership positions even while suffering 5% drops in satisfaction. E*Trade drops 6% to 69, solidly in last place.
"It’s not surprising that online brokerage firms took a big hit in satisfaction, and its dive is largely responsible for the drop of the e-commerce sector overall," noted Freed. "The convenience of managing your investments online doesn’t mean much when you see your portfolio take such huge hits. Fair or not, that’s going to affect customer satisfaction."
Online Retail
After a three year climb, e-retail slips 1.2% to 82. A big decline by eBay, one of the largest and most prominent e-retailers, pulls down the aggregate score. eBay registers its worst performance ever, dropping 4% to 78. The leading online auction company is losing its edge, as discounts become harder to find and competition for goods drives prices higher. Also, major retailers are offering deeper discounts offline than ever before, giving customers less reason to shop for deals online.
"eBay is the only e-retail company measured by the ACSI to have lower satisfaction now than it did when it was first measured nine years ago, and that should be reason for concern," said Freed. "It isn’t keeping pace with the competition, and its revenues and stock price have followed suit."
Amazon continues to be one of the best performing companies in all of ACSI, despite a 2% drop to 86. The company reported strong financials and its best holiday shopping season ever. But record numbers of shoppers may have increased the incidence of shipping errors and other customer service gaps.
Computer and electronics e-retailer Newegg improves 1% to 88 to take the e-retail throne from Amazon. Netflix is up 1% to 85 in its sophomore year in the Index. Both companies have specific business models that target a much more limited audience than Amazon, which sells an enormous range of products. It is easier to satisfy a customer base that is shopping for specialized products than it is to satisfy customers that may want anything from books to TVs to shoes.
Online Travel
Customer satisfaction with online travel remains unchanged in aggregate year-over-year, though the industry has been slowly decreasing since 2002. The industry is going to need more than a boost in customer satisfaction in the wake of what industry experts predict to be the worst year for business and leisure travel since 2002.
Expedia(+2.7) and the All Others category (-2.5%) tie for first at 77. Travelocity comes in second place (+2.7% to 75) followed by Orbitz(+1.4% to 74). Priceline.com falls 1% to 72, the lowest scoring company in the industry.
