Amazon’s Prime Directive Makes It No. 1 With Customers

For the eighth straight year, Amazon achieved the top position in ForeSee’s survey of customer satisfaction during the holiday shopping season.

Amazon maintained its No. 1 score of 88 out of 100 in the annual Holiday E-Retail Satisfaction Index.

Amazon “continues to do a great job in providing customer experience,” ForeSee CEO Larry Freed told CRM Buyer. “And the payback for them is that they continue to grow their revenue. Amazon has got a great formula right now.”

The Amazon Formula

The formula goes deeper than simply providing products online. Amazon builds and maintains its lists of consumers while it builds its broad product offerings. The online retailer also works on ways to provide information about products, which includes input from consumers.

“Amazon has an amazing list and it’s built an incredible level of trust,” Heidi Cohen, president of Riverside Marketing Strategies, told CRM Buyer. “They are the only retailer that forces you to sign in at points where other retailers couldn’t.”

Amazon uses purchase history as well as search history to keep a dialog with its customers. The site is has built content with publisher and manufacturer information as well as customer reviews and ratings. Consumers now turn to Amazon as a source of product information. While Amazon has been first in ForeSee’s ratings for eight years, it appeared in the top 10 search terms (as No. 10) for the first time this holiday season, according to Experian Marketing Services.

“Amazon is up there with that level of trust as editorial content. Amazon and Google are both publishers,” said Cohen. “Amazon is a community, it’s kind of like the Wikipedia of retail. It’s got all those ratings, reviews and commentary.”

In addition to content, Amazon Prime helps build customer loyalty and satisfaction. The annual subscription that provides access to media content such as movies, books and videos — as well as free shipping — became available as a monthly subscription as holiday shopping ramped up.

“Free shipping is something consumers have come to expect during the holiday season,” said Freed. “And Prime eliminates the barriers and hoops that some retailers still have. Prime does a good job in building loyalty to customers.”

Apple’s Shine Fading

One online retailer that didn’t rate as highly is Apple, which dropped from 83 last year to 80 this year. Apple previously tied for second place, however in the 2012 shopping season it ranks 24th in the top 100 online retailers ranked in the report.

“Apple scores are still strong with an 80, but they dropped three points,” said Freed.

While consumers will camp out in line at Apple stores for newly launched products, the information provided online does not necessarily engender such a following.

“The area to focus on with Apple to improve their experience has to do with improving the functionality of their site,” said Freed. “Consumers need help to better understand the product mix.”

With a range of tablets all named “iPad” Freed warns that Apple is approaching the “paradox of choice” conundrum where consumers freeze and don’t know what to do. “I don’t think they’re there yet,” he said. “The product naming and the product mix has really added a lot of complexity, and the website hasn’t kept up with the complexity.”

Customer Satisfaction Over the Holidays

Below Amazon, several online retailers climbed the list. LLBean.com rose four points in year-over-year change. Its score for 2012 was 85, up from 81 last year. QVC.com also rose one point to 84. Newcomers to the list, Vitacost.com (84) and Esteelauder.com (83) rounded out the top five positions in the report.

The report found that, in general, more Americans are shopping online. Roughly 39 percent of U.S. holiday shopping was done online this year, according to the National Retail Federation. With more attention, and money, being diverted to online shopping, retailers need to hone their sites to keep consumers happy.

Customer experience analytics aid retailers by providing direction on prioritizing improvements that offer the greatest results. Good experiences garner return customers. Highly satisfied shoppers are 67 percent more likely to consider the company for future purchases than shoppers who are dissatisfied with a website, ForeSee said.

“The value of providing a great customer experience is the loyalty,” said Freed. “There is a significant difference between likelihood to return, likelihood to purchase, and the likelihood to be loyal. Consumers have a lot of choice today, they’re going to go where they’re getting the best customer experience.”