Amazon Leads Holiday Online Retailers Poll

Amazon has extended its lead in customer satisfaction rankings over Netflix and other US ecommerce groups, as winners and losers begin to emerge from a generally strong holiday season for online retailers.

A poll of 8,500 consumers for Foresee, a customer satisfaction consultancy, found that Amazon scored 88 out of 100 on its index, a two-point advance to the highest score of any retailer in the seven years since the survey began.

Netflix, by contrast, dropped seven points to 79 after a bruising year in which a 60 per cent price rise and an abortive attempt to split its DVD rental business from its online streaming service lost it more than 1m subscribers and left its shares down more than 60 per cent from the end of 2010.

"Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors," said Larry Freed, ForeSee's chief executive. "Customer satisfaction is predictive, which means that Netflix's financial woes may be just beginning," he added: "If satisfaction drops significantly, a revenue drop is likely to follow."

Shares in Netflix were down $2.27 or 3.1 per cent at $70.35 in lunchtime trading on Tuesday, while Amazon shares slipped 60 cents or 0.3 per cent to $176.68.

The two companies, which for several years enjoyed similarly high customer service scores, are coming into more direct competition as Amazon builds up digital media streaming services to supply content to its Kindle devices and to compensate for declining sales of the physical books, CDs and DVDs on which Jeff Bezos first began to build the business.

ForeSee's study found that Gap's clothing site and Overstock.com, which sells discounted merchandise, suffered declines of six points and five points respectively in the customer satisfaction rankings. JC Penney, under the new leadership of former Apple executive Ron Johnson, recorded one of the biggest gains, up six points to 83.

The survey found that US online shoppers are less price sensitive than in past years, with consumers citing price as their top priority for just one of the top 40 sites it measured. Instead, the range and quality of merchandise was cited as the priority by shoppers at 25 sites.

Analysts expect another year of strong growth for e-commerce sites. The National Retail Federation reported that US consumers intended to spend about 36 per cent of their holiday budgets online, up from 32.7 per cent a year ago.

IBM has predicted 9.5-10 per cent growth in December online sales, and said Christmas Day sales rose 16.5 per cent year on year, while early estimates from ComScore pointed to a 15 per cent advance over 2010 and a Shop.org survey found that 68 per cent of retailers expected at least 15 per cent growth in holiday season online sales year-on-year.

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