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FGI Reasearch’s Top 10 of the 2006 Customer Satisfaction Index:

As the popularity of online shopping is increasing, more and more consumers are trying the convenient services offered by many e-tailers. For example, Netflix, an online DVD rental service, has reached an all time high of six million customers and that number remains to grow. Since its start in 1999, Netflix has become the largest online DVD rental service. Not to mention that FGI Research found that Netflix holds the top spot in the 2006 Online Retail Satisfaction Index. Another top player is Amazon.com (an online only service providing books, music, games, etc.), holding the second spot (Hall). Larry Freed, president and CEO of ForSee says, Amazon is"…developing as a hybrid between a shopping site and a comparison shopping research tool”(Kavilanz).

Though Netflix and Amazon.com are at the top of the e-commerce industry, “click and mortar” retailers, those that offer online shopping as well as shopping in physical stores, started heightening competition with “pure-play”(online-only) retailers during 2006 holiday season. For example, both Sears.com and JCPenny.com showed the most improvement in their online profits. By enhancing their website’s look and making its usability and functionality easier, Sears and JCPennys increased their online profits. Freed was surprised with the improvement of these multi-channel retailers: “ in the past we have generally seen the pure-play Internet retailers outshine the traditional multi-channel retailers [but] if these traditional multi-channel retailers can keep focused on the customer and continue to achieve these types of improvements, they will [become] a tough set of competitors for the pure-play online retailers” (Kavilanz). Other improved sites having the best “year-over-year increase” were OldNavy.com and Target.com (Kavilanz). In fact, OldNavy.com even made the sixth spot in the 2006 Online Retail Satisfaction Index (Hall). Wal-Mart, however, did not fare well with its online profits. Though Wal-Mart is the world’s largest retailer, it ranked number thirty in the online index. Many people reason that Wal-Mart did not improve because of its new websites face-lift, which may have made their online shopping services more confusing than helpful (Kavilanz).

From the 2006 Holiday results, we see an increase in multi-channel retailers, but they still lack the unique ideas of “pure-play” e-tailers. However, if these “click and mortar” retailers continue to evolve from their brick and mortar heritage by implementing better online services, we will probably continue to see their customer satisfaction results climb. However, from Wal-Mart’s results, one can conclude that an appealing website design and easy-to-use features are key factors in increasing profits.