Shoppers Find Less Satisfaction Online

As customers' expectations rise, giants like Amazon and EBay are finding it harder to keep people happy.

Erin Biba, Medill News Service

A new study has found that customer satisfaction with online shopping plummeted during the last holiday season. While some experts note that such dissatisfaction is often the result of rising expectations, others suggest that companies such as Amazon and EBay had better take note--or risk losing customers.

In the fourth quarter of 2004, customer satisfaction with online purchases fell by 2.7 percent from the third-quarter figure, according to the American Customer Satisfaction Index. That is the largest drop since the ACSI began tracking e-commerce in 2000. Though the index fell slightly in 2001, overall customer satisfaction has generally risen steadily until now.

Among the online retailers that the index tracks, Amazon and EBay took the biggest hits, though both companies still maintained relatively high customer satisfaction scores. On a 100-point scale, Amazon fell from 88 to 84, while EBay dropped from 84 to 80.

Rising Expectations?

One reason for the drop--according to Larry Freed, president and CEO of ForeSee Results, which cosponsors the index and analyzes the e-commerce portion of the results--may be that, as customers become accustomed to shopping online and receiving good service, they tend to become more demanding over time.

"I think to a great extent [customer's] standards have become higher and that's because of great service," Freed says. As expectations grow, customer satisfaction often falls, he notes.

Freed also posits a second possibility for Amazon's drop: a greater push for profits. Because Amazon, is a publicly traded company, it must grow in order to please its shareholders, Freed says. Unlike a traditional retailer that can open new stores, Amazon maintains a single online "location," so it must offer more products and services if it's going to expand, he says.

Amazon's resulting change from a specialty seller of books and music to more of an online shopping mall has made navigating its site more difficult for some customers, Freed says.

Regardless of the reason for the drop, Freed expresses confidence that the best online retailers will take the results as a wake-up call. "I think the drop in scores is actually a good thing for consumers," he says. "These companies are sharp, aggressive, and focused; and they will improve things."

Amazon: What Problems?

Amazon's executives say that they can't easily explain the recent drop in customer satisfaction, but they note that the company's scores are still relatively high. "We think it's a very good score, and we're going to continue to do what we do best: expand selection," says Patty Smith, director of corporate communications.

The company doesn't have any plans to change the way it handles customer service, Smith says. Amazon offers customer support primarily through its Web site via online forms that it says generate an e-mail response within a few hours.

The company also offers phone support, though it does not list its 800 number on its Web site Smith says that the company's number (800/201-7575) is listed in 800-number directories, but says that e-mail is a more efficient way to address problems.

EBay Problems Linked to Support?

The reasons for EBay's drop in customer satisfaction may be far different from Amazon's. ForeSee's Freed believes that EBay's problems lie in a shift away from its auction-site roots. Today the company focuses on businesses that sells goods and less on individual sellers who helped make the site popular in the first place.

"Now, a lot of small and midsize merchants are using the EBay platform to sell their products," Freed says.

Not unexpectedly, EBay sees things in a different light.

"We are very proud of the satisfaction that we hear from EBay customers," says spokesman Hani Durzy. And despite claims to the contrary, EBay still caters to the individuals looking to buy and sell goods online, he says.

"The vast majority of transactions that take place on EBay are from individual to individual," Durzy says.

The company's own internal studies show a high level of satisfaction from its customers, he says. "We do consistent internal studies of how pleased the EBay community is. In fact, a lot of our studies are done informally every day, every hour."

Recent news stories paint a slightly less rosy picture of EBay customer satisfaction, however. The company recently experienced problems with customer complaints due to poor phone and e-mail support. As a result, EBay says it will soon begin offering phone support to sellers and will eliminate auto-responses to customers seeking help.

Despite the bad news for Amazon and EBay, not all e-commerce sites saw a dip in their customer satisfaction ratings. In fact, specialty sites like 1-800-FLOWERS.com, and Priceline.com showed increased customer satisfaction.

That's because these sites have resisted the urge to be all things to all people and have remained loyal to their core principles, Freed says.