February 28, 2005, 12:00 AM

Cooling off

Consumers` satisfaction with e-retail fell 4.8% this year from last year, according to the American Customer Satisfaction Index, conducted by ForeSee Results Inc. It was the first time that measure has dropped since the e-retail category was introduced in the ACSI Index in 2000.

Consumers’ love affair with e-commerce is hitting its first bumps in the road as it matures, and the results from this year’s American Customer Satisfaction Index, conducted in partnership with ForeSee Results Inc., deliver something of a wakeup call. Consumers’ satisfaction with e-retail fell 4.8% this year from last year, according to the index. It was the first time that measure has dropped since the e-retail category was introduced in the ACSI Index in 2000.

E-retail is one of four e-commerce categories tracked by the index; its score was 80 on a scale of 100, down from 84 the previous year. With that score, it still fared better than offline retail, which was down 3.2% from last year with a score of 72.6. Factoring in results from other online categories tracked by the index including online auctions, online brokerage and e-travel, the e-commerce category overall was down 2.7% from last year with a score of 78.6.

Individually, heavy hitters Amazon.com Inc. and eBay Inc. both dropped in customer satisfaction since last year. Amazon dropped 4.5% from 88, one of the highest scores in the ACSI’s 10-year history, to 84. EBay dropped 4.7% to 80 from 84 last year. Still eBay retains a significant lead over its nearest rival in the auctions category, travel site Priceline. Satisfaction with Priceline is up to a score of 73, two points over last year’s score.

The decline across e-commerce reflects the fact that shopping online has become mainstream for more Americans, according to ForeSee Results CEO Larry Freed. In a world where consumers continuously expect more, “E-commerce sites must continue to improve customer satisfaction. Sites that remain stagnant, or are unable to differentiate themselves, eventually see customer satisfaction erode,” Freed says.

Diversification of the business model may be at the root of the decline in consumer satisfaction with mega-sites Amazon and eBay, Freed says. Many sites, notes Freed, have moved away from an original core focus to expand their offerings and services, attracting more consumers with differing expectations.

“By doing so, these organizations have changed their business models and diluted the brand, leading to declines in customer satisfaction scores,” Freed adds. “Bigger isn’t always better, from a customer’s viewpoint.”

The ACSI is produced by the University of Michigan’s Ross School of Business. The ACSI surveys users of measured web sites and uses a formula that weights various aspects of the online experience according to what most influences customer satisfaction and behavior.

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