December 28, 2011, 10:13 AM

Holiday shoppers show love for Amazon

But Netflix drops in an annual customer satisfaction study from ForeSee.

Lead Photo Inc. took the title as the most satisfying retailer of the 2011 holiday season as judged by online shoppers, while Netflix Inc., usually a contender for that top spot, suffered a significant drop, according to a study released today by ForeSee Results.

The company, which analyzes customer satisfaction, says Amazon scored 88 points on a 0-100 scale in the seventh annual Holiday E-Retail Satisfaction Index. That is two points more than last year, ForeSee says. It based its findings on survey responses from more than 8,500 consumers who visited the sites of some 40 e-commerce operators. The company says it calculates its scores following a methodology from the American Customer Satisfaction Index, which is produced by a private company with ties to the University of Michigan. The index measures consumers’ thoughts and experiences regarding pricing, merchandising, site functionality  and site content.

Netflix, No. 13 in the Internet Retailer Top 500 Guide,  this year rated 79 points, seven points lower than last year, when the entertainment content provider tied with Amazon for first place. Ever since the debut of the holiday index, Netflix and Amazon, No. 1 in the Guide, have jockeyed for the top spot, ForeSee says. But Netflix’s recent troubles—a plan to increase fees and split its digital entertainment and DVD-by-mail businesses into separate units led to a 3.3% decrease in its U.S. subscriber base in the third quarter—helped drive down its customer satisfaction score this year, ForeSee says.

“Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors,” says Larry Freed, president and CEO of ForeSee. “Raising prices by 60% and splitting the baby into separate DVD and streaming services totally undermines Netflix’s cost and convenience advantages. Customer satisfaction is predictive, which means that Netflix’s financial woes may be just beginning.”

Amazon, meanwhile, continues to show how much it has evolved from an online bookstore, he says. “It now competes in almost every significant retail category and it is setting the bar very high for any company selling online,” Freed says. “E-retailers have consistently upped their game since we first started measuring holiday satisfaction in 2005, but Amazon is still the 800-pound gorilla of retail, and it just keeps getting better. It’s tough for a smaller retailer to compete with this level of dedication to providing an excellent customer experience.”

The average score for this year’s index was 79, up a point from 78 last year, and up from 74 from in 2005. A score of 80 is considered ‘excellent’ by ForeSee.

Besides Netflix, which experienced an 8% decrease in its score, the other retailers with the largest decreases were Gap (down 6% to 73) and (down 5% to 72).  The largest gains were from (up 8% to 79) and J.C. Penney Co. Inc. (up 6% to 83).

Here are the e-commerce operators in the index, followed by their 2010 holiday scores and then their 2011 holiday scores.

Amazon, 86, 88

Avon, 83, 83

J.C. Penney, 78, 83

Apple, 82, 83

VistaPrint, 80, 83

Newegg, 82, 82

Barnes and Noble, n/a, 81

LL Bean, 83, 81

Victoria’s Secret, 79, 81

Dell, 76, 80

eBay, 80, 80

HP, 78, 80

Sportsman’s Guide, n/a, 80

Williams Sonoma, 80, 80

Cabela’s, 77, 79

Costco, 79, 79

Kohl’s. n/a, 79

Netflix, 86, 79

Tiger Direct, 73, 79

Wal-Mart, 80, 79

Best Buy, 77, 78

Home Depot, 75, 78

Macy’s 75, 78

Neiman Marcus, n/a, 78

Staples, 78, 78

Nordstrom, 78, 77

HSN, 79, 76

Target, 77, 76

Blockbuster, 76, 75

Office Depot, 76, 75

Office Max, 75, 75

Sears, 74, 75

Toys 'R' Us, 77, 75, 77, 74

Sony, 76, 74

Gap, 78, 73

Overstock, 76, 72

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