January 18, 2012, 2:24 PM

Retailers need to temper consumers’ expectations

Disappointment over a lack of large discounts led shoppers’ satisfaction to dip over the holidays.

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Every week last holiday season, save the week leading up to Christmas, shoppers were less satisfied than they were a year earlier, according to results from ForeSee's weekly holiday benchmark index, which analyzes consumers’ responses to surveys completed after a visit to one of the 159 individual web sites ForeSee includes in its index. Among the retailers included in the index are Belk, eBags and the Home Depot. Belk is No. 296 in the Internet Retailer Top 500, eBags is No. 114 and Home Depot is No. 43.

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.

Shoppers expected to find deeper discounts than e-retailers offered, says Larry Freed, president and CEO of ForeSee, and this translated into lower satisfaction rates. . “Consumers’ expectation that they’ll get large discounts grows higher every year,” he says. “This is case where retailers were slow to meet consumers’ expectations of better prices.”

As daily deal sites continue to grow and consumers grow more sophisticated about comparing prices via their mobile devices, shoppers are under the expectation that they won’t have to pay full price, which occasionally causes them to wait until a price drops before they make a purchase , says Freed. But while consumers waited, some found that the item had sold out. “As retailers get better at predicting their needs, it is reducing some of their need to discount prices,” Freed says. “Which may be frustrating shoppers looking for a deal.”

ForeSee’s holiday benchmark index results stand in contrast to its annual Holiday E-Retail Satisfaction Index, which analyzes satisfaction for consumers at the top 40 retailers in the Internet Retailer Top 500 Guide. The average score for the 2011 holiday season was 79, up a point from 78 in 2010, and up from 74  in 2005. A score of 80 is considered ‘excellent’ by ForeSee.

Those results indicate that larger retailers are doing a better job than smaller merchants of meeting consumers’ needs, Freed says. “Some of it is the ability to allocate resources, some of it is their ability to plan for pricing,” he says. “That divergence is a challenge for smaller retailers.”

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