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THE ANSWERS™ EXPERIENCE INDEX2014 U.S. RETAIL EDITION

DECEMBER 2014

COMMENTARY AND ANALYSIS BY:

Jim Yang Senior Vice President of Products, Marketing and Services Answers

RESEARCH BY:

Julie Anderson Research Analyst Answers

© 2014 Answers

WWW.ANSWERS.COM/FORESEE | CUSTOMER EXPERIENCE ANALYTICS

2 T H E A N S W E R S E X P E R I E N C E I N D E X ( A X I ) : 2 0 1 4 U . S . R E TA I L E D I T I O N

TABLE OF CONTENTSAbout The Answers Experience Index (AXI): 2014 U.S. Retail Edition 2

Executive Overview 3

Section 1: The Multichannel Customer Experience 11

Section 2: Satisfaction by Channel 13

Section 3: Top Gainers 24

Section 4: What Drives Satisfaction? 25

Section 5: Why Do You Need to Focus on Your Retail Store Employees? 26

About the Author, Research Team, Answers Corporation, and ForeSee 27

ABOUT THE ANSWERS EXPERIENCE INDEX (AXI): 2014 U.S. RETAIL EDITIONFor a decade, this has been the definitive annual study in the market around the current state of the retail customer

experience. Employing the same industry-tested ForeSee methodology we apply when measuring customer satisfaction

for our clients, The Answers™ Experience Index (AXI): 2014 U.S. Retail Edition takes a broader view of the marketplace,

measuring the customer experience with the largest retailers in the United States as recognized this year by Internet Retailer’s

Top 500 web and mobile commerce sites and the NRF Stores Top 100 Retailers. We are proud of our consistent legacy of

thought leadership around driving customer experience excellence in the marketplace.

This year’s study focuses on retailers’ three most important customer touch points: chain stores, e-commerce websites and

mobile experiences. We fielded more than 40,000 surveys between October 26 and December 15, 2014. The data was then

analyzed using the ForeSee methodology, an advanced statistical engine proven by years of research. This methodology uses

the world’s most advanced cause-and-effect modeling to radically change the way organizations make strategic investments

and decisions for better bottom-line results.



EXECUTIVE OVERVIEWAs the 2014 holiday shopping season reaches its final (and chaotic) homestretch, we have put the final touches on our

Answers Experience Index (AXI): 2014 U.S. Retail Edition. It’s been another exhilarating year of learning, and we’re excited

about the latest emerging industry trends.

This was a holiday season that saw overall customer satisfaction scores decrease (compared to last year) for retail chain

stores and e-commerce websites, with scores for mobile sites and applications remaining flat. This was driven largely by

a rising tide of customer expectations. Today’s shoppers are far more savvy than yesterday’s shoppers; they are deeply

multichannel, multi-device shoppers who are performing much more research in each channel and across channels, and

seeking out more information from competitors’ stores and online resources. They are also immersed in steeply discounted

deals much earlier in the shopping season from many premium retailers, which further increases their expectations on the

types of deals they can find. While there is much dialogue about these concepts, this study illuminates the importance of the

dynamics involved.

The 2014 holiday shopping season will forever be remembered as a watershed year for U.S. retailers:

» Amazon customer satisfaction has dropped significantly. After six years of being the unquestioned leader in our

study results, Amazon no longer stands alone as the preeminent online retailer.

» The multichannel shopper emerged as the most relevant shopper for retailers.

» Cyber Monday finally overtook Black Friday as the most important shopping day of the year.



These are just some of the many findings that have come out of our Answers Experience Index (AXI): 2014 U.S. Retail Report,

our annual multichannel customer experience study of consumer holiday shopping experiences and behaviors.

The holiday shopping season kicks off earlier and earlier every year, and so did we this year. In late October we started

surveying Americans shopping online, via mobile apps, and in retail chain stores. All told, we collected more than 40,000

survey responses. This study reports customer satisfaction scores for the top 100 retail websites, top 30 retail chain stores

and 30 retail mobile experiences. Our goal is to give retailers a much better understanding of today’s multichannel, multi-

device consumers.

This is our 10th year conducting this study, and this year’s findings are perhaps the most compelling yet. As mentioned earlier,

the 2014 holiday shopping season has been very meaningful for the retail industry. This season portends several notable

industry shifts whose collective impacts will be felt for years to come.

Here are the overall customer satisfaction scores by channel (Figure 1).

CUSTOMER SATISFACTION: AVERAGE SCORES BY CHANNEL

WEB MOBILE STORES CALL CENTER SOCIAL MEDIA CUSTOMER RELATIONSHIPS



78STORES

77WEB

79MOBILE

FIGURE 1

With this broad industry perspective, let’s dive into some deeper insights on the customer satisfaction of shoppers this

holiday season.



AMAZON’S LEADERSHIP HAS COMPLETELY ERODED

Since we began measuring in 2005, Amazon has led the online retail universe on customer experience for websites and

mobile, by a wide margin. In fact, over the last three years, Amazon has been an average of 3+ points ahead of its nearest

website and mobile competitors in a world where the scores of the top online retailers have tended to cluster together.

That has all changed this year. While Amazon still scores highly, it has come back to the pack and is now tied with QVC for

e-commerce websites, with a customer satisfaction score of 83. While this is a superior score in our methodology, Amazon

should be concerned about their decline.

Did Amazon suddenly stop paying attention to its customers? Unlikely. Rather, today’s customers have evolved and have

become tougher to satisfy. For one thing, more and more retailers are trying to get a jump on Black Friday by launching door-

busting promotions and deals earlier in the holiday season, so consumers are becoming conditioned to expect deep discounts.

This in turn raises their expectations on the bargains they can get from their retailers. The data bears this out. Over the past

year, Amazon customers have become more dissatisfied with Amazon pricing relative to competitors, as witnessed by the

5% decline in the Price score. Many customers noted that shipping costs were too high at a time when many other mass

merchants were offering free shipping. Amazon customers are also accessing other online resources and competitors’ sites

more frequently than they did in 2013.

Amazon’s decline in customer satisfaction also came with a decline in important future customer behaviors. This year, Amazon

shoppers are less likely to recommend Amazon to others, less likely to purchase again from Amazon, and less likely to remain

committed to Amazon as a customer.

THE MULTICHANNEL SHOPPER RULES THE DAY

While it appears that consultants get paid based on the number of times they say that the consumer is a multichannel

shopper, perhaps putting some hard data against the statement will get retailers to start acting in a way that demonstrates

they understand it. This holiday season saw a significant jump in multichannel shopping and showrooming (i.e., using a mobile

phone to research or purchase while in a store). This is a highly observed trend across all channels, as the typical shopper now

shops across 3.25 channels before purchasing, compared to 1.25 channels in 2010 (source: Rakuten Marketing). This year,

68% of in-store purchasers said they visited the store’s website on their phone while in the store, compared to just 55% last

year. Having rich content on their mobile site is critical for retail chain stores, since 46% of showrooming shoppers are buying

in-store anyway. In-store purchases still account for the vast majority of retail transactions. This fact often causes retailers to

be very myopic on store-based measurements. Our data shows the potentially fatal flaw in this narrow view.

Multichannel shoppers are not just more active shoppers; they’re generally more satisfied shoppers, which makes them

ultimately more valuable to retailers. Specifically, shoppers who purchased in store but accessed multiple channels to

research those purchases are more likely to do the things in the future that are critical to retailers’ success. For example, they

are more likely to purchase again and more likely to recommend the retailer to others (Figure 2).



Satisfaction Purchase Next Time Recommend Company

Multichannel 79 81 82

Single Channel 77 79 80

FIGURE 2: ANALYSIS OF STORE PURCHASERS (ACROSS ALL STUDIES)

When looking at multichannel interaction in general (i.e., not necessarily associated with a particular purchase), we find even

more evidence that multichannel shoppers are more satisfied and more apt to exhibit the future behaviors that retailers desire

(Figure 3).

FIGURE 3

SINGLE CHANNEL

61%SATISFACTION 77

BRAND COMMITMENT 76

PURCHASE NEXT TIME 77

RECOMMEND 78

RETAILER SATISFACTION 80

2 CHANNELS

27%SATISFACTION 79

BRAND COMMITMENT 78


RECOMMEND 81


3+ CHANNELS

12%SATISFACTION 81

BRAND COMMITMENT 82


RECOMMEND 84


With this ongoing shift to multichannel shopping, retailers who can innovatively enable today’s increasingly complex

shopping experience will win over tomorrow’s demanding multichannel consumers. You’ll find more detailed learnings on the

multichannel shopper in Section 1 of this report.



FIGURE 4

WEB STORE MOBILE

28%

19%28% 20%29% 21%29%

17%

8%

25%

17%

9%

26%

17%

7%

n Early October n Late October n Early November n Late November n Early December

WHEN DID YOU START SHOPPING?

BLACK FRIDAY IS NOT WHAT IT USED TO BE

Let’s face it. The holiday shopping season starts earlier and earlier every year. And while Black Friday continues to kick off

the “official” holiday shopping season, retailers are actually launching their seasonal promotions and super deals weeks

in advance of Black Friday. Consumers have figured out that there are great deals to be had before and after Black Friday,

inclusive of Cyber Monday but certainly not limited to that.

Across web, store and mobile channels, holiday shoppers are starting their shopping early. Here’s when holiday shopping

starts by channel (Figure 4).

As you can see, 75% of web shoppers, 74% of store shoppers, and 76% of mobile shoppers have already started shopping

by the time Black Friday rolls around, and the urgency has already dissipated for many of these shoppers. For those who are

still shopping into late November, it’s not surprising that just as many consumers will be shopping on Cyber Monday (47%) as

will be on Black Friday (44%). Similarly, mobile shoppers are more likely to be shopping on Cyber Monday (53%) than more

traditional e-commerce (desktop) shoppers (45%).

This data implies that retailers need to increase their focus on Cyber Monday and, more broadly, on all consumer shopping

days. Through their promotions and advertising, the retailers themselves were the catalyst for the earlier shopping

phenomenon. But with so much focus on Black Friday, have these same retailers capitalized on the trend? A lot of retailer

energy, and margin, is going into Black Friday. Retailers should begin to question whether the consumer is noticing and figure

out how to meet shoppers throughout their continuous journey.

Through customer experience analytics, retailers can obtain a better understanding of the different aspects of the consumer

shopping journey and how to prioritize opportunities to improve their customer experiences—especially in a world where

today’s shopper is more sophisticated than ever.



SHOPPERS ARE GETTING SMARTER AND MORE SELECTIVE

Shoppers are doing much more research before they buy, and never has this been more evident than this holiday season.

Whether it’s through websites, mobile apps or retail storefronts, consumers are visiting more stores more frequently,

researching products and reading reviews, and figuring out how much they should be paying. For instance, the average online

shopper has 9.5 distinct interactions with a brand before purchasing, compared to 2.5 just three years ago. It doesn’t take

a statistician to figure out that this is a dynamic change in shopper behavior. Online pre-planning and research is now the

norm for shopping, let alone holiday shopping. Retailers who judge web and mobile site performance solely on a conversion-

based metric are clearly missing this dynamic. This is particularly true in the retail chain store channel, where shoppers are

(compared to last year):

32% MORE LIKELY to visit a particular

retail chain store’s website 114% MORE LIKELY to visit a

comparison shopping website


retail store’s competitors’ websites 89% MORE LIKELY to use other online

resources to research

Clearly, shoppers are continuing to push the envelope in becoming as informed as possible before making their purchase

decisions. Retailers are enabling this evolution by making the right information available to consumers across all channels.

What’s the next great enabler? Retailers are readying themselves for mobile payments.

MOBILE PAYMENTS ARE NOT READY FOR TAKEOFF

We heard plenty of buzz this year about mobile payments. Apple launched its Pay service to make it easier for iPhone users

to pay securely in stores or within apps. Google launched similar capabilities with its Wallet for paying in stores and online, or

paying anyone with a Gmail address, for that matter. There is no doubt with two industry titans deciding to establish this space

that it will get a lot of attention in the next few years. The question is this: In the consumer’s mind, is there a viable solution

available today?

It’s clear that shoppers are not even close to adopting the payment vision that Apple and Google are pushing. This season,

more than 60% of shoppers said they would never use a mobile payment service like Apple Pay or Google Wallet to purchase

items in a store. Interestingly, the 40% who said they might use such a service were twice as likely to choose Google Wallet

over Apple Pay. It’s fair to say that Apple is investing heavily to change that mindset.



RETAIL CHAIN STORES NEED TO FOCUS ON MERCHANDISE AND SERVICE

According to the consumer, the shopper experience in retail chain stores hasn’t changed much in the last year. Overall, this

channel saw a drop to 78 from 79 last year. The leaders in retail chain store satisfaction are Barnes & Noble, Apple, Saks Fifth

Avenue, Advance Auto Parts and Ann Taylor, all companies that consistently score high in customer satisfaction.

Our measurement methodology shows that the most important investment priority for retail chain stores is to improve their

merchandise (appeal, variety and availability of product), as 72% of the retailers measured had merchandise as the most

powerful satisfaction driver for their consumers. This was the most important satisfaction driver last year as well, so it’s clearly

something retailers need to be focusing on. Another top priority for many retailers is the service quality of store personnel.

At the end of this report, we highlight some upcoming, ground-breaking research that shows how engaged store employees

impact customer satisfaction for retailers.

Another key finding is that retail store customers have become multichannel customers in a big way. Thirty-seven percent

of customers who made an in-store purchase have also purchased on their phones (compared to 31% in 2013), and 23%

have used the retailer’s app (compared to 21% in 2013). Further, this year store purchasers are far more likely to begin their

research online (50%) than last year (35%), including visiting that store’s website and competitors’ websites. Retailers have

long talked about the purchase-funnel concept. The reality is pretty clear that the purchase funnel is not confined to a single

channel. While retailers obviously know this to be true, with an overall decline in customer satisfaction the data begs the

question as to whether the retailers are prepared to respond.

CHANGING OF THE GUARD IN E-COMMERCE WEBSITES

Amidst Amazon’s falling back to the pack of leading retail customer experiences, as noted earlier, there was a slight decline

in customer satisfaction across the board for this category, as customer experience scores dropped from 79 in 2013 to 77 in

2014. At the top, Amazon, QVC, L.L.Bean, Netflix and Avon are bunched together within 1 point of one another.

E-commerce shoppers have been much more diligent in their research this year compared to last year. They are:


e-commerce site’s competitors’ websites 52% MORE LIKELY to use a

comparison shopping engine

49% MORE LIKELY to use other online

resources to research

23% MORE LIKELY to visit a particular e-commerce site’s retail chain

store and 82% more likely to visit competitors’ retail chain stores

62% MORE LIKELY to ask people who

knew about a particular product



Similar to in-store experiences, our analysis indicates that the most important investment priority for e-commerce was merchandise,

as 53% of the websites measured have merchandise as the most powerful satisfaction driver. Twenty-six percent have site

functionality as the leading satisfaction driver, and 19% have product content. These figures are similar to last year’s figures.

MOBILE SHOPPING CONTINUES ITS AWESOME GROWTH

Overall, the mobile shopping experience has remained the same as last year, coming in at an aggregate score of 79.

2014 saw mobile shoppers get far more comfortable using their smartphones for research and transacting. This year, 77% of

mobile shoppers are using their smartphones to research products, compared to 55% last year. That growth rate simply cannot be

ignored. Even more notable is how comfortable they are in transacting with their smartphones. Amazingly, 42% of mobile shoppers

made purchases through their smartphones, compared to just 25% last year. Mobile has truly evolved from simply playing a

shopping research role to becoming an indispensable enabler of the purchasing process. Those retailers who continue to see

mobile as a secondary channel will be left behind competitors who have fully accepted mobile as a primary path to purchase.

Similar to its e-commerce customer satisfaction, Amazon’s mobile customer experience score has dropped significantly this

year, falling from 87 to 83. This is still good enough to lead the mobile category, but Amazon is closely followed by Fanatics

and L.L.Bean, each with a score of 82. The drop is not surprising considering that over the past year competitors have caught

up to Amazon in matching innovative mobile functionality, such as off-canvas navigation and seamless connection back to

their websites. In a sea of rising customer expectations, Amazon customers are less satisfied than they were last year. For

such an innovative company, the challenge will be to innovate faster. Prior-year innovations have become the norm. It is

always toughest to run the race from the front.

HOW THE FINDINGS ARE ORGANIZED

Overall, it’s been a remarkable 2014 holiday shopping season. We’re witnessing very important industry shifts as they relate to

Amazon’s fall as the preeminent online retailer and as multichannel shoppers begin to fully realize the potential of being able

to engage with their favorite retailers anytime, anywhere, on any device they choose.

We have analyzed in detail the above industry dynamics and are pleased to share our data and our findings. This study is

divided into the following sections:

» The Multichannel Customer Experience

» Satisfaction by Channel

» Top Gainers

» What Drives Satisfaction?

» Why Do You Need to Focus on Your Retail Store Employees?



SECTION 1: THE MULTICHANNEL CUSTOMER EXPERIENCEAs this holiday season has demonstrated without a shadow of doubt, today’s consumers are multichannel, multi-device

shoppers who seek out retailers anytime in the manner that’s most convenient in the moment. Thus, there is a retailer

imperative to create high-quality experiences across all customer touch points and to ensure that customers have consistent

brand experiences in every interaction.

Figure 5 below lists all of the companies in this retailer multichannel study for whom Answers has measured retail chain store,

web and mobile customer experiences. For a retailer, having a holistic view of customer satisfaction across all three of these

channels is key to understanding where they need to focus their improvement efforts.

Company Web Store Mobile

Apple 80 82 80

Barnes & Noble 78 83 80

Best Buy 77 78 78

Costco 78 80 79

CVS 76 75 75

Dick's Sporting Goods 76 77 77

Gap 75 76 79

Home Depot 79 79 77

JCPenney 77 76 78

Kohl's 80 79 79

Lowe's 78 79 77

Macy's 78 76 76

Nordstrom 77 80 80

Office Depot 77 78 79

Sears 75 74 76

Staples 77 77 80

Target 73 80 78

Toys "R" Us 77 73 78

Victoria's Secret 78 80 80

Walgreens 77 75 77

Walmart 78 71 79

FIGURE 5: CUSTOMER SATISFACTION SCORES FOR MULTIPLE CHANNELS



Here are some other notable takeaways from the multichannel perspective:

» For retailers with consistently highly rated customer experiences across all of their channels, Apple and Barnes

& Noble again lead the way. They are the only retailers to average above 80 across their web, retail store and

mobile channels this year and last year.

» Apple is being challenged to keep up with the rising expectations of their customers. Their customer satisfaction

scores are down for each channel relative to last year, especially in mobile where they have dropped from 82 to 80.

» It’s worth noting that Barnes & Noble’s high scores come at a time when the company is experiencing a bit of a

resurgence. Its stock is trading near its five-year high as it focuses on improving its product mix and executing a

better merchandising strategy. It appears that their recent strategy is working.

» Barnes & Noble has solid multichannel customer satisfaction scores, carried by its industry-leading retail store

experience score of 83. Maintaining and improving world-class retail store customer experiences is a strategic

mandate for the last-standing retail bookstore chain, and in fact, their retail store customer satisfaction score

is even higher this year than last year. However, where Barnes & Noble is falling short, ever so slightly, is in

generating high customer satisfaction in their e-commerce channel. With a 78 customer satisfaction score,

Barnes & Noble clearly suffers from the sky-high expectations that have been set by the web’s leading bookseller,

Amazon. Looking for more ways to leverage their retail store dominance in the web channel would appear to be

one way Barnes & Noble can deliver satisfying customer experiences that Amazon simply can’t.

» Costco, Kohl’s, Nordstrom and Victoria’s Secret also deserve shout-outs for scoring consistently high across all of

their channels.

» On the other hand, there are retailers who are delivering good customer experiences in two of three channels but

are falling short in the third. Most notable among these is Walmart, the world’s largest retailer. Walmart has done

well with their pricing and assortment strategies. Moreover, Walmart customers are fairly satisfied in their digital

channels (web and mobile). However, they are relatively dissatisfied in their retail stores. Walmart scored the

lowest in customer satisfaction among the 30 largest retail chain stores that we included in this study. Improving

retail store customer experience is critical for Walmart’s future. Our findings clearly indicate that customers

are increasingly approaching shopping as a multichannel exercise, and their expectations are increasing as

more retailers are creating superior customer experience in all of their channels. This, in conjunction with their

successful pricing and assortment strategies, should set up Walmart for even greater successes in the future.



SECTION 2: SATISFACTION BY CHANNEL This year, we’ve taken a deep look at customer satisfaction for the top U.S. retailers in three of their most important channels:

retail chain stores, websites and mobile sites and applications. Figure 6 shows the average satisfaction scores over the past

several years for each of these channels.

FIGURE 6: AVERAGE SATISFACTION SCORE BY CHANNEL AND YEAR

70

72

74

76

78

80

82

84

86

88

90

2014201320122011

Stores

Websites

Mobile Sites & Applications

For Stores (Figure 7), we calculated customer satisfaction scores from surveys completed by shoppers who purchased from

the retailer during the 2014 holiday shopping season. For websites (Figure 10) and mobile sites and applications (Figure 12),

we surveyed shoppers who visited the e-commerce website, whether they were browsing or purchasing.



RETAIL CHAIN STORE SATISFACTION

Store customers have become omnichannel customers in a big way. Thirty-seven percent of customers who made an in-store

purchase have also purchased on their phones (compared to 31% in 2013), and 23% have used the retailer’s app (compared

to 21% in 2013). Further to this point, this holiday season store purchasers were far more likely to begin their research online

(50%) than last year (35%), particularly to visit that store’s website.

It’s noteworthy that Walmart, the world’s largest retailer, continues to bring up the rear when it comes to customer satisfaction.

In fact, their customer satisfaction scores have been in a steady decline since 2011. A closer look at the Walmart data

uncovers the following:

» Surprisingly Walmart, with its “Save money. Live better.” strategy, scored lowest on Price among its customer

satisfaction elements, suggesting that its customers are not viewing its prices to be as competitive as they expected.

» During this holiday shopping season, Walmart customers were more likely to consider other retailers and look at

competitors’ websites when shopping for a product, compared to previous years.

» Another indication that Walmart is losing its customers’ loyalty is that only 8% of its customers said Walmart was

the only retailer they considered, compared to 17% in 2013.

Despite these findings, Walmart is doing something right. Their stock is trading near an all-time high. But the stock market is a

today phenomenon. Customer satisfaction is predictive of future results.

Figure 7 below provides customer satisfaction scores for retail chain stores.

Company Name 2011 2012 2013 2014

Average Satisfaction Scores Across Stores Measured 82 79 79 78

Barnes & Noble 84 82 82 83

Apple 85 83 83 82

Saks Fifth Avenue nm nm nm 82

Advance Auto Parts nm nm 80 81

Ann Taylor nm nm nm 81

Costco 84 82 82 80

Neiman Marcus nm nm nm 80

Nordstrom 84 79 83 80

OfficeMax nm nm 80 80

Target 82 81 81 80

(Continued on page 15)

FIGURE 7: CUSTOMER SATISFACTION SCORES FOR STORES



Company Name 2011 2012 2013 2014

Average Satisfaction Scores Across Stores Measured 82 79 79 78

Victoria’s Secret nm nm 83 80

Williams-Sonoma nm nm nm 80

Foot Locker nm nm 78 79

Home Depot 81 79 81 79

Kohl's 84 81 81 79

Lowe's nm 81 81 79

Best Buy 80 80 79 78

GameStop nm nm 81 78

Office Depot 81 79 80 78

Abercrombie & Fitch nm nm nm 77

Dick's Sporting Goods nm nm 78 77

Staples 82 79 80 77

Gap nm nm 77 76

JCPenney 85 75 76 76

Macy's 81 80 80 76

CVS nm 76 77 75

Express nm nm nm 75

Walgreens nm 78 80 75

Sears 77 74 76 74

Toys “R” Us 79 72 72 73

Walmart 77 75 73 71

nm = not measured

FIGURE 7: CUSTOMER SATISFACTION SCORES FOR STORES (Continued from page 14)



FUTURE BEHAVIORS: WHY STORE CUSTOMER SATISFACTION MATTERS

In-store customer satisfaction has a significant impact on a retailer’s overall business. Our analysis found that when compared

to a dissatisfied shopper (Satisfaction score of 69 or lower), a satisfied shopper (Satisfaction score of 80 or higher) is far more

likely to purchase in the store and online for that retailer, be a repeat purchaser for that retailer, and engage in positive word of

mouth recommendations.

Below, you will find the quantification of how much more valuable satisfied store customers are than dissatisfied store

customers, with respect to how much more likely they are to exhibit desired future behaviors, as computed by the ForeSee

methodology (Figure 8).

Highly satisfied customers are x% more likely than dissatisfied customers to …

… purchase from that retailer in the store 40%

… make a purchase from the retailer in another channel 62%

… buy from that retailer the next time they buy similar merchandise 63%

… recommend the store to a friend, family member or colleague 49%

FIGURE 8: FUTURE BEHAVIOR LIKELIHOOD SCORES FOR THE STORES CHANNEL

E-COMMERCE WEBSITE SATISFACTION

For the first time since 2010, Amazon is not alone at the top in customer satisfaction scores for e-commerce websites. This

year, QVC tied Amazon at 83. Trailing the co-leaders by just 1 point at 82 is a cluster of other strong web brands: L.L.Bean,

Netflix and Avon. Notably absent from the leaderboard is Apple, which fell to 80 in this year’s customer satisfaction rating.

In general, our findings indicate that e-commerce shoppers are becoming more savvy: they are significantly more likely to

research on competitors’ sites this year (41%) than last year (35%) and are more likely to use a comparison shopping website

this year (21%) than last year (16%).

It’s also worth mentioning that sites requiring subscriptions (e.g., Gilt, Groupon Goods) may see customer satisfaction scores that

are artificially understated because customers need to be members to take advantage of deals. A study focused on subscriber

satisfaction (rather than one which includes casual visitors) would certainly result in higher customer satisfaction scores.

FUTURE BEHAVIORS:STORES



The big news here, of course, is that Amazon has dropped 5 points from its all-time high of 88 in 2013. A closer look at

Amazon’s performance reveals the following:

» Overall, Amazon’s customers are more dissatisfied than last year, and they have come to expect more than

Amazon can deliver against.

» This year, Amazon scored much lower on customers’ assessments of the fairness of product prices on Amazon

and the general competitiveness of their prices.

» Amazon fell short against both its customers’ expectations and their vision of what an ideal website should be.

In prior years, Amazon has been considered an innovator and, as such, scored considerably higher on these

satisfaction components. It’s possible that Amazon has reduced its focus as it continues to diversify into other

businesses such as tablets and phones. It will be interesting to see what Amazon does to react to the declines, as

no one expects them to stand pat.

Why should Amazon care about customer satisfaction? Because it impacts the future behaviors of its customers. In Figure 9,

you’ll see that the year-over-year scores of several important future behaviors for Amazon have dropped.

Future Behaviors 2014 2013 Difference

Brand Commitment 82 86 -4

Purchase Next Time 87 89 -2

Recommend Company 84 88 -4

Retailer Satisfaction 86 89 -3

FIGURE 9

FUTURE BEHAVIORS:AMAZON



2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Point Change Since 2013

Point Change Since Beginning

Average Satisfaction Scores Across Websites Measured 74 75 74 74 79 78 79 78 79 77 -2 3

Apparel/Accessories

L.L.Bean 80 80 80 78 80 83 81 85 84 82 -2 2

The Children's Place nm nm nm nm nm nm nm nm nm 79 nm nm

Oriental Trading Company nm nm nm nm nm nm nm 80 80 78 -2 -2

Victoria's Secret nm nm nm 76 80 79 81 80 82 78 -4 2

Coach nm nm nm nm nm nm nm 80 nm 78 nm -2

Abercrombie & Fitch nm nm nm nm nm nm nm 75 78 77 -1 2

Ann Taylor nm nm nm nm nm nm nm 78 76 77 1 -1

Chico's nm nm nm nm nm nm nm 80 79 77 -2 -3

dressbarn nm nm nm nm nm nm nm nm nm 77 nm nm

Fanatics nm nm nm nm nm nm nm 78 78 77 -1 -1

Foot Locker nm nm nm nm nm nm nm 76 78 77 -1 1

Neiman Marcus nm nm nm nm nm nm nm 77 78 77 -1 0

Nordstrom nm 74 74 74 79 78 77 79 79 77 -2 3

Ralph Lauren nm nm nm nm nm nm nm 77 79 77 -2 0

Eddie Bauer nm nm nm nm nm nm nm 77 nm 76 nm -1

Express nm nm nm nm nm nm nm nm 79 76 -3 -3

lululemon athletica nm nm nm nm nm nm nm nm nm 76 nm nm

American Eagle Outfitters nm nm nm nm nm nm nm 76 78 75 -3 -1

Blair nm nm nm nm nm nm nm 80 nm 75 nm -5

Gap 73 74 nm 69 76 78 73 77 77 75 -2 2

J.Crew nm nm nm nm nm nm nm 77 74 75 1 -2

Saks Fifth Avenue nm nm nm nm nm nm nm 79 nm 75 nm -4

Shoebuy.com nm nm nm nm nm nm nm 75 75 75 0 0

Urban Outfitters nm nm nm nm nm nm nm 77 74 75 1 -2

Gilt nm nm nm nm nm nm nm 72 70 74 4 2

NET-A-PORTER nm nm nm nm nm nm nm 78 nm 74 nm -4

zulily nm nm nm nm nm nm nm nm 73 74 1 1

Fingerhut nm nm nm nm nm nm nm 72 75 73 -2 1

Rue La La nm nm nm nm nm nm nm 73 nm 73 nm 0


FIGURE 10: CUSTOMER SATISFACTION SCORES FOR WEB

Here are the customer satisfaction scores for the web channel (Figure 10).






Automotive Parts/Accessories

Advance Auto Parts nm nm nm nm nm nm nm nm 78 77 -1 -1

U.S. Auto Parts nm nm nm nm nm nm 78 75 nm 77 nm -1

AutoZone nm nm nm nm nm nm nm nm nm 76 nm nm

Books/Music/Videos

Netflix 84 86 86 84 86 86 79 80 80 82 2 -2

Scholastic nm nm nm nm nm nm nm 82 81 79 -2 -3

Barnes & Noble 77 77 78 78 nm nm 81 79 83 78 -5 1

Google Play nm nm nm nm nm nm nm nm nm 78 nm nm

Hulu nm nm nm nm nm nm nm nm 75 71 -4 -4

Computers/Electronics

Apple 76 79 79 78 82 82 83 80 82 80 -2 4

Newegg 79 78 77 78 81 82 82 81 81 80 -1 1

Sony Store Online 69 73 70 70 77 76 74 79 77 79 2 10

Dell 74 77 74 74 79 76 80 77 79 78 -1 4

HP 74 78 75 76 78 78 80 80 80 78 -2 4

Microsoft nm nm nm nm nm nm nm 78 79 78 -1 0

TigerDirect.com 77 76 77 77 80 73 79 76 nm 78 nm 1

Best Buy 72 73 74 73 77 77 78 77 78 77 -1 5

Adobe nm nm nm nm nm nm nm nm nm 74 nm nm

Flowers/Gifts

1-800-FLOWERS.COM 75 74 71 72 75 77 nm 80 76 77 1 2

FTD 69 nm nm nm nm nm nm 74 76 75 -1 6

Food/Drug

Edible Arrangements nm nm nm nm nm nm nm 79 79 79 0 0

Keurig Green Mountain nm nm nm nm nm nm nm 82 84 78 -6 -4

Walgreens nm nm nm nm nm nm nm 80 79 77 -2 -3

CVS nm nm nm nm nm nm nm 76 75 76 1 0

Hardware/Home Improvement

Home Depot nm nm nm 69 nm 75 78 78 78 79 1 10

Lowe's nm nm nm nm nm nm nm 75 81 78 -3 3

Grainger nm nm nm nm nm nm nm 77 75 75 0 -2


FIGURE 10: CUSTOMER SATISFACTION SCORES FOR WEB (Continued from page 18)







Health/Beauty

Avon 75 76 79 77 81 83 83 81 83 82 -1 7

1-800 CONTACTS 75 76 79 77 81 83 83 82 81 79 -2 4

Estée Lauder nm nm nm nm nm nm nm 83 82 79 -3 -4

Vitacost.com nm nm nm nm nm nm nm 84 86 78 -8 -6

Amway 76 79 nm nm nm nm nm 78 79 77 -2 -1

Weight Watchers nm nm nm nm nm nm nm 79 78 75 -3 -4

Housewares/Home Furnishings

Williams-Sonoma nm 77 75 74 79 80 80 79 81 78 -3 1

Crate and Barrel nm nm nm nm nm nm nm 73 80 77 -3 4

Restoration Hardware nm nm nm nm nm nm nm 73 nm 77 nm 4

One Kings Lane nm nm nm nm nm nm nm nm nm 76 nm nm

nomorerack nm nm nm nm nm nm nm nm nm 75 nm nm

Wayfair.com nm nm nm nm nm nm nm 75 74 72 -2 -3

Jewelry

Etsy nm nm nm nm nm nm nm nm 80 77 -3 -3

Blue Nile nm nm nm nm nm nm nm 76 76 76 0 0

Mass Merchant

Amazon 82 84 82 84 87 86 88 88 88 83 -5 1

QVC 80 80 80 79 83 84 83 84 83 83 0 3

Kohl's nm nm nm nm nm nm 79 80 80 80 0 1

HSN 75 75 76 69 76 79 76 81 79 79 0 4

Costco 69 69 72 72 79 79 79 78 81 78 -3 9

Macy's nm 71 71 70 79 75 78 77 78 78 0 7

Walmart 73 73 74 78 79 80 79 78 80 78 -2 5

JCPenney 71 76 75 76 81 78 83 78 79 77 -2 6

ShopHQ nm nm nm nm nm nm nm nm nm 77 nm nm

Overstock.com 71 71 70 69 76 76 72 75 73 75 2 4

Sears 68 73 70 70 75 74 75 75 74 75 1 7

Hayneedle nm nm nm nm nm nm nm 76 76 74 -2 -2

Rakuten.com 72 72 70 70 76 77 74 75 74 74 0 2

Target 70 74 72 75 78 77 76 79 78 73 -5 3








Office Supplies

Office Depot 72 73 71 72 77 76 75 78 79 77 -2 5

Staples 71 73 73 77 77 78 78 77 78 77 -1 6

Specialty/Non-Apparel

Vistaprint nm nm nm nm nm 80 83 83 81 81 0 1

Shutterfly nm nm nm nm nm nm nm 80 82 79 -3 -1

Groupon Goods nm nm nm nm nm nm nm nm 77 78 1 1

SHOP.COM nm nm nm nm nm nm nm 74 73 74 1 0

Sporting Goods

Bass Pro Shops nm nm nm nm nm nm nm 76 83 80 -3 4

Cabela's nm nm nm nm 82 77 79 81 80 79 -1 -3

Nike nm nm nm nm nm nm nm 76 77 77 0 1

REI nm nm nm nm nm nm nm 76 79 77 -2 1

Dick's Sporting Goods nm nm nm nm nm nm nm nm 76 76 0 0

Toys/Hobbies

Disney Store nm nm nm nm nm nm nm 78 82 79 -3 1

Musician's Friend nm nm nm nm 79 80 nm 80 81 78 -3 -1

American Girl nm nm nm nm nm nm nm nm nm 77 nm nm

GameStop nm nm nm nm nm nm nm 77 79 77 -2 0

Toys “R” Us 69 71 72 nm 75 77 75 76 77 77 0 8

nm = not measured



FUTURE BEHAVIORS: WHY WEB CUSTOMER SATISFACTION MATTERS

Owners of e-commerce websites must pay attention to customer satisfaction because of the huge impact it has on the bottom

line. Our analysis found that a satisfied web shopper is far more likely to purchase (online and in stores), remain loyal and

engage in positive word of mouth recommendations than a dissatisfied shopper. When compared to less-satisfied customers,

highly satisfied customers are more likely to do the following (Figure 11).

FIGURE 11: FUTURE BEHAVIOR LIKELIHOOD SCORES FOR THE WEB CHANNEL

FUTURE BEHAVIORS:WEB


… purchase from that retailer on the web 67%



… recommend the store, website, mobile site or app, or company to a friend, family member or colleague

64%

… be more committed to the brand 63%

… return to the website 56%

… be more satisfied with the retailer overall, transcending the experience with the website alone (this information translates to a considerable website contribution to brand affinity)

56%

MOBILE SATISFACTION

Amazon remains the leader in mobile customer satisfaction, but just barely. Last year, Amazon’s score was 5 points ahead of

its nearest competitor. This year Amazon, with a score of 83, leads Fanatics and L.L.Bean by just one point. The top six mobile

sites and applications (Amazon, Fanatics, L.L.Bean, Newegg, QVC and Sony Store Online) are separated by just 2 points.

This year we are starting to see the benefit to some of these retailers from their repeat purchasers. As mobile has become

a habit for holiday shoppers, so has the inclination to actually purchase via mobile, especially after successfully making

purchases via mobile and finding the security and privacy parameters meeting customers’ needs.

During the 2014 holiday shopping season, mobile shoppers were far more likely to use their phones to research products this

year (74%) than last year (55%), and more likely to make a purchase through their phone this year (44%) than last year (25%).

Figure 12 shows the customer satisfaction scores for the mobile sites and applications.



Company Name 2011 2012 2013 2014

Average Satisfaction Scores Across Mobile Websites and Apps Measured 76 79 79 79

Amazon 84 85 87 83

Fanatics nm nm nm 82

L.L.Bean nm nm nm 82

Newegg nm nm nm 81

QVC nm 83 82 81

Sony Store Online nm nm nm 81

Apple 85 83 82 80

Barnes & Noble 75 79 81 80

Dell 78 nm 81 80

Google Play nm nm nm 80

Nordstrom nm nm 81 80

Staples 76 77 76 80

Victoria’s Secret 75 80 81 80

Costco nm 78 80 79

Gap nm nm 78 79

HSN nm nm nm 79

Kohl's nm 78 80 79

Office Depot nm nm 79 79

Walmart 72 75 80 79

Best Buy 76 77 78 78

JCPenney nm 77 76 78

Target 72 77 79 78

Toys "R" Us 74 nm 78 78

Dick's Sporting Goods nm nm 77 77

Etsy nm nm nm 77

Home Depot 75 nm 80 77

Lowe's nm nm 79 77

Walgreens nm nm 78 77

Macy's nm 77 77 76

Overstock.com nm nm nm 76

Sears 71 74 75 76

CVS nm nm 79 75

nm = not measured

FIGURE 12: CUSTOMER SATISFACTION SCORES FOR MOBILE



FUTURE BEHAVIORS: WHY MOBILE CUSTOMER SATISFACTION MATTERS

The impact of mobile customer satisfaction on a retailer’s business is clear. Our analysis found that a satisfied mobile shopper

is far more likely to purchase (online and offline), remain loyal and engage in positive word of mouth recommendations than

a dissatisfied shopper. When compared with less-satisfied customers, highly satisfied customers demonstrate the following

(Figure 13).

FIGURE 13: FUTURE BEHAVIOR LIKELIHOOD SCORES FOR THE MOBILE CHANNEL

FUTURE BEHAVIORS:MOBILE


… purchase from that retailer on their mobile device 71%



… recommend the store, website, mobile site or app, or company to a friend, family member or colleague

58%

SECTION 3: TOP GAINERSAmidst the important changes in the retail industry landscape occurring this holiday season, a number of retailers should be

applauded for continuing to invest in improving their customer experiences over the years. These retailers (Figure 14) have

demonstrated a culture of customer commitment and we would expect to see them among the leaders for years to come.

Company Improvement Since

Sony Store Online +10 2005

Home Depot +10 2008

Costco +9 2005

Toys “R” Us +8 2005

Avon +7 2005

Macy’s +7 2006

Sears +7 2005

FIGURE 14: NOTABLE IMPROVEMENTS IN CUSTOMER SATISFACTION



Driver Stores Websites Mobile Sites and Apps

Merchandise: the appeal, variety and availability of products available in stores or on websites, mobile sites or apps

72%(top priority for stores)

53%(top priority for websites)

44%(top priority for mobile sites and apps)

Service: how well the company keeps its promises about the delivery of services, whether the employees are friendly and whether the services provided by the employees are consistently performed

16% nm nm

Store Environment: the layout of the store, how well the products are organized and how appealing the store environment is

16% nm nm

Price: the fairness and competitiveness of the product prices

16% 7% 38%

Functionality: the usefulness, convenience and variety of online features and tools available

nm 26% 41%

Content: the accuracy, quality and freshness of information and content on the website, mobile site or app

nm 19% 22%

nm = not measured

FIGURE 15: SATISFACTION DRIVERS BY CHANNEL AND THE TOP PRIORITY AREAS FOR IMPROVEMENT

SECTION 4: WHAT DRIVES SATISFACTION?Our calculation of customer satisfaction is a complex one, one that has been time-tested for over a decade in measuring

customer experiences for the world’s leading brands and organizations. It starts with measuring the key factors, or elements,

that determine a customer’s satisfaction in a particular channel. These elements ultimately are what drive a customer’s

experience and satisfaction with a retailer.

In this study, by collecting data directly from shoppers, we’ve learned how customers feel about how well retailers have

performed against the key satisfaction elements, which in turn drive the overall customer satisfaction score. In this model, we

determine the causal relationships between the elements and overall customer satisfaction and can predictably quantify how

much improving a particular element will increase customer satisfaction. Improvements in customer satisfaction in turn drive

the desired future behaviors. Figure 15 below highlights the top priority areas for improvement by channel for the retailers

measured in this study.



SECTION 5: WHY DO YOU NEED TO FOCUS ON YOUR RETAIL STORE EMPLOYEES?For years, we’ve heard “a happy employee makes a happy customer,” with the implication for retailers being that happy

customers purchase more than unhappy customers. If that is the case, does this mean retail store employees can directly

impact top-line revenue?

To quantify the elusive relationship between employee engagement and customer purchase intent, we paired the results of

the retail chain store portion of this AXI customer analysis with employee engagement data from those very same retail chain

stores, and analyzed the interconnectedness of the two.

We were able to model that the relationship between employee engagement and customer satisfaction exists, is positive and

is significant.

HOW CAN WE HELP YOU?

At Answers, we know that a good customer experience is a leading indicator of business success. That’s why the ForeSee

methodology, our proven approach to customer experience measurement, is rooted in the science of customer satisfaction.

It is based on an academically proven way to measure customer satisfaction that has shown time and time again that

consumers spend more and continue to do business with companies that provide the best customer experiences.

The ForeSee methodology goes beyond traditional customer feedback analysis and simple customer satisfaction metrics to

provide a cause-and-effect framework showing the power that individual elements of your customer experience, such as

associate friendliness, product pricing, website navigation and agent response time, have on overall customer satisfaction—

and how increasing satisfaction with the highest-priority elements will positively enhance your business’s bottom line.

Measuring customer satisfaction using ForeSee, an Answers solution, helps you:

» Accurately assess your customer experience

» Prioritize customer experience improvements

» Support your investment decisions

More than 600 satisfied clients from across industries and sectors use our multichannel customer experience analytics to

gain actionable customer experience insights, drive meaningful and impactful customer experience improvements, and

predict future business success.



ABOUT THE AUTHOR, RESEARCH TEAM, ANSWERS CORPORATION, AND FORESEEAUTHOR

Jim Yang, Senior Vice President of Products, Marketing and Services for Answers, oversees product management, strategy,

marketing and services for Answers’ suite of SaaS-based customer experience solutions. He has over 15 years of software

product leadership and general management experience with leading enterprise and consumer brands. Most recently, Jim served

as the vice president of Products & Community for Answers.com, where he oversaw products, community development, content,

usability design and business development. Previously, Jim led product management and usability for Shopping.com (acquired by

eBay) and Linden Lab (creator of Second Life). He also held senior product leadership roles at Yahoo! and Netscape. Jim earned

his bachelor’s and master’s degrees with honors in electrical engineering and computer sciences from the University of California

at Berkeley, and his MBA from Stanford University.

RESEARCH

Research Analyst Julie Anderson has more than 15 years of consulting and research experience in public and private

organizations, with a focus on large-scale data analytics. Through her work as a customer experience research analyst at

Answers, she has extensive experience with customer satisfaction methodologies and in providing voice of customer analytics

with a special focus on digital analytics.

ANSWERS CORPORATION

Answers’ mission is to empower consumers, brands and organizations by connecting them with the information they need to

make better-informed decisions. The Answers Platform leverages the sizable reach of the top-10 Quantcast site Answers.com,

along with its leading cloud-based solutions from ForeSee, Webcollage and ResellerRatings, to enable businesses and

organizations to engage with customers at every interaction point, drive investment decisions from customer insights and

deliver content that powers the customer experience. This platform helps businesses measure and improve the multichannel

customer experience, resulting in better business results. Answers is headquartered in St. Louis with offices in Ann Arbor, New

York City, Silicon Valley, Cleveland, London, Vancouver and Tel Aviv. For Answers, visit answers.com.

FORESEE, AN ANSWERS SOLUTION

ForeSee continuously measures satisfaction with the customer experience across multiple touch points and delivers critical

insights on where to prioritize improvements for maximum impact. ForeSee delivers superior technology and a proven

methodology to connect the customer experience to the bottom line. This enables executives and managers to drive future

success by confidently optimizing the efforts that will achieve business and brand objectives. Visit us at

www.answers.com/foresee for customer experience solutions.

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