Online Customers Getting More Respect From Retailers

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September 19, 2003 (12:05 PM EDT)

Online Customers Getting More Respect From Retailers

The largest retailers are showing online shoppers more respect, with the highest gains in responsiveness to inquiries, a research firm said Friday. The companies, however, scored lowest in respect for customer data.

The overall summer Consumer Respect Index compiled by the Customer Respect Group rose to 7.2 from the 6.8 winter index. The biggest improvement among retailers and specialty retailers was in the speed and thoroughness of responses to inquiries. That index jumped to 7.7 from 5.5 for specialty retailers and to 6.7 from 5.7 for general retailers.

Of the 53 companies ranked in the study, a quarter did not respond at all to online inquiries, which was better than in the winter study that found more than a third ignoring shoppers' questions, the international research and consulting firm said.

The four companies that scored highest in the study with an overall index of 9.0 were Lowe's Companies Inc., The Gap Inc., Target Corp. and Circuit City Stories Inc. Hughes Supply Inc. scored the lowest with a 2.9.

With the all-important holiday season approaching, it's important for retailers to improve the online experience for shoppers and to clearly explain privacy policies, CRG analyst Thorsten Ganz said. The majority of sales for many retailers' occur between Thanksgiving and Christmas.

Market research has shown that close to a quarter of shoppers who have a bad online experience don't return to the site, even if they've been loyal to the brand offline. Even more damaging, about 6 out of 10 shoppers won't buy from a site in which they're not sure how the retailer handles their personal data.

"That translates into lost dollars, obviously, from the customer," Ganz said. "So by paying more attention to those issues, we believe companies can really improve not only the overall experience but the bottom line by keeping customers on their sites and getting them to complete a transaction."

In assigning overall indexes, CRG evaluates company web sites on 25 attributes that are grouped into six categories, privacy, principles, attitude, transparency, simplicity and responsiveness.

In more general terms, the sites are judged on whether they show respect for customer privacy, value and respect customer data, are customer focused, have open and honest privacy policies, are easy to navigate and provide quick and thorough responses to inquiries.

Overall, the companies scored highest in ease of navigation with an index of 8.0, and worst in their respect of customer data, which got a rating of 6.1.

Of the companies that respond to online inquiries, 77 percent did so within 48 hours, 10 percent within 72 hours and 13 percent after 72 hours. Only 31 percent of those companies gave an immediate automatic response telling the shopper by email when they should expect a response. Of those companies, 81 percent followed through on the promise.

The study also found that 85 percent of the companies had privacy policies on their sites explaining how customers' personal data was being used, and 68 percent used cookies, which are often used to track a customers' travels through a site. Fifty-seven percent of the companies provided a keyword search function,

In compiling the index, CRG looked at retailers and specialty retailers listed in the Fortune 500. The top 10 companies, with their overall Customer Respect Index, were: Lowes, 9.0; The Gap, 9.0; Target, 9.0; Circuit City, 9.0; Foot Locker Inc., 8.9; CVS Corp., 8.9; Walgreen Co., 8.9; Federated Department Stores Inc., 8.8; J.C. Penney Co. Inc., 8.7; and Albertson's Inc., 8.7.