Tuesday, January 16, 2001

Internet Pure Play Sites Outperform Brick-and-Mortar Sites in Customer Satisfaction

Nielsen/NetRatings, a Internet audience measurement service, and Harris Interactive, today reported that brick-and-mortar e-tailers, while making the largest growth in shopping visits during Holiday Season 2000, ranked lower in customer satisfaction than their Internet pure play counterparts.

NetRatings, Inc. and Harris Interactive today also announced a strategic alliance to provide the industry with timely and detailed eCommerce information via a new service, called eCommercePulse, which covers online consumer spending, behavior and attitudes.

New findings from eCommercePulse, collected from an online survey of 30,000 Web users in December, found that among the most visited e-tailing, travel and auction sites, customer satisfaction ranked highest among Internet pure plays. Seven out of the top ten sites ranked by customer satisfaction were Web-only based companies, with Amazon.com leading the way with a high of 8.5 on a scale of one to ten. The average customer satisfaction rate across 264 sites analyzed was 7.77. Traditional e-tailers making the top ten customer service rankings were Barnes and Noble, Hallmark and JCPenney.

Traditional mass merchandisers rounded out rankings No. 16-20, with Walmart.com, BestBuy.com, Target.com, Sears.com and BlueLight.com scoring average customer satisfaction ratings ranging from 7.60 to 7.35.

"While brick-and-mortar companies have been able to achieve huge growth by bringing their offline customers online, they are also introducing many customers to online purchasing for the first time," said Sean Kaldor, vice president of eCommerce at NetRatings. "By comparison, Internet pure plays have a more established online customer base, one that is more comfortable with the online buying process."

Consumer Spending in December
Online sales totaled $7.2 billion in December 2000, with thirteen percent of the U.S. population, or 36.1 million people, making an online purchase. For each dollar spent online, an additional $1.97 was spent offline as a result of those online shopping trips, marking a critical advantage for brick and mortar companies.

"For every dollar spent online, nearly two dollars were spent offline, underscoring the enormous benefit of the Internet for brick and mortar retailers," said Lori Iventosch-James, director of eCommerce research at Harris Interactive. "One must not be too quick to discount the full benefit of eCommerce initiatives, which ring up sales beyond the online registers."

Virtually All Person-to-Person Payments Still Use Traditional Means
In a report released today, Meridien Research, a leading financial technology analyst firm found that over 99% of all payments currently made between consumers were transacted using traditional means: cash, checks, and credit cards. With the advent of new technologies, however, the firm predicts increased growth in the market for alternative person-to-person payment mechanisms over the next decade.

"Traditional payment alternatives will gradually be displaced by easy to use online payment services," said David Potterton, Research Director at Meridien Research. "We believe that the market for these alternative payment solutions will continue to grow in the next decade as the underlying infrastructure becomes a reality."