Survey: Online retailers better at customer communication

But they still collect and use consumer data without permission

Online retailers are doing a better job communicating with their customers, but they still gather and reuse personal information without permission, according to the Third Quarter 2006 Online Customer Respect Study of Retailers. The study was conducted by The Customer Respect Group in Ipswich, Mass.

The study, which analyzed 51 major retail companies, found that the industry as a whole scored a 6.2 on the Customer Respect Index's 10-point scale. Five of the 51 companies did well enough to earn an "excellent" designation: Sears, Roebuck and Co., Payless ShoeSource, L.L. Bean Inc., CVS.com and Wal-Mart Stores Inc. Saks.com was the best site in terms of communication, Sears.com was deemed the most trusted Web site, and Walgreens.com was rated best overall for site usability.

According to The Customer Respect Group, online retailers are much more willing to deal with individual questions and e-mails from consumers than they were last year. In the area of communication, retailers scored an average of 6.6 -- compared with an average for all industries of 4.9. Nearly half of the companies studied performed exceptionally well in communications, which for most industries is the area they score lowest. The best were Saks Fifth Avenue, Newegg Inc., Footlocker.com Inc., L.L. Bean and Victoria's Secret.

The Customer Respect Group found the following:

  • Ninety-two percent of e-mails sent by researchers to retailers got a response. All industries combined averaged an 81% response rate.
  • Of those responses, 69% were received within one day. The response rate for all industries combined was 52%.
  • Ninety-one percent of the responses were deemed helpful and relevant. For all industries combined, just 64% were seen as helpful.

Despite those positive findings, online retailers were also found to still be collecting and reusing data from customers without getting their permission first. Online retailers sought more personal data from consumers who submitted questions than did companies in other industries, according to the survey. In fact, one-fifth of online retailers required consumers to fill in 10 or more fields when posing a question, according to the report.

Other findings included the following:

  • Twenty-seven percent of Web sites required full registration or log-on before providing full price quotes online.
  • Forty-three percent of the sites shared personal data with other companies without the express permission of the customer.
  • Seventy-six percent of sites routinely reused personal data for ongoing marketing campaigns.
  • Sears.com, Payless.com, RadioShack.com and Lowes.com are the sites consumers felt were the most trustworthy.

Finally, while most online retail sites generally scored well on usability, the industry is not doing enough to support a broad spectrum of users, the report said. The industry scored a 5.2 on the 10-point scale when it came to support for older machines, dial-up connections, and users with visual and mobility difficulties and other accessibility issues. Just 6% of online retail sites had home pages of less than 150KB, meaning 94% were almost inaccessible for dial-up users. And just 14% consistently used high-contrast colors to help people who were visually impaired or color-blind, according to the survey. Good performers in that category were BananaRepublic.com, Staples.com and Walgreens.com.

"Retailers see online customers as strong business prospects -- more than any other industry," said Terry Golesworthy, president of The Customer Respect Group. "However, there is growing concern among users about the integrity of their personal information.

"While price and value still rank highest in choosing vendors, trust is becoming a major factor, especially because customer loyalty is limited in the retail industry," he said. "This might start to affect click-through and conversion rates."

Copyright © 2006 IDG Communications, Inc.

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