ANN ARBOR — According to the American Customer Satisfaction Index’s  annual E-Commerce Report, produced in partnership with the Ann Arbor-based customer experience analytics firm ForeSee, customer satisfaction with e-commerce websites continues to rise, gaining 1.2 percent to 81.1 on the ACSI’s 100-point scale.

The improvement in the e-commerce sector, which comprises the online retail, brokerage, and travel categories, is driven in part by the strong performance of the aggregate of smaller e-retailers and e-brokerages.

“Just as we have seen in the public sector, consumers enjoy the convenience and power of e-commerce and online transactions,” said Claes Fornell, ACSI founder and professor at the University of Michigan Ross School of Business. “E-commerce is maturing, and even the smaller companies are improving, keeping up with or sometimes surpassing larger, more established companies. The e-commerce landscape changes faster than more traditional industries, and the rules can be rewritten by new players or new technologies, like mobile. Disruption will always be a part of e-commerce, but innovation will likely keep the sector near the top in customer satisfaction.”

Online Retail

Online retail increased 1.2 percent to an ACSI score of 82, outperforming the brick-and-mortar retail trade sector (76.6) by a wide margin. Amazon continued to the lead the industry (and topped all measured e-commerce companies in this month’s Index) despite a 1 percent drop to 85. The “all others” category, which is an aggregate of e-retailers and other companies not individually measured, jumped 3 percent to 82. The “all others” category contains many e-retail Web sites that also have a brick-and-mortar presence.

Among measured companies, Newegg rose 1 point to 85, eBay fell 2 points to 81, rose 2 points to 83, and Netflix fell 1 point to 74.

“Brick-and-mortar retailers are not conceding the Internet to online natives such as Amazon,” said Larry Freed, president and CEO of ForeSee. “They are investing heavily resources in providing a better experience for their customers, providing more evidence that competition is good for the consumer.”

Added Freed: “Netflix’s recovery comes amid increased competition and tough negotiations with content providers. Netflix knows that access to content is key, and creating exclusive content and a franchise that will help it secure a loyal following is a unique approach. But it remains to be seen if this tactic can return the company to the top of the online retail category.”

Online Brokerage

Customer satisfaction with online brokerage increased 2.6 percent to 86, led by a surge in the “all others” category (up 4 percent to 78), which includes a range of online brokerages from large financial institutions like Wells Fargo and Merrill Lynch to smaller brokerages like Scottrade and Sharebuilder. Fidelity (down 2 percent to 78) shares the top spot in the category. Charles Schwab (down 3 percent to 77) and TD Ameritrade (down 1 percent to 77) are close behind, while E-Trade suffered the largest drop of any e-commerce company (down 8 percent to 73) a year after setting a personal best.

“All the household names in online brokerage are down, yet the category is up on the strength of the ‘all others’ category, which is made up of both traditional financial institutions and smaller e-brokerages,” added Freed. “It just goes to show you that industry leaders cannot and should not rest on their laurels just because they are well established. Traditional firms have the resources to invest in improving the customer experience and probably should. At the same time, newer and smaller players are demonstrating that they are nimble enough to keep pace with constantly changing customer expectations.”

Online Travel

The online travel industry continues to be anyone’s game, as only two points separate all measured companies. Customer satisfaction with online travel overall fell 2.6 percent to 76, the largest decline of all measured categories. Expedia (down 1 percent), Orbitz (no change), and the “all others” category (down 4 percent) led e-travel with a score of 76. Travelocity fell 5 percent to 75 after leading the Index last year. Although the gap between Priceline and industry leaders is the narrowest since 2002, when the travel category was first included in ACSI, the company remains at the bottom of the group (down 3 percent to 74).

“Mobile is going to reshape e-commerce, but it has the most potential to improve the experience for the traveling consumer. That may be a tall order, though. Hotels and airlines are attempting to assert more control over their relationships with their customers, fragmenting the online experience and doing more harm than good in the short term,” said Freed.

A free report with historical scores for all of the e-commerce companies measured by the ACSI is available at

The American Customer Satisfaction Index (ACSI) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for measuring satisfaction with more than 230 companies in 47 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.

ACSI results are released on a monthly basis, with all measures reported using a scale of 0 to 100. ACSI data have proven to be strongly related to a number of essential indicators of micro- and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. And, at the macro-level, customer satisfaction has been shown to be predictive of both consumer spending and gross domestic product growth.

The Index was founded at the University of Michigan’s Ross School of Business and is produced by ACSI LLC and supported in part by ForeSee, corporate sponsor for the e-commerce and e-business measurements. The ACSI can be found on the Web at

Among all companies, national customer satisfaction gained 0.5 percent to 76.3 in the fourth quarter. The rise came from strong public sector gains combined with moderate customer satisfaction improvement for five of eight retail and e-commerce industries.

Supermarkets showed an ACSI benchmark of 77 in 2012, up 1.3 percent from 201. Publix led the category, up 2 percent to 86. Kroger was unchanged at 79. Further down, Supervalu and Wal-Mart are in the mid-to-low 70s, which suggests that even in a strapped economy, low prices alone are not enough to make customers happy. Supervalu gained 3 percent to 76 and giant Wal-Mart is in last place despite a 4 percent gain to 72.

Specialty retailers fell 1.3 percent to 78, with warehouse clubs and office suppliers dominating the top and clothing retailers at the bottom. Office Depot vaulted into the lead with a 6 percent gain to 84, beating Staples (79) and OfficeMax (78). Bookseller Barnes & Noble shows the second-largest upswing, rising 4 percent to 82. Two warehouse clubs bookend Barnes & Noble: Costco at 83 (unchanged) and Sam’s Club at 80 (down 1 percent).  Lowe’s (79), Best Buy (78) and Home Depot (77) are at, or close to, the industry average. Cost increases for raw materials passed on to consumers have not helped clothing retailers TJX (down 3 percent) and Gap (down 1 percent), both at the bottom of the industry at 76.

In contrast to specialty stores, department and discount stores improve customer satisfaction by 1.3 percent to 77. Quality and customer service keep Nordstrom on top with a firm ACSI benchmark of 84. What makes Nordstrom strong is a weakness for Wal-Mart. Lower quality and less customer service put it in last place at 71. Following behind Nordstrom, Target, Kohl’s and J.C. Penney are tied at 81. The next tier down includes Dillard’s at 79, followed by Macy’s, Dollar General and the aggregate of smaller department and discount store chains (all 78). Sears continues to struggle long after its acquisition by Kmart. Down 1 percent to 75, Sears trails the entire field except for Wal-Mart at 71.

Customer satisfaction with health and personal care stores reversed a two-year slide with an increase of 1.3 percent for 2012. With an ACSI score of 77, drug stores are similar to supermarkets, department/discount stores, and specialty retail. In 2011, smaller drug stores held a 7- to 9-point advantage over the larger chains. In 2012, a 4 percent drop to 79 for small stores narrows their lead to 2 points. Rite Aid earned the top position among larger chains with a 3 percent improvement to 77. Walgreens is next at 76 (up 1 percent), while CVS Caremark gained 3 percent to 75.

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