Foresee mobile-research-u.s.-holiday-2011

MOBILE SATISFACTION: APPLE AND AMAZON EXCEL

FORESEE MOBILE RESEARCH(U.S. HOLIDAY 2011)

January 12, 2012

Commentary and Analysis By: Larry Freed, President and CEO, ForeSee Eric Feinberg, Director, Mobile Industry, ForeSee

Research By: Rhonda Berg, Research Manager, ForeSee

© 2012 ForeSee

ONLINE SHOPPING

INCREASINGLY DOMINATED BY MOBILE

38%of all web shoppers have used a mobile phone to access a retail website,

mobile site, or mobile app14%of web shoppers

visited the mobile site or app of one of the

Top 40 e-retailers

34%used a

mobile phone to research

products

19%of all web shoppers used their phone to compare prices while shopping in person at a store

10%used retailer-developed

mobile apps

15%used their phone

to make purchases

Data collected Nov-Dec 2011.

FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 2

INTRODUCTION

The world of mobile is clearly growing and developing at lightning speed. In a January report from

Forrester containing key predictions for 2012, analyst Kerry Bodine pronounces, “mobile and tablet

devices will be key touch points for differentiation.” Comscore said in November 2011 that 91.4

million people in the U.S. owned smartphones. IBM reported that 18.3% of all traffic to online retail

sites came from a mobile device on Christmas Day, more than doubling last year’s figure of 8.4%.

If retailers are going to compete and differentiate with mobile services in 2012, it is critical that they are able

to measure their success in creating a satisfying customer experience. Whether on a website, in a store, or on

a mobile-optimized website or mobile app, customer satisfaction is the result of meeting customer needs

and expectations. The principles are the same regardless of the customer touch point. Measuring whether

an experience meets customers’ needs and expectations cannot be done by tracking mobile sales, app

downloads, or mobile site traffic. It can only be done by asking the customers themselves.

That’s what we did this holiday season.

ForeSee has been tracking customer satisfaction with mobile sites since 2010, but has never before publicly

reported company-level satisfaction scores for mobile apps and websites. This report is the first effort of

its kind. The following report is based on data collected from visitors to the top 40 retail websites (by sales

volume, according to Internet Retailer’s Top 500 Guide). We were able to collect sufficient data to calculate

statistically reliable customer satisfaction scores for 16 of the top retailers’ mobile sites, and the following

report shares those scores with our analysis.

Our findings show which companies are on the forefront of the emerging and powerful mobile trend. Mobile

commerce is clearly here to stay, and the companies that can make an early and powerful impression could

have a huge cross-channel advantage.


RESEARCH SUMMARY

The following report discusses each of these key findings in more detail:

> Of the largest e-retailers’ sites, the Apple store and Amazon provide the best mobile

experience by a large margin. On the study’s 100-point scale, Apple comes in first place at 85, with

Amazon close behind at 84, representing a top tier, with a statistically significant gap between them

and the rest of the pack. Dell comes in a distant third at 78, for example.

> Traditional websites satisfy shoppers more than mobile sites and apps. In general, retailers

receive higher satisfaction scores for their traditional websites than for their mobile versions. The

average satisfaction score for the same companies’ websites was 79, compared to 76 for the mobile

experiences from the same companies.

> Shoppers are using mobile phones to access websites and apps more than ever before.

Thirty-eight percent of online shoppers (from our related study of the top 40 retail websites) have

used their phone to access a retailer’s website, up significantly from 33% last year; and an additional

25% indicated they may access retail websites or mobile apps by phone in the future.

> Consumers use their phones for a variety of shopping tasks. Online shoppers were most likely

to use their mobile phones to research products (34%), but 15% bought directly from their mobile

phones, up from 11% last year.

> Mobile commerce enables and encourages competition. One in five online shoppers used a

mobile phone to compare prices or products while shopping in a retail location.

> Shoppers use their phones to look at competitor websites. While in physical stores, more than

one-third of online shoppers (36%) used their phones to visit the store’s own website or app, but

nearly one-quarter (24%) also used their phones to access a competitor’s website or mobile site.


> Good experiences with mobile sites and apps have critical cross-channel impact. Mobile

shoppers who are highly satisfied with their mobile experience report being 54% more likely to

consider that company the next time they want to make a similar purchase and twice as likely to

buy from the retailer’s mobile channel again.

MOBILE SATISFACTION SCORES

Of the top 40 websites, we were able to collect enough data to produce statistically reliable satisfaction

scores for 16 retailers’ mobile experiences. Because some retailers focus more on mobile apps than mobile

sites and vice versa, we measured both types of mobile experiences, so that the scores reflect the retailers’

mobile efforts as a whole.

The average satisfaction score for these 16 mobile experiences is 76. Two retailers’ mobile presences

stand out far and above the rest: Apple (85) and Amazon (84).

It is important to note that these are some of

the largest and most successful e-retailers in

the country. The average satisfaction score for

these 16 mobile experiences is 76. However, in a

monthly benchmark that ForeSee maintains with

a much broader range of companies of all sizes

across industries, the average score for a mobile

experience is 67. Therefore, being at the bottom

of this list does not mean a subpar performance

since everyone on this list outperforms the

industry average of 67.


Satisfaction

Website Mobile Web

Store.Apple.com 85 83

Amazon.com 84 88

Dell.com 78 80

Netflix.com 77 79

eBay.com 77 80

BestBuy.com 76 78

Staples.com 76 78

Avon.com 75 83

BN.com 75 81

HomeDepot.com 75 78

VictoriasSecret.com 75 81

Toysrus.com 74 75

Blockbuster.com 73 75

Target.com 72 76

Walmart.com 72 79

Sears.com 71 75

On average, the measured retailers’ websites outperform their mobile sites in terms of customer satisfaction

by three points. However, a few companies had comparable performance on mobile and web: Apple (a

standout with a mobile score two points higher than its web score), Toys “R” Us, Best Buy, Staples, Netflix,

Dell, and Blockbuster.


APPLE AND AMAZON’S SUPERIOR PERFORMANCE

By Matthew Dull, Usability Team Lead at ForeSee

With mobile satisfaction scores of 85 and 84 respectively, Amazon and Apple are the clear leaders of the pack, far ahead of the distant third place scorer, Dell (78). In a field of top performers (every mobile score on this list of top e-retailers outperforms ForeSee’s mobile benchmark of 67, which includes a much broader range of industries and vastly different levels of maturity), why are Apple and Amazon so far ahead of their peers?

The simple answer is that Apple and Amazon are both companies that tend to place great value and emphasis on the customer experience across touch points, and they carry that excellent user experience into their mobile environment. The Apple store has only a mobile app, while Amazon has both a mobile app and a mobile website. Both companies have managed to trim down and layer the experience without eliminating too much and leaving customers frustrated and unable to find what they need.

Mobile devices may be small, but all the same tenets of a good experience apply when it comes to both shopping and purchasing. Apple and Amazon both provide mobile experiences that are heavily functional and transactional, while still enabling customers to easily do the same things they do on Apple and Amazon’s websites: browse and search for products, read reviews, look for related products and accessories, buy products, find stores, add to a wish list, and more.

All of this functionality is handled in a deft and user-friendly way: there are hundreds or thousands of products accessible from these mobile destinations, and there is a lot of information about each product, yet it never feels overwhelming to the user. The pages are well designed for the small screen, and the layout is clearly divided into sections with calls to action. Apple and Amazon know that not everybody will want or need to get down to the same level of detail, so both organizations appropriately layer the information.

In short, these organizations have earned their high customer satisfaction ratings by neatly balancing information and functionality in a small space, without venturing to the two extremes where many mobile sites or apps get trapped: total information overload or a version that is so streamlined and pared down that it’s useless. Add this balancing act to truly innovative functionality (such as the ability to search for products by taking a picture or scanning a code), and these organizations are clearly head and shoulders above the rest.

Mobile is still in its infancy in many ways, so it is not a surprise that satisfaction with mobile sites

lags satisfaction with traditional websites. However, a mobile site can either complement a

consumer’s overall brand experience or undermine it.

The largest gaps between web satisfaction and mobile satisfaction are for Avon, with a gap of eight points,

and Walmart, with a gap of seven points. A large gap indicates that customer needs are not being met nearly

as well in the mobile experience as they are online. Unless companies improve their mobile shopping

capabilities, this gap is likely to become a larger problem for companies as more of the population

becomes mobile savvy and expectations for the mobile experience rise. Customers expect the same

high-quality experience on a mobile site as they do on a website, and companies that do not deliver

could see long term brand affinity and loyalty suffer.

Since extensive academic studies have shown that satisfaction can influence what customers will

do in the future, we were also able to rate each of these 16 e-retailers in terms of their customers’

likelihood to make future purchases, both from a mobile phone and from other channels.

Unsurprisingly, satisfaction with the mobile experience corresponds with a higher likelihood to use the same

channel for future purchases. The following chart shows that Apple customers are the most likely to make

a future purchase from Apple on their mobile phone, followed by Amazon, which tracks with the highest

mobile satisfaction scores.

In addition, experiences happening in the mobile environment have a huge impact on other channels. Mobile

shoppers most likely to make a purchase from another channel (the traditional website, a store, or a call

center) are those who shopped on Amazon (87) and Apple (81), followed closely by Best Buy and Avon (both

79), Staples, Barnes and Noble, Victoria’s Secret, and Target (all 78). These scores highlight the companies

who have made the most progress in using their mobile experiences to engender loyalty across channels.

It is generally the case that mobile users represent a critical and lucrative audience segment, where

great gains can be found from engendering loyalty and recommendations.


WebsiteMobile

Satisfaction Score

Likelihood to Purchase from

the Mobile Channel in the Future

Likelihood to Purchase from

Another Channel in the Future

(Web, Store, etc.)

Store.Apple.com 85 80 81

Amazon.com 84 77 87

Dell.com 78 71 76

Netflix.com 77 73 76

eBay.com 77 80 N/A

BestBuy.com 76 63 79

Staples.com 76 66 78

Avon.com 75 67 79

BN.com 75 66 78

HomeDepot.com 75 64 77

VictoriasSecret.com 75 69 78

Toysrus.com 74 63 77

Blockbuster.com 73 65 73

Target.com 72 62 78

Walmart.com 72 62 74

Sears.com 71 61 76

Other findings:

> 38% of online shoppers say they have used a mobile phone to access a retailer’s website,

mobile site, or mobile app.

Have you ever used a mobile phone to access a retailer’s website, mobile site, or mobile app?

% of Respondents

Yes 38%

No, and I don’t plan to 36%

No, but I might in the future 25%

Not sure 1%


> A sizeable percentage of all online shoppers made purchases from their mobile phone (15%)

this holiday season. Even more are using their phone to research purchases that may be made

through other channels.

Which of the following ways did you use your mobile phone this holiday season? (Please select all that apply)

% of Respondents

I used my mobile phone to access the Internet to research products (compare product details, look up prices, find store locations, etc.) 34%

I made purchases online from my phone 15%

I used my mobile phone to compare products or prices while I’m shopping in person in a store 19%

I used retailer-developed mobile shopping apps 10%

None of these 57%

> Mobile phones give retailers the opportunity to target customers not only in their own

brick-and-mortar stores, but also in their competitors’ stores. While some retailers have adopted

location-based advertising that shows mobile shoppers targeted advertisements and specials based on

their locations, our research shows that customers are actively visiting competing websites and apps

in order to get product information. Forty-three percent of mobile shoppers accessed a competitor’s

website while shopping inside a store, 26% accessed a shopping comparison website, and 14%

accessed a competitor’s mobile app. Before the advent of mobile commerce, it was nearly impossible

for one retailer to compete with another inside a store’s four walls.

In which of the following ways did you use your mobile phone while shopping in a store?

% of Mobile Shoppers

I accessed that store’s website on my phone 65%

I accessed a competitor’s website on my phone 43%

I accessed a shopping comparison website (Shopzilla.com, Shopping.com) on my phone 26%

I accessed that store’s mobile shopping application on my phone 21%

I accessed a competitor’s mobile shopping application on my phone 14%


> Looking at how people are using mobile websites and apps should inform developers. The top

ways mobile shoppers used the mobile site or app was to look up prices and compare products.

How did you use the mobile site or mobile app? % of Respondents

To look up price information about a product 47%

To compare different products 34%

To look up product specifications 27%

To view product reviews 25%

To make a purchase 20%

None of these 14%

To find store information (location, hours) 12%

MEASURING SATISFACTION IS A MUST

The methodology used to conduct this study recognizes that satisfaction itself is not the only desired end

result. As shown in the following diagram, a world-renowned economics professor at the University of

Michigan created a methodology that measures customer satisfaction in such a way that it predicts

customers’ likelihood to shop again, buy more, or be loyal to the company in question. It has even been

shown to predict stock prices.


The impact of mobile customer satisfaction

on a retailer’s multichannel business is clear.

The data shows that a satisfied shopper is

far more likely to purchase (online and

offline), remain loyal, and engage in positive

word-of-mouth recommendations than is a

dissatisfied mobile shopper. While this may

be intuitive, ForeSee’s methodology is

able to quantify the impact of a satisfied

online shopper on a retailer’s overall

business operations.

As shown in the preceding diagram, customer satisfaction leads to:

> Future mobile purchases: Compared to shoppers who are dissatisfied with a mobile experience

(have satisfaction scores of 69 or lower), shoppers who are highly satisfied with a mobile website

(have satisfaction scores of 80 or higher) say they are twice as likely to purchase from the mobile site

in the future.

> Impact on purchases in other channels: Satisfied mobile customers report being 54% more likely

to consider that company the next time they are making a similar purchase, and 40% more likely than

dissatisfied mobile customers to purchase from other channels such as the traditional website or store.

Likely Future BehaviorsHighly Satisfied Mobile Shoppers (Satisfaction 80+)

Dissatisfied Mobile Shoppers

(Satisfaction 69 or Lower)% Difference

Purchase Next Time 91 59 54%

Purchase In-Channel 84 42 100%

Purchase Out-of-Channel 88 63 40%


CustomerSatisfaction

Purchase Online

Future Behaviors

Purchase Offline

Purchase Next Time

Recommend Website

Return To Website

Brand Commitment

Overall RetailerSatisfaction

ABOUT THE AUTHOR

As president and CEO of ForeSee, Larry

Freed is an expert on customer satisfaction

and author of Managing Forward: How to

Move From Measuring the Past to

Managing the Future. Larry speaks

extensively on the topic at private and public

sector industry events and has been quoted

in numerous publications and

media, including CNN, the Wall Street

Journal, the Washington Post, the New York

Times, Investor’s Business Daily, Internet Re-

tailer, Internet Retailing, Multichannel Mer-

chant, DM News, Computerworld, Federal

Computer Week and Government Executive,

among many others.

ABOUT THE RESEARCH TEAM

Rhonda Berg, Research Manager at ForeSee,

led the research team that worked on the ForeSee Mobile Research (U.S. Holiday 2011). Rhonda manages

many research initiatives, such as the annual Top 100 and Top 40 Retail Satisfaction Indices (both U.S. and

UK) and the quarterly E-Government Satisfaction and Transparency Indices. She also serves as an internal

consultant regarding statistics, methodology, and survey design. Rhonda has been a research professional for

20 years in a number of industries and holds advanced degrees in business and sociology.


FORESEE’S MOBILE MEASUREMENT CAPABILITIES

ForeSee measured customer satisfaction with 16 of the top mobile sites this winter using FGI’s customer research panel, and ForeSee also works with clients to measure customer satisfaction with mobile apps and mobile websites from inside the mobile experience. ForeSee monitors the customer experience on a continous basis to measure and improve the customer experience in ways that have a positive impact on cross-channel customer loyalty and purchases. ForeSee’s mobile solution is able to help organizations prioritize the efforts and enhancements that will have the greatest return on investment.

ForeSee’s mobile solution, first beta tested in early 2010 and formally made available to all clients in early 2011, is built upon the scientific and predictive methodology of the American Customer Satisfaction Index (ACSI) and employs a random but representative sample of users of any given mobile site or mobile application. ForeSee was the first organization to offer retailers a customer experience survey tool for mobile sites and apps on phones and tablets that is launched within the mobile site or app itself, providing users with an immediate way to share their opinions and contribute to the continuing evolution of an organization’s mobile capabilities.

ForeSee collects millions of surveys from mobile users, and ForeSee’s team of satisfaction and usability analysts transform that data into actionable customer intelligence that clients use to help direct investment and improvement efforts.


ABOUT FORESEE

As a pioneer in customer experience analytics, ForeSee continuously measures satisfaction and delivers

powerful insights on where to prioritize improvements for maximum impact. ForeSee applies its trusted

technology across channels and customer touch points, including websites, call centers, brick-and-mortar

locations, mobile experiences, and social media interactions. Because ForeSee’s proven methodology

measures satisfaction in a manner that is predictive of customer loyalty, purchase behavior, future financial

success, and even stock prices, executives and managers are able to drive future success by confidently

prioritizing the efforts that they know will achieve business goals.

Working across the public and private sectors, with deep expertise in a range of business and consumer

industries, ForeSee combines the best in customer satisfaction measurement, proven predictive analytics,

actionable usability analysis, and rich observational data to work with large and small organizations around

the world. The result of measuring success through the customers’ eyes is better outcomes for businesses and

a better experience for consumers.

ForeSee is a privately held company headquartered in Ann Arbor, Michigan. Visit us at www.foresee.com for

customer experience solutions and original research.

ABOUT THE RESEARCH METHODOLOGY

This report reflects data collected in November and December, 2011 as part of the 2011 U.S. Holiday Edition

of the ForeSee E-Retail Satisfaction Index. This year’s study included research on mobile shopping, web

shopping, and shopping in stores. The measured companies were the top 40 retail websites by sales volume,

as reported by Internet Retailer in its 2011 Top 500 Guide.

The ForeSee E-Retail Satisfaction Indices are based upon the methodology of the American Customer

Satisfaction Index (ACSI), the only cross-industry methodology scientifically proving that organizations that

more effectively satisfy customers realize higher financial returns. More information about the ACSI

methodology can be found at www.theacsi.org.

This study utilized FGI Research’s SmartPanel™, a nationwide panel of approximately 1.6 million consumer

households who have agreed to participate in opt-in surveys. In this multifaceted study, more than 23,000

survey responses were collected from November 29, 2011 through December 15, 2011.


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