2. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 2 38% of all web shoppers have used a mobile phone to 14% 34% access a retail website, mobile site, or mobile app of web shoppers used a visited the mobile site mobile phone or app of one of the to research Top 40 e-retailers products ONLINE SHOPPING INCREASINGLY DOMINATED BY MOBILE Data collected Nov-Dec 2011. 10% 15% used retailer-developed used their phone mobile apps to make purchases 19% of all web shoppers used their phone to compare prices while shopping in person at a store
3. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 3 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.
4. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 4 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. hoppers are using mobile phones to access websites and apps more than ever before. S 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.
5. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 5 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). Satisfaction It is important to note that these are some of Website Mobile Web the largest and most successful e-retailers in Store.Apple.com 85 83 the country. The average satisfaction score for Amazon.com 84 88 these 16 mobile experiences is 76. However, in a Dell.com 78 80 monthly benchmark that ForeSee maintains with Netflix.com 77 79 eBay.com 77 80 a much broader range of companies of all sizes BestBuy.com 76 78 across industries, the average score for a mobile Staples.com 76 78 experience is 67. Therefore, being at the bottom Avon.com 75 83 BN.com 75 81 of this list does not mean a subpar performance HomeDepot.com 75 78 since everyone on this list outperforms the VictoriasSecret.com 75 81 industry average of 67. Toysrus.com 74 75 Blockbuster.com 73 75 Target.com 72 76 Walmart.com 72 79 Sears.com 71 75
6. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 6 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. 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.
7. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 7 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.
8. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 8 Likelihood to Likelihood to Mobile Purchase from Purchase from Website Satisfaction Another Channel the Mobile Channel Score in the Future 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: 8% of online shoppers say they have used a mobile phone to access a retailer’s website, 3 mobile site, or mobile app. Have you ever used a mobile phone % of to access a retailer’s website, mobile site, or mobile app? Respondents Yes 38% No, and I don’t plan to 36% No, but I might in the future 25% Not sure 1%
9. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 9 sizeable percentage of all online shoppers made purchases from their mobile phone (15%) A 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? % of (Please select all that apply) Respondents I used my mobile phone to access the Internet to research products (compare product details, look up 34% prices, find store locations, etc.) 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 % of while shopping in a store? 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%
10. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 10 ooking at how people are using mobile websites and apps should inform developers. The top L ways mobile shoppers used the mobile site or app was to look up prices and compare products. % of How did you use the mobile site or mobile app? 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.
11. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 11 Future Behaviors The impact of mobile customer satisfaction Purchase Online on a retailer’s multichannel business is clear. The data shows that a satisfied shopper is Purchase Offline far more likely to purchase (online and Purchase Next Time offline), remain loyal, and engage in positive Customer word-of-mouth recommendations than is a Recommend Website Satisfaction dissatisfied mobile shopper. While this may Return To Website be intuitive, ForeSee’s methodology is Brand Commitment able to quantify the impact of a satisfied online shopper on a retailer’s overall Overall Retailer Satisfaction 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. Highly Satisfied Dissatisfied Likely Future Behaviors Mobile Shoppers Mobile Shoppers % Difference (Satisfaction 80+) (Satisfaction 69 or Lower) Purchase Next Time 91 59 54% Purchase In-Channel 84 42 100% Purchase Out-of-Channel 88 63 40%
12. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 12 ABOUT THE AUTHOR FORESEE’S MOBILE As president and CEO of ForeSee, Larry MEASUREMENT CAPABILITIES Freed is an expert on customer satisfaction ForeSee measured customer satisfaction with 16 of the top and author of Managing Forward: How to mobile sites this winter using FGI’s customer research panel, and ForeSee also works with clients to measure customer Move From Measuring the Past to satisfaction with mobile apps and mobile websites from inside the mobile experience. ForeSee monitors the customer Managing the Future. Larry speaks experience on a continous basis to measure and improve the customer experience in ways that have a positive impact on extensively on the topic at private and public cross-channel customer loyalty and purchases. ForeSee’s mobile solution is able to help organizations prioritize the sector industry events and has been quoted efforts and enhancements that will have the greatest return on investment. in numerous publications and media, including CNN, the Wall Street ForeSee’s mobile solution, first beta tested in early 2010 and formally made available to all clients in early 2011, is built Journal, the Washington Post, the New York upon the scientific and predictive methodology of the American Customer Satisfaction Index (ACSI) and employs a Times, Investor’s Business Daily, Internet Re- random but representative sample of users of any given mobile site or mobile application. ForeSee was the first tailer, Internet Retailing, Multichannel Mer- organization to offer retailers a customer experience survey tool for mobile sites and apps on phones and tablets that is chant, DM News, Computerworld, Federal launched within the mobile site or app itself, providing users with an immediate way to share their opinions and Computer Week and Government Executive, contribute to the continuing evolution of an organization’s mobile capabilities. among many others. ForeSee collects millions of surveys from mobile users, and ForeSee’s team of satisfaction and usability analysts transform ABOUT THE that data into actionable customer intelligence that clients use RESEARCH TEAM to help direct investment and improvement efforts. 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.
13. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 13 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.
14. FORESEE MOBILE RESEARCH (U.S. HOLIDAY 2011) 14 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.