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2009 June 1 - 12:00 am

TECHNOLOGY TODAY: E-Commerce Continues Growth, but All Is Not Well for Digital Merchants

Electronic commerce, or e-commerce, is becoming more and more mainstream for more and more people. Ordering products online for many consumers is just another way of shopping.

E-commerce took off in 1995 about a year after the Web took off, with Amazon.com and eBay both launching that year (eBay at first was named AuctionWeb). The dot-com bust hit five years later, but since then online business has not only recovered, but soared.

Despite the recession, online retail sales in the U.S. should grow by an additional 11 percent to $156 billion this year and an average of 10 percent during each of the next five years, according to market research firm Forrester Research (www.forrester.com). Apparel, computers and autos are the three largest online shopping sectors.

Anyone who has shopped online knows the benefits of being able to quickly locate hard-to-find items, comparison shop with relative ease, read user reviews of products and services, and place orders without having to get up from your chair.

But all is not well in the world of e-commerce, with customer satisfaction declining this year compared to last year as consumers have become more price-sensitive, according to another new study, by market research firm ForeSee Results  (www.foreseeresults.com). The apparel and the food and drugs sectors saw the largest drop of those measured, with each experiencing a decline in customer satisfaction of 3 percent.

Of the top 100 “e-tailers” by sales volume, those that received the best scores by customers surveyed were online retail stalwarts Netflix, with an 85 percent satisfaction score, and Amazon.com, with an 84. Both have led all e-tailers for each of the past five years of ForeSee Results surveys. Rounding out the top six were QVC, Doctors Foster and Smith, Newegg.com, and Avon, all at 81. The company showing the greatest improvement since last year was Kohls, up 6 points to 76.

Perennial customer satisfaction favorite Apple slipped for the first time, by a substantial 5 points, to 75, as it ramped up its cell phone business. Other notable decliners were CVS, down 8 points to 71, NeimanMarcus down 7 to 70, and Williams-Sonoma, down 6 to 73. Coming in at the bottom were efollett.com at 62, Market America at 63, and Etronics.com at 63.

“Online shoppers are a savvy group, able to compare price and merchandise at the click of a mouse,” said Larry Freed, ForeSee Results president and CEO. “In an economy where rising unemployment, plummeting home values, and tight credit continue to make headlines, consumers are punishing retailers if they feel prices aren’t fair or competitive.”

Interestingly, Web sites with product reviews by customers were rated by consumers an average of 10 points higher than those without.

Surveys are also commonly done to measure satisfaction among consumers of personal computers, which are bought both online and in person. The reliability rankings from Consumer Reports’ surveys of its readers are widely followed, though the magazine’s latest published findings revealed only that Apple desktop computers stood out as notably reliable, none evaluated were notably repair prone, and no laptop computer brand stood out either way.

PC World magazine’s latest published survey results went into considerably more detail. The top-ranked desktop computers for reliability and service among consumers surveyed were Apple, Acer, and eMachines. For laptops, the top ranked were Apple, Acer, and Sony.

For satisfaction by consumers with personal computer manufacturers, according to a recent survey by Forrester Research, Apple bested the competition by a wide margin, with an 80 score, which isn’t surprising given the sometimes single-minded enthusiasm of many Mac users. The nearest competitor was Gateway, at 66. HP and Compaq were close with a 64 and 63 percent score respectively. Scores were based on usefulness, ease of use and enjoyment rather than reliability and service.

PC World also recently surveyed consumers for ease of use, reliability, and service regarding computer printers and digital camera. According to the magazine, “Canon is to printers what Apple is to desktops and laptops: Simply put, our readers love their products.” Also scoring well were Samsung, Brother, and Epson.

For digital cameras, most manufacturers received average ease of use scores in the PC World survey, with only Kodak receiving a “Better” score and only Nikon receiving a “Worse” score. Fujifilm, Panasonic, Canon, and Nikon received the top scores for reliability.

Surveys like these aren’t foolproof, providing as they do a general measure of  consumers’ past experience. This can shed light on your own likely future experience though it can’t guarantee it.

Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway. He can be reached at reidgold@comcast.net or www.reidgoldsborough.com.

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