Keynote: Competition Among Online Retailers Is Getting Intensive

HostReview.com
Thursday, February 17, 2005; 03:56 PM

The competition among online retailers is getting more intense as consumers become savvier about online shopping, and increasingly judge retailers based on their experiences across the Web, according to a study.

The syndicated research study conducted by Keynote Systems (www.keynote.com), The Internet Performance AuthorityŽ, provides a competitive benchmarking of leading retail Web sites.

The Keynote studies are performed regularly allowing for key industries to be tracked over time from an online customer experience standpoint. The next Keynote study covering the online retail industry will be issued in July 2005.
According to the current study, the Amazon.com, Barnes & Noble and Circuit City Web sites provide the best online shopping experience for consumers. The rankings are based on research with 2,000 customers as they interacted with leading retail Web sites.

In addition to traditional opinion data, Keynote's proprietary research technology collects detailed qualitative and behavioral data as these customers performed tasks at each site.

"It is becoming increasingly imperative for retailers to provide a strongly positive online shopping experience," said Dr. Bonny Brown, director of research and public services at Keynote.

The sites topping the Keynote Customer Experience Rankings performed best, in aggregate, across all 250+ measured metrics and the indices compiled from these metrics.

Keynote Customer Experience Rankings
1  Amazon.com
2  Barnes & Noble
3  Circuit City
4  eBay
5  Lands' End

The Amazon.com, Barnes & Noble, Best Buy, Circuit City, eBay, Eddie Bauer, Froogle, Gap, L.L. Bean, Lands' End, Macy's, Nordstrom, Office Depot, Sears, Staples, Target, Wal-Mart and Yahoo! Shopping sites were among those evaluated as part of the study.

The study also indicated that customers have become increasingly savvy when it comes to online shopping, and that their expectations are increasingly set by what they experience at other retail sites across the Web.

In fact, Keynote found a direct correlation between the customer experience online and purchase impact rates on retail Web sites, as measured by the Keynote Purchase Impact Index.

In general, specialty apparel retailers provided the best online customer experience of all retail verticals, and had the best conversion rates as compared to all other traditional retail categories.

"The specialty apparel retailers do an excellent job of creating a personal, customer-focused online shopping experience," said Brown.

Those companies with an extensive history of catalog selling, including L.L Bean and Land's End, were among the best performing apparel sites, and were joined by the Gap in the top-tier of apparel retailers online.

The study also found that, aside from Amazon and eBay, retailers that focused on one retail category (e.g., books, electronics, apparel) faired better with consumers than department store retailers with multiple product categories.

The most closely competitive retail category is among office supply retailers, where Staples and Office Depot are not only among the leading retailers in terms of percentage of their overall sales from the online channel (exceeding 15% of sales according to Internet Retailer), but the companies are also extremely closely matched in terms of customer experience. The competitors performed equally well in the Keynote CE Rankings.

"It is critical for retailers to look at their competition and learn from the leaders," said Dr. Brown.

Keynote is viewed as The Internet Performance Authority due to the company's global infrastructure of over 1,600 measurement computers in more than 50 cities worldwide.