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Amazon (AMZN) Customers Satisfied, While Netflix (NFLX) Gets Opposite Reaction

December 28, 2011 7:24 AM EST
How does the classic Robert Frost poem go again?

"Two roads diverged in a wood, and..."

Well, Netflix and Amazon are on different roads, is the whole point. And the divergence is widening.

Netflix (Nasdaq: NFLX) consumers are getting more and more unsatisfied, and Amazon.com (Nasdaq: AMZN) is laughing all the while.

According to results from a recent ForeSee consumer e-Retail satisfaction survey for holiday 2011, Amazon gained 2 points to 88 on the 100-point scale, which places it at the top of the list.

Conversely, Netflix dropped from 85 last survey, to 79 with the recent tally. Recently publicized management blunders and sharp price hikes likely contributed to the result.

Amazon and Netflix had been only separated by a few points in the past. The companies are also becoming more direct competitors with Amazon making a stronger effort to enter the streaming media realm, a market Netflix is placing its future on as well.

Commenting, ForeSee CEO Larry Freed said, "Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors... Raising prices by 60 percent and splitting the baby into separate DVD and streaming services totally undermines Netflix's cost and convenience advantages. Customer satisfaction is predictive, which means that Netflix's financial woes may be just beginning."

The second-place finishers were Avon (NYSE: AVP), JCPenney (NYSE: JCP), QVC.com (Nasdaq: LINTA), store.Apple.com (Nasdaq: AAPL), and VistaPrint.com (Nasdaq: VPRT), each at 83.

Overall satisfaction hit 79 among the top 40 e-Retailers for 2011, matching the same mark in 2009. Both were the highest point since the survey began.

Two other key points from the survey:
  • Next to Netflix, both Gap.com (down 6 percent to 73) (NYSE: GPS) and Overstock.com (down 5 percent to 72) (Nasdaq: OSTK) have the largest declines in satisfaction, leaving them with scores at the bottom of the Index.

  • On the other end of the spectrum, the largest gains in satisfaction go to TigerDirect.com (up 8 percent to 79) and JC Penney (up 6 percent to 83), which named Ron Johnson, former head of Appleā€™s retail operations, as CEO this year.


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