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Report: Americans prefer online shopping to brick-and-mortar

John Gallagher
Detroit Free Press

DETROIT - Enjoy shopping online? You have lots of company.

Online shopping easily beat brick -and-mortar retailing in the University of Michigan's annual American Customer Satisfaction Index.

To be released today, the latest index shows Americans gave online retailing a score of 80 on a scale of 100, compared with 74.4 for all retail trade.

The highest-rated shopping experience of all was the book-and-music Web site www.barnesandnoble.com, which scored 88 . Runner-up was its competitor www.amazon.com with a score of 87.

Cathy LaMont, owner of a Detroit-based title insurance company, shops frequently on amazon.com and enjoys the e-mail alerts she gets for books she's likely to want, such as the latest Harry Potter for her children.

"It's painless. It's like a private shopper at a clothing store," LaMont said Monday.

The ACSI survey looked only at national retailers.

Cindy Ciura, owner of a Bloomfield Hills, Mich.-based retail-consulting firm, recently adopted an infant girl with her husband and finds herself shopping more and more online.

"I think online shopping is a direct result of being time crunched," she said Monday. "The idea that you can purchase something online and within a week or so it shows up at your front door, there's something to be said for that."

Claes Fornell, a University of Michigan business professor who oversees the index, said customer satisfaction with online shopping is a reflection of consumers' growing sophistication in finding the best prices, products and service.

That's true both in stores and in the virtual world. Customers' overall satisfaction with American retail hit an all-time high during the fourth quarter of 2006, measured at 74.9 on the 100-point scale.

"There's a shift in power from seller to buyer," Fornell said. " The buyer has more choice, inflicting more severe penalty on companies that don't provide good levels of service, and can also reward companies that do it right."

Take Costco, the warehouse outlets that scored an 81 satisfaction level in the survey, the highest score for any specialty outlet. By contrast, the Circuit City chain scored a lowly 69.

"They do a part of what used to be the consumer's job," Fornell said of Costco, which stocks an ever-changing array of limited quantities of items.

"They select the product assortment and it's fairly narrow, and they only try to go for things that they know are of high quality, which is completely different from, let's say Kmart, which actually stocks much broader items," he said.

LaMont says she's a fan of Costco.

"One of the things that they have done, they appeal to the impulse buyers," she said. "Because if you see something that looks great, you have to get it because in two weeks it'll be gone. You can't delay your decision."

If online shopping is popular, gasoline stations as a group were not. Gas stations scored just 71 on the scale, the lowest of any category. High gasoline prices account for that, Fornell said.

Health insurance also provided a below-average level of satisfaction, perhaps reflecting the rising cost and complexity of medical bills. It scored 72 on the scale.

One reason for online's popularity among shoppers is that retailing Web sites have become much more useful, said Larry Freed, president and chief executive of ForeSee Results, an Ann Arbor, Mich.-based Web-retailing consulting firm.

"There are many product lines where you can actually get a better browsing experience online than offline," he said. "If you're looking for a big-screen TV, 60-inch plasma or whatever, you go to a store, you see it alongside 20 other models, it's the same feed coming in to all, it's really noisy, you can't hear how loud the fan is, you've got an associate that may or may not be very skilled and knowledgeable about it.

"The alternative is that you can go online, and you can get a great sense for the product, you can turn it around, look at the back of it, all the features and specifications, and even now things like consumer reviews."

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