Photo: Walmart
Has the retail industry upped its customer service game?
Customer satisfaction with retailers following the 2016 holiday season was at an all-time high. That’s according to the recently published results of the American Customer Satisfaction Index (ACSI). However, some of the reasons these customers were happier may cause concern for the industry going forward.
The ACSI, which covers department stores, discount outlets, drugstores, gas stations, online retail and specialty chains, saw customer satisfaction levels climb nearly five percent to 78 on a scale of 100. This best-ever score for the industry followed two years of declines.
As to the why behind the improvement, ACSI points to the shift of sales to online sites and to declining traffic at mall-based stores.
Online had the highest retail sector score of 83, up 3.8 percent from last year. Amazon.com, which was up four percent, led the pack with a score of 86, followed by Newegg (83), Netflix (79 and Overstock.com (79).
Department stores saw customer satisfaction levels increase. Dillard’s — tied with Costco for the highest score overall for brick and mortar stores — improved four percent to 83. J.C. Penney achieved the biggest year-over-year gain, jumping 11 percent to 82. Nordstrom was the only department store to see its score decline. The chain fell two percent to tie with Belk at 80.
“As traditional outlets such as Sears, Macy’s and J.C. Penney shed properties, shoppers may experience better service in the stores that remain,” said David VanAmburg, ACSI managing director, in a statement. “Although this is obviously not ideal or sustainable in the long run, fewer customers mean shorter lines, faster checkout and more attention from sales staff.”
Interestingly, Walmart was among the retailers posting the biggest improvement in their ACSI scores. The chain, which has invested in better pay and training for associates and managers, positioned “Holiday Helpers” near registers the last two months of the year to help create “an extra fast, friendly checkout experience.” While Walmart improved nine percent from the previous year, it was still last among all retailers assessed with an ACSI score of 72.
Discussion Questions
DISCUSSION QUESTIONS: Do you think the retail industry, in general, is doing a better job today in satisfying customers than in the past? What factors — human or technological — will contribute most to customer satisfaction in the years ahead?
Poll
BrainTrust
Jasmine Glasheen
Content Marketing Manager, Surefront
Ken Morris
Managing Partner Cambridge Retail Advisors
I didn’t find the questions asked in the survey but I’m quite skeptical true “customer service” improved with slashed training budgets and workforce budgets.
“Customer service” here could have meant that a customer could return anything without a receipt or get a discount just by asking, as much as it could mean they had an awesome shopping experience in a brick-and-mortar store.
No, retailers are not doing a better job of satisfying customers — customers’ expectations are simply lower. As noted in the article, a decline in store traffic will naturally provide those shoppers who do visit the store with a better in-store experience — easier access to sales associates, shorter check-out lines, etc. While I believe that technology will be a powerful enabler for better customer experience and thus satisfaction, I believe that the human connection between store staff and shoppers is the most important driver to delivering a great store experience and customer satisfaction.
We should have a roundtable discussion on this question because so many factors impact satisfaction. All retailers are playing a multi-year catch up game as technology-driven change has set the competitive landscape on new courses. Yes, traffic and conversion are the ruling monarchy. But their weaknesses are all-too-often clear, and customer experience is the Constitution in the land. God be with all retailers as each answers the question, “what now is the relationship between contributing factors toward win-win-win for brands, retailers and consumers?”
Retail and all other B2C spaces are definitely taking their customer experience game to new levels. Omnichannel in all its names has been a driver and nothing inspires like a competitive landscape in the era of the empowered consumer. The establishment of the customer experience practice under the CMO using the voice of the customer as its starting point continues to show progress in change management. Digital place-based technologies, which continuously prove high ROI, will continue to drive improved customer experience and satisfaction.
It looks like individual brick-and-mortar stores like Walmart that make investments in customers service are being rewarded with higher satisfaction scores. But it’s ironic that brick-and-mortar stores in general are outpaced by online competitors. Customers shop in stores to find a level of human interaction that they can’t really get online — whether it’s a “high touch” retailer like Nordstrom or a self-service environment like Target. As these stores try to manage the demands of their “omnichannel” business, the visibility of sales associates (and execution of in-store merchandising strategies) seems to be on the decline.
Survey results are good and always worth looking at. But the proof in the pudding is what happens when you go in the store as a customer or browser. My experience tells me there is little to no improvement over the years with the big box retailers. How can there be when budgets have been slashed? There is improvement in the smaller box retailers. They always seem to hire staff willing to help. Why is there a difference? I think this shows those in the bigger box supervisory roles do not care as long as there is coverage at the cash wraps.
I do feel that customer experience is slowly improving, particularly with online buying. The chat aspect seems to have both increased and vastly improved in the last year with retailers understanding that consumers want instant answers from people who can really help them. I actually believe this is because customers expectations have increased therefore pushing a general improvement and focus in this area from retailers.
The retail industry is not doing a better job of satisfying customers, they’re just terrified. Sure, department store holiday customers may have been greeted with a desperate, manic “friendliness,” but this is a lot different than the consistent presence of a well-trained staff. I agree, however, that the better pay and training initiatives offered by companies like Walmart help cultivate staff members that care about their jobs. I just hope the good service is coming from a place of lasting company loyalty, not of the terror of losing their jobs.
LOLROTFL … that is me rolling on the floor laughing at your succinct post, not retail management, who you rightly characterize as terrified! I share your hope, and am even optimistic that smart retail management will embrace not just clearly defining their problems but the solutions that are available to solve them. I liked this Forrester quote from NRF … “73% of retail businesses identify that improving the customer experience as a priority. Second only to increasing revenue. 68% of retailers have made personalization and experience a priority, but 53% lack the right technology to personalize.”
First things first, customer satisfaction is not the same as customer service. And not all retailers have addressed issues of satisfaction equally via customer service.
I do think the industry is doing a better job satisfying customers. I think this comes from a variety of sources. Technology has improved supply chain and seamless inventories, staffing, training and in-store awareness. Human contact is also improved with a higher level of customer orientation and less “not my department.” Staff and technology continue to work together to address and improve the shopping experience.
I think competition has inspired retailers in reaction to Amazon and that has improved customer satisfaction. Some niche players have raised entire categories, e.g., TJX, Ulta, REI, Warby Parker and Bonobos.
A large part of the improvement in consumer satisfaction is due to technology. Before, retailers mostly made decisions independent of their shoppers’ input. Today, shoppers are happier partly because their feedback is finally starting to influence retailers’ business decisions.
One one hand, today’s consumers have much better access in looking up products that they would like. Retail Touch Point reported that more than 90 percent of consumers are using their smartphones while shopping in retail stores to compare price, search for product info and get reviews. This means shoppers can independently figure out the best product for themselves. On the other hand, many retailers are also using technology to better connect and communicate with their customers. They are responding to social media tweets, creating email marketing campaigns, starting to personalize recommendations and listening to user feedback. When even Walmart has started offering more organic products in their stores as a response to customer demand, it’s not a surprise that customers are more satisfied with retailers today than before.
One area where CRM has fallen short for customer satisfaction is in capturing individual intent on store visits while the shopper is on a path to purchase. This is now being addressed with technology. One example: Many shoppers for considered purchases spend up to two to three months of research to make their decisions, including store visits. Best Buy, for instance, notices shoppers taking pictures of items and price tags to text or email to themselves as part of the process. Best Buy does not capture any of this intent data, and thus can not help the shopper on their journey. But new technologies can give retailers a way to let shoppers set reminders and info about their store visits within the CRM, so that the retailer now has permission to market to the individual on those items and on criteria they set, such as “please let me know if the price drops” or “please let me know if a newer model is added,” etc.
No doubt retailers are trying harder than ever to improve customer satisfaction, but the focus has been more on leveraging technology to do so rather than focusing on the best asset they have in the store — their associates. I’ve said many time before that training and associate enablement are hot topics every year for the last few years, but we see few retailers actually increasing their budgets to achieve this. And I’m not counting budgets for purchases of tablets for associates in this statement. While you can give an associate a tablet to “enable” them to deliver better service to customers, they still need to be trained on the proper use of the technology — especially when to use it and when not to depending on the customer.
Retailers need to focus not just on technology enablement in the store, but also better training their human element — the associates — to deliver improved satisfaction. I believe specialty apparel stores are doing a better job of this not just because their associates deliver a more personalized experience but because they are more knowledgeable about store products than in many big box stores.
As shown by the ACSI results, retailers have stepped up to meet consumer needs and provide better satisfaction than in years past. However, there is still so much potential to be met as the consumer base wants higher quality products in a shorter timeframe. In the years ahead, retailers need to focus on technology that will help them collaborate and pull in data and trends from services, partners and suppliers quickly to deliver an end product that is exactly what the consumer wants and do so as quickly and efficiently as possible.
I agree with the comments made. First, there are a lot of things that can go into a customer’s perception of customer experience. Second, this was the biggest e-commerce holiday season ever (as reported by Adobe Digital Insights and other sources). Thus the lower foot traffic could result in better service simply because there are fewer customers in-store. It’s hard to believe that as brands cut budget that the experience would actually improve if you’re comparing on an apples-to-apples basis holding key independent variables consistent.
Last year more than $62 billion was lost to poor customer service, up almost 50 percent from two years prior (according to NewVoice Media). Some would think this means that customer service is getting worse. The reality is, as these numbers show, it is getting better. What is happening is that the consumer has higher expectations than ever. Great companies are setting the bar high for others. While the others are doing better, they are not keeping pace with expectations. That said, scores are improving and eventually the gap will narrow. (Good news for retailers and customers!)
The future of customer service will have technology supporting human interaction. The biggest opportunity will be found in how technology tracks customers and allows retailers to create personalized experiences online and in-store. That is the near-term future outlook. The retailers who take advantage of the data they collect to deliver a better personalized experience will win in the form of building customer loyalty.
Personally, I haven’t seen an appreciable difference in the in-store customer experience but have seen a big difference in the technology available to the customer and associate for self help. The apps, websites and catalogs are all contributing to a showrooming, webrooming and catalogrooming experience that is shaping the new retail customer journey.
People don’t shop stores like they used to, but the store is still a key component of the shopping journey. They get a catalog in the mail, go online with their phone, tablet or laptop to compare price and style, they visit the store to touch and feel then complete the purchase online. The store isn’t dead — its role is just changing to adapt to the new customer experience.
The advent of real-time retail will change the customer experience going forward. Understanding who is shopping before checkout gives us an unprecedented opportunity for customer intimacy, however retailers need to be careful when proactively interacting with customers from an associate or technology perspective to avoid the creep factor. We need to build processes that create a natural dialog with the customer that follows a Q & A that satisfies the customer without freaking them out. There are lots of opportunities to enhance the customer experience, but we need to be careful how we use technology and information.
There are multiple reasons that consumers choose to shop various retailers. Service is but one of them.
Each of those reasons to shop a particular retailer or merchandise category drive toward building Loyalty. Loyalty wins repeat customers trips and revenues. Generally speaking, the leading reasons to choose a Retailer MOST often are lead by price, selection, quality and location in varying order for each retailer or merchandise category. The objective is to bring the customer back for added experiences.
Other leading reasons include brands available, couples and special offers, retailer trustworthiness, knowledgeable salespeople, ease of use of the website, newest styles, fashion ideas, value and yes, service. Service falls somewhere in the middle of 25+ different reasons for a consumer to enter into their shopping experience.
Measuring and monitoring each of those reasons and sharing the results with associates keeps the retail organization on top of building the loyalty that benefits all — retailer, associates and customers.
Retailers who are growing and protecting their strengths on the most important reasons for their customer base to return are doing a better job of building loyalty and satisfaction among customers. Those who are not need to adjust and move forward, lest they find a path to extinction used by the Dodo Bird.
The expectations of today’s consumer have forced retailers to up their customer service and customer satisfaction game. With the rapid evolution of high-tech features and capabilities of online shopping, customers are expecting more from their shopping experiences. Retailers must adapt and leverage new technologies in order to meet these expectations and remain competitive in an industry of choice.
We’re seeing more and more online retailers adopt conversational technologies such as chatbots in an effort to enhance customer service capabilities. By offering instant support with everything from IT problems, to product information, to purchase suggestions, these technologies also provide a prime opportunity for customer interaction. Other tech features that are transforming the online customer journey include persistent shopping carts, mobile optimized screens, and streamlined checkout pages.
As consumers continue to expect more from their shopping experiences, retailers stand to gain business, revenue, and customer loyalty by embracing more technological advances.
No, I don’t think so, and I don’t agree with this: “Fewer customers mean shorter lines, faster checkout and more attention from sales staff.” It is the opposite. When there are fewer customers, no one is around to take your money because they close all the cash registers, make you go to one in a different area totally out of your way, and then you have to wait in a long line. And then the staff is fresh and says you can’t pay for that here.
I would rather stay home and order online. But now online purchasing is punishing us for returns. My sister bought a $35 car charger and it was broken. She sent it back and they charged her a $40 restocking fee. Don’t worry, she is fighting it and will get her money back. Why are they punishing her for returning a broken charger? They should say they’re sorry and send another one … but they don’t. To have happy customers, all you need to do is listen to them and be nice to them.
Lots of great comments. The one I agree with most is from Lyle Bunn: “We should have a roundtable on this” because so many factors play a role. I will add one more factor — consumer sentiment. We saw marked increases in sentiment going into Christmas. A happier consumer overall may look at things differently … more optimistically.
On the specific subject, as more small, special interest chains come to market such as Earth Fare, PetPeople, etc, their employees usually have an affinity for the products sold there. Someone who works at The Vitamin Shoppe, for example, is probably not applying to work at Burger King. Health & Wellness are a part of their lifestyle. There are examples in larger stores as well — Best Buy and Hobby Lobby come to mind. Conversely, if you walk into a Home Depot or Lowe’s you may find a master plumber and you may find someone with zero personal interest in home improvement. All this underscores that the “people asset” can be a point of differentiation.
A key factor in satisfying customers is personalization. TimeTrade’s research shows that retail customers put high value on personalized shopping experiences. However, our studies also revealed that nearly half of consumers “never” or only “sometimes” receive what they consider to be personalized service. In fact, 70 percent of the time they shop they said they “never” or only “sometimes” can find a sales associate when they need assistance. There are many ways retailers can improve their personalized shopping offerings including offering shopping consultations, in-store events and destination experiences.
I find this discussion topic slow to turn towards what should be explored with refined relevance to market jurisdiction, company scope and market strengths. Consumers are wise to what can and should be expected from e-commerce, brick & mortar and service oriented vendors vs. price sellers. There should be taken into account differences in the industry types like fast food, automobile and grocery to name a few. Leveling the playing field by adjusting information additions, deletions and values according to the needs of the market makes for more accurate reports. A more accurate report provides greater insight as to the company’s success at gaining or losing their established and new customer base.
The real question is, just how valuable is a satisfied customer? It’s true that customer satisfaction is at an all-time high, but the end result for retailers is that customer satisfaction and excellent service is no longer a differentiator, it’s just a ticket to the game, and a “highly satisfied” customer is not necessarily a loyal one. Retailers can no longer work towards just “satisfying” customers — they have to make them feel good about themselves. Emotional motivators of social acceptance, confidence, or lifestyle affirmation offer a significant multiplier — for example, in our own study of 60,000 retail banking customers, emotionally connected customers hold 20 percent more products than customers who are “highly satisfied,” and have a 78 percent lower attrition rate.