Customer satisfaction scored improved for a third consecutive year for retail, boosted by higher scores from specialty retail stores, supermarkets, drug stores, and gasoline service stations, according to a report from the American Customer Satisfaction Customer Index (ACSI).
The overall retail sector gained 1.7% to an ACSI benchmark of 77.9. A fourth traditional retail industry, department and discount stores, did not change in customer satisfaction compared with a year ago.
What’s more, better customer service and widespread discounting among brick-and-mortar retailers offset a drop in customer satisfaction with Internet retail.
As more shoppers purchased online, customer service might have encountered a rough patch for Web retailers during the 2013 holiday season. Although online sales growth for the period was weaker than expected, it far exceeded the uptick for traditional retail sales.
“A spate of last-minute holiday purchases online, combined with inclement weather, left some buyers disgruntled by delayed shipments,” Claes Fornell, ACSI Chairman and founder, said in a press release. “That’s the likely reason for Internet retail getting its lowest customer satisfaction benchmark in more than a decade. Nevertheless, diminished foot traffic at malls—along with a surge in shopping via mobile phones and tablets—indicates that consumers are increasingly embracing the advantages of online commerce.”
Customers had a better shopping experience at specialty retailers during the 2013 holiday season, with the category gaining 2.6% to an ACSI benchmark of 80. Department and discount stores, on the other hand, remained flat at 77. Upscale Nordstrom leads at 83 and discounter Wal-Mart had the lowest score of 71.
“For traditional retailers, discounting in and of itself is not necessarily associated with weak customer satisfaction, nor is high-end retailing a guarantee of the opposite,” David VanAmburg, ACSI Director, said. “Discount chains Kohl’s and Dollar General are both above average for customer satisfaction and are among the industry’s top four, while Macy’s, a traditional department store, comes in at the low end.”
Several chains fell in the ACSI range of 77 to 79, including J.C. Penney, Sears, Target and the aggregate of smaller stores. Compared with a year ago, J.C. Penney is down 2%, while Sears is up by 3%. Macy’s declines 3% to 76, but Target suffers the greatest negative change, tumbling 5% to an ACSI benchmark of 77.
Among specialty retailers, including wholesale warehouse clubs, office supply chains or clothing stores, Costco regains the lead with a 1% uptick to 84, followed by Barnes & Noble (unchanged) and Lowe’s (+4%) at 82. Home Depot improves 3% to 79, but doesn’t catch Lowe’s, which has held the customer satisfaction advantage in home improvement for over a decade. At the low end, discounter TJX gains 4% to 79, pulling slightly ahead of both Gap and Best Buy (tied at 77).
The newly merged Office Depot and OfficeMax move in opposite directions as of the fourth quarter of 2013, with Office Depot slumping 6% to 79 and OfficeMax gaining 5% to 82. Staples improved as well, up 3% to an ACSI benchmark of 81.
“Mergers often lead to problems with customer service and reduced customer satisfaction,” VanAmburg added. “It is too early to tell how the larger company created from the Office Depot-OfficeMax merger will fare in 2014, or if Staples will emerge as the real winner among office supply chains in the battle for customer satisfaction supremacy.”
Customers recognize good value for their money when buying groceries, and the industry inches up 1.3% to an ACSI score of 78. Among national and regional supermarket chains, Publix dominates for customer satisfaction with a stable benchmark of 86. Ever since the ACSI’s inaugural year in 1994, Publix has remained No. 1 in its category—a feat unmatched by any other company in the Index.
The aggregate of smaller grocery chains places second at 81, followed closely by Kroger at 80. For the first time in six years, Whole Foods drops in customer satisfaction, down 3% to 78. Winn-Dixie, Supervalu and Safeway are tightly grouped with scores of 76 to 77, while Wal-Mart lags behind at 72.
Customer satisfaction with health and personal care (drug) stores is up 2.6% to an ACSI benchmark of 79. The improvement comes from a large gain for smaller drug stores. Walgreens and CVS are tied at 76, while Rite Aid slides 4% to 74.
Customers give high marks to both supermarkets and drug stores for locations and hours (ACSI benchmarks of 86 and 87, respectively). When asked about quality of pharmacy services, shoppers give better marks to drug stores (84) than to supermarkets (80).
Customer satisfaction with Internet retail sank nearly 5% to an ACSI benchmark of 78, the lowest score since 2001. While results for the largest pure-play Internet retailers like Amazon.com and eBay vary, the decline is mostly attributable to a big drop for smaller sites, including both pure players and the websites of brick-and-mortar retailers. This group plunged 9% to the bottom of the industry at 75.