Retail consumer satisfaction rises for the third consecutive year

According to a research issued today by the American Customer satisfaction Index (ACSI), customer happiness in retail has improved for the third year in a succession. The retail sector as a whole rises 1.7 percent to an ACSI benchmark of 77.9, bolstered by improved consumer satisfaction at specialized retail stores, supermarkets, medication stores, and petrol stations. A fourth conventional retail category, department and discount stores, had no improvement in consumer satisfaction from a year ago.

According to the survey, enhanced customer service and extensive discounting among brick-and-mortar businesses more than compensate for a dip in consumer satisfaction with online purchasing. With more consumers opting to purchase online, Web merchants’ customer service may have struggled over the 2013 holiday season. Although online sales growth for the period was lower than predicted, it substantially outpaced the increase in traditional retail sales.

“A spate of last-minute holiday purchases online, combined with inclement weather, left some buyers disgruntled by delayed shipments,” said Claes Fornell, ACSI Chairman and Founder. “That’s most likely why Internet retail has had its lowest consumer satisfaction benchmark in more than a decade. Nonetheless, decreased foot traffic at malls, along with an increase in purchasing via mobile phones and tablets, suggests that consumers are swiftly adopting the benefits of online commerce.”

The American consumer Satisfaction Index (ACSI) is a national economic indicator that evaluates consumer satisfaction with the quality of products and services accessible to American households. The ACSI uses data from interviews with around 70,000 consumers each year to input into an econometric model that analyzes customer satisfaction with over 230 enterprises in 43 industries and 10 economic sectors, as well as over 100 federal government services, programs, and websites.

Specialty retail rises, while department and budget retailers exhibit disappointing gains.

Customers enjoyed an improved purchasing experience at specialty stores during the 2013 Christmas season, with the category increasing by 2.6 percent to an ACSI standard of 80. Department and bargain stores, on the other hand, hold constant at 77. Upscale Nordstrom leads with 83, while discounter Walmart receives 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,” said David VanAmburg, the director of the ACSI. “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 consolidate in the ACSI range of 77 to 79, including J.C. Penney, Sears, Target, and a collection of small retailers. JCP is down 2% from a year ago, while Sears is up 3%. Macy’s falls 3% to 76, but Target plummets 5% to an ACSI standard of 77.

Among specialized businesses, which include wholesale warehouse clubs, office supply chains, and apparel stores, Costco reclaims the lead with a 1% increase to 84, followed by Barnes & Noble (unchanged) and Lowe’s (+4%) at 82. Home Depot increases 3% to 79, but falls shy of Lowe’s, which has had a decade-long lead in customer satisfaction in home improvement. At the low end, discounter TJX rises 4% to 79, narrowly clear of Gap and Best Buy (both at 77).

The newly amalgamated Office Depot and OfficeMax are moving in distinct ways as of the fourth quarter of 2013, with Office Depot down 6% to 79 and OfficeMax up 5% to 82. Staples improves as well, rising 3% to an ACSI standard of 81.

“Mergers often lead to problems with customer service and reduced customer satisfaction,” VanAmburg remarked. “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.”

Specialty retailers have higher evaluations for staff civility, store layout, and sanitation (ACSI criteria of 81) than department and bargain stores (78). Name-brand products is also more readily available at specialty stores (81) than in department and bargain stores.

Publix triumphs among supermarkets, but smaller pharmacy stores increase their advantage.

When it comes to grocery purchasing, customers notice exceptional value for money, and the industry’s ACSI score has increased by 1.3 percent to 78. Among national and regional supermarket businesses, Publix leads in customer satisfaction with a consistent score of 86. Since the ACSI’s inception in 1994, Publix has consistently ranked first in its category—a accomplishment unequaled by any other firm in the Index.

The aggregate of lesser grocery chains comes in second at 81, closely followed by Kroger at 80. For the first time in six years, Whole Foods’ customer satisfaction has declined by 3% to 78. Winn-Dixie, Supervalu, and Safeway are all in a close group, with ratings ranging from 76 to 77, while Walmart falls behind at 72.

Customer satisfaction with health and personal care (drug) enterprises has increased by 2.6 percent, attaining an ACSI standard of 79. The improvement is due to a considerable increase in sales at smaller pharmacy outlets. Walgreens and CVS are deadlocked at 76, with Rite Aid down 4% to 74.

Customers obtain excellent grades to supermarkets and medicine stores for their locations and hours (ACSI criteria of 86 and 87, respectively). When questioned about the excellence of pharmaceutical services, consumers give drug shops higher evaluations (84) than supermarkets (80).

Customer satisfaction with internet purchasing declines to a 12-year ACSI low.

Customer satisfaction in Internet retail decreases 4.9 percent to an ACSI benchmark of 78, the lowest since 2001. While the results for the main pure-play Internet merchants, such as Amazon.com and eBay, differ, the reduction is mostly due to a substantial dip in smaller sites, which include both pure players and brick-and-mortar store websites. This cohort declines 9 percent to the bottom of the industry, at 75.

While increasing demand over the holiday season may have caused a service difficulty for certain Web merchants, Amazon improves customer satisfaction by 4% to lead the category with 88. Newegg is second at 83, with eBay down 4% to 80. Similarly, Overstock declines 2 percent to 79. Netflix demonstrates a substantial 5 percent increase, somewhat recovering from a severe blow to consumer satisfaction that the firm suffered in 2011. Netflix is improving at 79, but it is still far from attaining its high ACSI of 87 in 2009.

Shoppers regard online merchants’ checkout and payment processes (ACSI standard of 90) to be far preferable to those of typical department and discount stores (72) or specialty retailers (77). In terms of products range and availability, online sites outperform traditional retailers by a significant margin.