Customer Experience Surpasses Brand, Price

This is the year that customer experience surpasses brand and price as the most important factor in retail, according to several studies, including one that says 86 percent of consumers will pay a premium for it. If this is the year of customer experience, then H-E-B, Trader Joe’s and Wegmans are in good shape.

That’s just one of the conclusions drawn in the latest American Customer Satisfaction Index (ACSI) out of the University of Michigan’s Kellogg School, which focuses on retail. In addition to naming the three top-ranked companies, it also has good news for retail in general and eCommerce in particular. After two years of falling scores, overall retail increased by 0.1 percent, reaching a score of 77.3 out of 100. Half of the categories covered showed no change, but online retail outperformed specialty retail, health and beauty, supermarkets and discount stores. Online retail increased by 1.3 percent to a score of 81, four more points than physical retail, with a much “stronger level of customer satisfaction overall.”

“Don’t be fooled by the stagnation in retail customer satisfaction,” said David VanAmburg, managing director at the American Customer Satisfaction Index. “Customers continue to chase the best, most convenient shopping experience available, and right now online is king. Customers can find what they need more easily and aren’t pestered by salespeople. When you look at online versus brick-and-mortar head-to-head, online wins every time.”

The index analyzes customer satisfaction at more than 400 companies in 46 industries on a quarterly basis. It is based on interviews with 500,000 customers.

Supermarkets ruled this survey. H-E-B, Trader Joe’s and Wegmans all scored an 84, which is high for an individual company. The trio even bested perennial winner Amazon by one point. The survey also found that department stores are stronger online than in-store. Nordstrom (82), Kohl’s (80) and Macy’s (79) all performed better in terms of online customer experience.

It’s no surprise that supermarkets scored well, as the category has been in the lead. Its biggest players, including Walmart and Amazon, have been focused on a seamless experience regardless of where a purchase takes place.

According to the PYMNTS Enterprise Retail Grocery Report, “the ability to have a well-coordinated online and in-store experience was the top influencer for consumers choosing where they should shop and purchase, narrowly beating out personalized offers. Having the ability to scan and pay with phones was the third-most important factor, cited by 16.7 percent of consumers in our sample.”

Although it wasn’t specifically covered in the report, retailers looking to improve their online customer experiences will have to pay close attention to voice commerce. Consumers are using it, but at a lower level than they did in 2018. In fact, voice commerce is attracting a new moniker.

“The trend of moving customer experience beyond the screen has been dubbed ‘conversational customer care.’ It’s still unclear just how many channels are included under this umbrella, or how the future of conversational customer care will look,” said Street Fight Senior Editor Stephanie Miles. “Brands that are dealing with demanding customers can’t afford to sit back and wait for this to play out. Screen-free customer experiences could be the future. They could be just a single touchpoint in the broader context of customer experience strategy. Or, they could just be a passing fad.”

As Amazon continues to make inroads into grocery, the category would be well-served to keep the focus on customer experience. Voice commerce and personalization will be the two key drivers as 2020 becomes the year of customer experience.