ACSI Report Reveals Three Focus Areas for Retailers

There's good and bad news for retail customer service.

In February, the American Customer Satisfaction Index (ACSI) released its 2017 retail report that tracks customer service trends in several retail industries such as department stores, supermarkets, and health and personal care stores.

The good news is some retailers are providing excellent customer service. Publix, a company I profiled in The Service Culture Handbook, was the highest rated retailer overall.

The bad news is some major retailers are struggling with customer service, particularly in the specialty retail and department store categories.

Here's an analysis of what's driving those ratings along with a sample competitive analysis of three popular drug stores: Rite Aid, Walgreens, and CVS.

 Exterior view of a CVS drugstore.

Driver #1: Location

I once asked the CEO of a credit union I was working with to describe the one thing he wanted to do to improve service. Without hesitation, he replied, "Add more locations."

Convenient locations are incredibly important to retail. Customers need to be able to visit your location with minimal effort. Convenience also includes how easy the store is to get in and out of, such as parking or accessible entrances.

In my drugstore comparison, I selected three competing drug stores that are all located with a half mile of each other in San Diego. 

Rite Aid: This store was situated in a large parking lot with plenty of spaces. The parking lot had multiple entrances from three streets.

Walgreens: Like Rite Aid, this location was easily accessible from a parking lot that had multiple entrances from two streets. There was plenty of parking, but it was a little less convenient due to one-way routing around multiple medians.

CVS: Easily accessible with a large parking lot and plenty of spaces. The parking lot has multiple entrances from two streets.

The locations for all three stores were virtually identical, so it's probably a tie in this case.

 

Driver #2: Cleanliness and Layout

The customer service vision at Publix is, "Where shopping is a pleasure." Visit a Publix supermarket and you can see the stores have been designed with this vision in mind. 

They stores clean and neatly organized. Aisles are wider than a typical supermarket, making it easier for shoppers to pass each other with loaded carts. There are even helpful signs in the produce section that provide advice on selecting and storing various fruits and vegetables.

In my drugstore comparison, I decided to look for the same list of toiletries: deodorant, suntan lotion, hair gel, and a travel toothbrush. This time, my experience was different from store to store.

Rite Aid was modern-looking and well-laid out with excellent signage. The different colored flooring created a neater look and the visual contrast also seemed to make it easier to find my way around the store. There was also a Thrifty Ice Cream counter, which brought back some fond childhood memories. (Note to self: must go back for a cone.)

There are a few negatives. Some items were piled too high on top of the aisles, which made it difficult to see parts of the store. And the deodorant was oddly locked in a case, which meant buying some required assistance from an associate. (More on that in a moment.)

 Inside a Rite Aid drugstore.

Walgreens was clean, though the white linoleum floors looked out-of-date compared to the Rite Aid.

 Inside a Walgreens drugstore

One odd piece was the signage did not match the product selection in several places, which made it more difficult to find what I was looking for. The men's hair care section was on a completely different aisle.

 Men's hair care sign hung over the shaving section.

CVS had the largest store of the three. Despite it's size, an open layout and helpful signage made it easy to navigate throughout the store. One small tweak that stood out was the omni-directional aisle signs, so they were easy to see from multiple angles.

 Inside a CVS drugstore.

Driver #3: Courtesy and Helpfulness of Staff

Employees can make or break a retail experience. The right people can create a positive customer service experience, which in turn drives sales.

Apple is consistently the retail leader in sales per square foot. One secret to the company's success is employees who help customers confidently select the right products. I've managed to get fast, friendly, and helpful service even on days when the store appeared to be packed with customers.

The flip side of this equation is also true. Having the wrong people, or too many, can cost a business money. This is why retailers should consistently evaluate staffing levels and hours of operation.

There were some contrasts in my drugstore comparison.

Rite Aid had one cashier on duty. I had to wait less than a minute for assistance. She was friendly, albeit transactional. I did not encounter any associates on the sales floor, which was too bad because I was having trouble finding hair gel and would have needed someone to unlock the deodorant. There was also no one who greeted me when I entered the store.

Walgreens also had one cashier on duty. Like Rite Aid, this cashier was friendly and transactional. Also like Rite Aid, I didn't encounter any associates on the sales floor and nobody greeted me as I entered the store.

CVS stood out in three ways. First, the cashier gave me a friendly greeting as I entered the store, despite being busy with customers. Second, an associate greeted me while I was browsing and offered me assistance. And third, I witnessed the single cashier patiently help an elderly customer remove her purchase from the package after she mentioned she had trouble with it. I appreciated this extra kindness, even though it meant I had to wait an extra minute.

 

Conclusion

CVS is the clear winner in my mini-comparison. 

The locations are all similar, so these companies will compete on other factors. The store design at CVS made it easiest to find the items on my shopping list. Friendly employees made me feel welcome and were also available to help me find something if necessary.

Notice price isn't mentioned in this comparison. The prices at each store were similar and the reality is I could get better prices for everything online without having to drive to a store.

These physical retail stores need to offer something beyond good prices to attract and keep customers. In today's world, a generic, transactional retail experience won't cut it.