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.


Is it fair to take shots at a service when its free?

The American Customer Satisfaction Indexreleased its first-ever social media satisfaction scores last week, and Facebook has taken some heat for finishing with a 64% satisfaction rating. Traditional news outlets and social media sites such as Twitter were ablaze with commentary about Facebook's relative poor showing.  (Interestingly, Twitter was not rated in the index.) 

I understand the desire to rate companies when people are paying for their products and services, but what about companies like Facebook whose service is free?  Shouldn't we expect less than amazing service since it's free?  And, are we really customers since it's FREE? It strikes me as odd that Facebook faces so much criticism since, ahem, IT'S FREE!

OK, I guess there are a couple of sides to this.

On one hand, it's natural for us to expect a lot out of an organization as influential as Facebook. Certainly, they've taken notice of all this discussion and will work to improve their perceived level of service in the future as part of their growth strategy.

On the other hand, there should be a limit to what people expect from a free service. We're not forced to use Facebook. I even know several normal, well-adjusted people with active social lives who don't even have Facebook accounts! (Which reminds me, I don't know what they've been up to lately.)

Perhaps as a middle ground we should reserve the right to offer constructive criticism while tempering the amount of expectations we place on a free service. So, the next time you have a gripe about Facebook (or Gmail, Yahoo, or Twitter for that matter), just remember that you get what you pay for.

 

Human interaction hurts service scores in 2009 Q4 ACSI report

The 2009 4th Quarter American Customer Satisfaction Index scores were released today and the big winners were internet retailers that required very little, if any, interaction with a human being. (Ouch!) The average score for online retailers was 83% compared to a 75% average customer satisfaction rating for 'Big Box' discount retailers and department stores. Clearly, U.S. companies as a whole are not doing a good job of person to person customer service.

Internet retailers do well

Source: American Customer Satisfaction Index

Netflix, the online video rental company, had the highest score among retailers included in the report with an 87% customer satisfaction rating.  I've been a loyal Netflix customer for several years and would rate their 'service' very highly, but I don't think I've ever interacted with a single Netflix employee. The many attributes I like include their convenient and speedy service, large library of video titles, and on-demand viewing capability.

 

Big box stores - not so much...

Source: American Customer Satisfaction Index

I have consistently been frustrated by poor service when I've tried to shop at many large retailers like Macy's. They have many opportunities to assist customers and increase sales, but most employees I encounter are content with ringing up purchases and handling stock. Of course, you can always count on someone at Macy's asking if you'd like to open up a Macy's card. They do do that.

What's the fix?

If the new CBS show, Undercover Boss is any indicator, corporate executives need to get out of their offices and manage from ground level. I suppose you can lead from behind a desk when all your service is delivered online, but you can't be completely hands-off with a retail store. Employees need training, coaching, and motivation. They also need to be held accountable. And, you need to make sure you are hiring the right employees in the first place. None of this can be managed via email or through a spreadsheet.