Company News • 07.09.2015

Poor customer service puts back-to-school revenue at risk

Shoppers for households with kids under 18 are 19% more likely to be annoyed when retailers make insufficient information available

Poor customer service puts back-to-school revenue at risk...
Source: LoyaltyOne

The latest LoyaltyOne, Verde Group research suggests that mass merchandisers should go back to school for a refresher course in securing repeat business from consumers who shop for households with children under 18.

A nationwide survey of 2,500 U.S. consumers shows that efficient service, more so than price or product availability, is the stronger driver of store loyalty and repeat purchase decisions for shoppers at mass merchandise stores such as Walmart, Target and Staples. Retailers should take note of the findings as the average American family with children in grades K-12 plan to spend $630.36 on electronics, apparel and other school needs, down from $669.28 last year, according to the National Retail Federation’s Back-to-School Spending Survey for 2015.

With families spending less on back-to-school shopping, it is even more important retailers identify poor customer touch points to proactively design experiences that positively capture spend, visit frequency and increase basket size. [Mass merchandisers should go back to school for a refresher course]

Here are key numbers from the joint LoyaltyOne, Verde research on retail revenue at risk from a poor customer experience:

  • Shoppers for kids-under-18 households were 19% more likely than the general population to say that not having enough information available near a displayed item detracted from their shopping experience.
  • These same respondents spend $530/quarter more in the mass merchant category than the general population.
  • Shoppers for kids-under-18 households were 39% more likely than the general population to say their shopping experience was compromised when sales associates had a ‘not my department’ attitude.
  • These same respondents spend $183/quarter more in the mass merchant category than the general population.  
  • Shoppers for kids-under-18 households were 65% more likely than the general population to say that waiting too long in a checkout line detracted from their shopping experience.
  • These same respondents spend $168/quarter more in the mass merchant category than the general population.
  • Shoppers for kids-under-18 households were 57% more likely than the general population to say waiting too long to be served detracted from their shopping experience.
  • These same respondents spend $63/quarter more in the mass merchant category than the general population.

 “In today’s hyper-competitive marketplace, customer experience has assumed a major role as a key business differentiator. With families expecting to spend less this year during the back-to-school shopping period than last year, there’s a growing need to for retailers, particularly mass merchants, to address gaps in the customer experience to best capture consumer spend,” says LoyaltyOne Consulting Vice President Dennis Armbruster said.

 “Understanding the  negative impact of problem experiences on consumer spend is critical for retailers. These insights can help retailers identify the customer touch points that most impact back-to-school shoppers and proactively address them to protect consumer loyalty during the back half of the year,” says Paula Courtney, President of Verde Group.

The research results further reveal that convenience is key for shoppers with children in their household. With insufficient information and long lineups at checkout topping the list for high-risk touch points in the customer experience, the sales associate's attitude had a low impact on loyalty for this segment:

  • Shoppers for kids-under-18 households were 26% less likely than the general population to say that a sales associate not appreciating their business detracted from their shopping experience.
  • Shoppers for kids-under-18 households were 11% less likely than the general population to say that a sales associate not treating them with courtesy detracted from their shopping experience.

Source: LoyaltyOne

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