Customer satisfaction getting worse among large retailers

aw do we have to?The American Customer Satisfaction Index (ACSI) shows customer satisfaction dropping to a level on par with the recession of 2008. The ACSI scores organizations on a 1 to 100 national level in ten economic sectors, rating 45 industries and over 225 companies including e-commerce and e-business.

According to statistics, all economic sectors were down, but large companies still have the definitive edge simply because they can offer lower prices than their smaller competition. For instance, Barnes and Noble can not compete with Amazon. As an example, just by mere marketing and price competition the Kindle far outsells the Nook. Brick and mortar establishments get trumped by online companies because of wider selections, easier access, and lower prices.

So why do we think that customer satisfaction is on the downward slide? As business slows up, many companies are laying off full-time staff and replacing them with part-time workers. This cuts down on the overhead; no more expensive medical or life insurance coverage required, pensions, paid holidays or high salaries. Replaced by minimum wage earners who have little expertise as compared to the wealth of knowledge now forced to retire or face unemployment lines, customer service equally takes a nose dive. It goes back to the close interrelationship of employees with managers and all departments. Once morale is corrupted by notices of lay-offs and salary cuts, “cheap becomes expensive.”

Just concentrating today on retail, here is a summary of a few of the top contenders. Newegg, who used to lead the Internet retail customer satisfaction index in 2008 now lags behind Amazon and Netflix. Their drop is blamed on Newegg spreading themselves thinner with more products. Target, Walmart, and Sears – known for their low prices and no frills have fallen below Nordstrom. Even though Nordstrom has higher prices, their commitment to their personalized service is paying off.

Interestingly enough, discount stores like TJMaxx and Marshalls are scoring lower for customer satisfaction, and experts attribute that to their lack of an online presence. Young consumers are online shoppers. And in the retail grocery world, Publix and Whole Foods did better than SuperValu. Agricultural commodities continue to drive prices up, and the smaller stores can not compete.

So what is or isn’t good about all of this? For large companies as the sharks eat the little fish, there is bound to be less competition. That  changes the playing field, because without competition retailers can cut services to customers as options become limited. Let us hope that customer satisfaction doesn’t go the way of the dinosaur.

photo credit: ernop