Retail Benchmark: What Customers Are Telling You
Benchmark studies are interesting animals. The primary take-away most brands look for are the ranking to find out where they sit on the competitive battlefield, and especially how they’re faring in the blood feuds against their chief nemeses.
Pearl-Plaza recently completed its 2015 Retail Benchmark Study, which contained a high-level view of the competitive landscape (those brands that are winning and those that are losing in the customer experience space). We also discovered a few additional findings that take us deeper into the minds and hearts of the buying public in this continually evolving Age of the Customer.
First, a little bit about our methodology: Pearl-Plaza maintains a healthy panel of North American consumers. For this study, we received feedback from more than 20,000 of them about how they felt about the top 100 retail brands. We weighted the sample to reflect the most current census distributions. We also measured the data against our proprietary Pearl-Plaza Index of Customer Experience (InCX), a new metric that combines Overall Satisfaction, Likely to Revisit and Likely to Recommend rankings. For this study, we asked consumers about their in-store experiences only.
Following are the top five insights uncovered by our study:
#1: Putting Their Money Where Their Mouths Are
This is the inaugural benchmark study for our new InCX Index, and it synched up nicely with our original hypothesis: Brands that scored in the top box for Overall Satisfaction and Likely to Recommend also scored the highest percentage—72—in Likely to Revisit. On the other hand, the brands that ranked in the bottom tier in OSAT and Likely to Recommend registered just 10 percent on the Likely to Revisit question. To sum it up: If customers are happy enough to recommend you to their friends, you can bet they’ll be back.
#2: Following the Crowd
Brands within the same segments tend to have similar strengths and weaknesses. For example, most Big Box stores excel at having products on hand, but not so great at staff availability. Shoe retailers score high on the quality of their products and services but can’t seem to stay well stocked.
#3: Friendliness Doesn’t Matter, Except When It Does
Friendliness is almost universally accepted as a critical metric for all consumer brands. However, our study found that high marks in Staff Friendliness did not tend to impact customer’s overall satisfaction, their willingness to recommend, or their likelihood to return. On the other hand, retailers that scored low on this metric got pummeled. Why? Because the customer experience bar has risen. Consumers view Friendliness as a hygiene factor. You won’t get extra points for doing it well, but your brand will suffer if you can’t get this very basic element right.
#4: Venus vs. Mars
When it comes to retail, gender—apparently—does matter. For example, men have much stronger opinions about store atmosphere than women, voicing both approval and disapproval much more frequently and strongly than women. When it comes to Big Box stores, women care a lot about products being in stock, while men care most about store layout. As much as we would like data to support our assumptions that there are no differences in the attitudes of male and female consumers, we find common themes within genders—males and females do seem to be from different planets when it comes to what makes them want to refer and revisit.
#5: Value Ain’t What It Used to Be
When we used to ask customers about value, the most common understanding of that word had to do with perceived fairness in what they received for what they paid. Over the years, “value” has come to mean much more than a simple exchange of goods or services and money. Our Retail Benchmark study found that brands with the highest ratings in variety and selection also performed better overall. On the other end of the spectrum, not having staff available erodes value perception.
Wrapping It Up
While brands tease out individual elements of the Customer Experience into discrete parts with names like Staff Interaction, Product in Stock, and Store Atmosphere, consumers do not. Each element—as well as every interaction customers have with retail brands (from the direct market messages we send to the visual impact of a store to the greetings they receive to the ease of paying—is a piece of the experience mosaic.
Depending on which segment you’re in, and which customer demographic you want to please, these pieces may be weighted differently. The key is in understanding your customers, what they expect, what they love, and what you give them that no other brand can. Simply scoring high on the individual parts of the Customer Experience helps, but unless brands are willing to understand that their relationships with consumers are much larger than the sum of their parts, they will remain in the middle of the pack.
The great brands of today and into the future will understand how they’re doing against their direct competitors, but they’ll spend most of their time understanding how and why their customers feel the way they do.
