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The American Customer Satisfaction Index (ACSI) Retail and Consumer Shipping Report 2018-2019 is out, saying that “customer satisfaction with retail is down for the second straight year, as the Retail Trade sector slips 0.9 percent to a score of 77.4 on a scale of 0 to 100 … Among the six categories, gas stations take the biggest hit, falling 2.6 percent to an ACSI score of 74. Although customers prefer online shopping to all other types of retail, even e-commerce shows signs of strain, dropping 2.4 percent in the past year.”

The report maintains that “this widespread deterioration in retail customer satisfaction is due, at least in part, to underwhelming customer service. With low unemployment typically accompanied by greater employee turnover, retailers have to find and train new employees and deal with staff shortages, putting a strain on customer service.”

The ACSI report goes on: “The internet remains the preferred method of shopping for consumers despite falling 2.4 percent to an ACSI score of 80. This decline, however, is not the biggest news to hit the industry, as a new leader takes its place at the front of the pack: Costco, which scores 83 on the ACSI scale.

“Costco is the value leader among online retailers and its Kirkland brand may be part of the reason why, offering quality products at a lower price.

Amazon used to be number one, but fell back a bit; ACSI suggests that its Whole Foods acquisition may have had a negative impact on its customer satisfaction ratings.

The report continues:

“Along with Costco, there are 20 other companies in ACSI’s internet retail category for the first time. Among the debuting companies are Etsy, Kohl’s, Nordstrom, and Nike, which all tie at 81. Target, Macy’s, Wayfair, Apple, and the HP Store come in at the industry average of 80. Dell trails at 79, but Walmart and Sears anchor the bottom of the category at 74 and 73, respectively.

“While customer satisfaction with supermarkets sinks 1.3 percent to an ACSI score of 78, two companies make strides: Trader Joe’s and Wegmans.
Trader Joe’s rises 1 percent to 86, making it number one among supermarkets—and all retailers, including e-commerce. Wegmans’ 1 percent improvement gives it an ACSI score of 85.

“Publix falls 2 percent to tie with Aldi (unchanged) at 84. Costco remains steady with a score of 83, but most other large chains falter. H-E-B slips 1 percent to 82, and Sam’s Club (Walmart) drops 2 percent to 80.”
KC's View:
This is ironic in the view of the fact that one of the messages so-called experts keep sending - I heard a lot of this at the National Grocers Association (NGA) Show - is that retailers have to be relentless in seeking out efficiencies.

I think efficiency is important. But investment also is important, especially these days, as retailers seek new and innovative ways to come to market in a highly competitive climate. And I have to wonder if a focus on efficiency rather than effectiveness may be leading to declining consumer satisfaction numbers.

These are tough times for many retailers. Lots of curves, and it is impossible to know what is around the next one. But I have written here before of my experience learning to drive a race car at the Skip Barber school inn Lime Rock, Connecticut, where one of the lessons was to accelerate into the curves.

For me, there was no more difficult lesson to implement, because it simply ran counter to my instincts. When I couldn’t see what was coming, or was unsure of my ability to control the car, I would either brake or lessen the pressure on the gas pedal. But it is on the curves where you have to know how to take the right line from one point to the next that races are won and lost. And it is on the curves where businesses often set the pattern for success or failure.

The metaphor works another way. If you speed into the curves, you get through the pain of reinventing your business model a lot faster.