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Differentiate with digital

Retail

What Keeps People Shopping

Sucharita Kodali
Sucharita Kodali
Vice President, Principal Analyst
December 17, 2008

Forrester recently released our 2008 Customer Experience Index, a ranking of 114 companies by consumers who responded to an online survey asking how useful, easy to work with and enjoyable the various companies were. Get this, six of the top eight were retailers. The top retailer on the list? Barnes & Noble. So, what does this mean for retailers?

1. A great customer experience is a must-have in brutally-competitive, margin-thin industries that comprise most of the retail landscape.  It is not an option. Not surprisingly, the ten worst performers in the index were TV, wireless and web service providers and health insurance companies–regulated industries that give consumers no choice but to interact with them.

2. A great customer experience is needed just to keep you in the game. Companies like Borders, Toys R Us and Circuit City also scored very well on our list in spite of the fact that they are all in poor financial predicaments. Can you imagine how much worse off these companies would be if they didn’t have a great customer experience? We know that good customer experiences drive loyalty, and those loyal customers are often the ones that keep store traffic robust and inventory moving. A personal example-I was at a local shopping complex this weekend and needed to kill some time. So I went to one of my favorite stores, Barnes & Noble and ended up spending money I hadn’t planned on spending when I first walked into the store. That sort of impulse revenue creation is the direct tie between customer experience and sales. This of course is all the more imperative in an economic downturn.

3. Good customer experiences mean different things for different retailers. Knowing the core attributes of your brand (e.g. low prices, value, quality products, product support, product selection) and then choosing to deliver most aggressively against those factors that matter to customers (and ignoring those factors that do not matter) in a particular retail environment are critical. Let’s take Wal-Mart as an example. Their core value proposition is everyday low prices. So an "enjoyable" experience at Wal-Mart is finding those unbelievably low prices during every visit, not talking to a knowledgeable sales associate or finding deep product selections. Wal-Mart gets what matters most to their shoppers, as do all the best retailers out there.

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