Report Ranks Retailers by Shopper Satisfaction
With inflation continuing to threaten discretionary spending, 39% of shoppers said they will begin holiday shopping earlier than usual this year, according to research from the National Retail Federation (NRF). The American Customer Satisfaction Index’s (ACSI) “Retail Holiday Preview” cites the obvious reason for this: consumers can spread their shopping out to cover their holiday costs.
As consumers prepare to be more intentional with their purchases, some retailers appear particularly well-positioned to tackle this challenge, according to the ACSI Retail Holiday Preview, published Nov. 2. Perhaps most of all, Amazon and Chewy.
“Customer satisfaction will be even more important as retailers compete for the more carefully allocated holiday purchases of price-sensitive consumers,” Forrest Morgeson, associate professor of marketing at Michigan State University and director of research emeritus at the ACSI, said in a media release. “Retailers that offer sales and promotions early this year may earn more dollars from consumers who are looking to spread out their holiday spending. Whichever brands can meet the needs of their customers in this uncertain economy will have superior customer satisfaction this holiday season.”
Macy’s, Costco Lead General Merchandise Category; Target Close Behind
Year to date, customer satisfaction with general merchandise retailers scores 77 on ACSI’s 100-point scale, outpacing last year’s performance. Discounting appears to be driving that trend, per ACSI.
Top performers include:
- Department stores: Macy’s (82)
- Discount stores: TJX (i.e, Marshalls, TJ Maxx) (80)
- Hypermarkets: Target (81)
- Warehouse clubs: Costco (82)
Macy’s, which significantly slashed the price of spring goods to account for consumer spending cuts this year, saw its customer satisfaction buoyed by these discounts, per the release. Compared to other general merchandise retailers, the department store chain scored highest marks for sales and promotions.
Meanwhile, ACSI says Target has benefited from consumers’ deviation from discretionary shopping to spending more on essentials such as personal care and household products. This strategy has also paid dividends for Costco, where membership has risen, which ACSI says is due in large part to cheap gas and strong grocery sales, strengthening the retailer’s ACSI score.
TJX is offering more premium merchandise at a time when high-end retailers are struggling with inventory. Even with the state of the economy, shoppers are scooping up these goods.
Amazon, Chewy Fight for Top Online Retailer Spot
As online retailers prepare for a busy fourth quarter, which is expected to grow 4.8% year over year despite lingering inflation, according to a recent report from Adobe Analytics, the industry maintains its 2023 ACSI score of 80. ACSI’s top online retailers include:
- Apparel and shoes: Nike, Nordstrom (80)
- Home improvement and decor: BedBathandBeyond.com (81)
- Multimarket: Amazon (83)
- Specialty: Chewy (83)
- Technology and office: HP Store (82)
At an ACSI score of 83, Amazon and Chewy rank the highest for customer satisfaction among all retailers going into the holiday season.
Trailing the individual segment winners, several other online retailers score well in the 80s:
- HP Store and Etsy each pull in an 82;
- Dell, Staples and Costco score 81; and
- eBay and Groupon enter the holidays with an ACSI score of 80.
There is also a narrowing satisfaction gap at the brand level, per the release. In ACSI’s 2023 retail report, the highest and lowest online retailers were separated by 16 points. That margin has been halved year to date, down to just 8 points.
Specialty Retailers Satisfaction Ranking
As of September, customer satisfaction with specialty retailers, specifically the brick-and-mortar shopping experience, stands at a score of 80. Category winners include:
- Apparel: American Eagle Outfitters (81)
- Automotive: O’Reilly Auto Parts (82)
- Hardware and home improvement: Ace Hardware, Tractor Supply Company (82)
- Hobby and home: Hobby Lobby (81)
- Personal care and accessories: Bath & Body Works, Sephora (81)
- Pet care: Pet Supplies Plus (82)
- Sporting goods and sports apparel: Bass Pro Shops (80)
- Technology and office: Apple Store (81)
Category “co-leaders” Tractor Supply Company (a newcomer to the ACSI) and Ace Hardware each score well on staff courtesy and helpfulness, which ACSI believes will be important for them to maintain as high interest rates threaten to delay homeowners from pursuing further home renovations.
Apple Store’s reputation for providing great in-person customer experiences has buoyed its customer satisfaction so far this year. This, as well as shoppers’ desire to get their hands on the new iPhone 15, should work in its favor this holiday season, per the release.
Despite decreasing since ACSI’s last retail report, American Eagle Outfitters outpaces other specialty apparel stores. The retailer has apparently managed inventory better, enabling it to be more responsive to style changes without relying on discounted prices to succeed.
While not leaders in their segments, a few other specialty retailers were recognized for meeting ACSI’s industry average score of 80: AutoZone, Home Depot, Menards, Ulta Beauty and PetSmart.
Methodology
The American Customer Satisfaction Index Retail Holiday Preview is based on interviews with 22,541 customers from January to September 2023.
The ACSI is a performance indicator that measures and analyzes customer satisfaction with more than 400 companies in over 40 industries and 10 economic sectors. Reported on a scale of 0 to 100, scores are based on data from interviews with roughly 500,000 customers annually.