US consumers are less and less enamored of brick-and-mortar physical retailers but gaining satisfaction with online retailers such as Amazon, according to the new retail report by the American Customer Satisfaction Index.
The news from the survey of 70,000 US customers is especially bad for Walmart, which was named America’s “most-hated” retail brand in the report, and a handful of other stalwart traditional-retail brands. But it’s especially good for Nordstrom.
The researchers noted that “with the exception of internet retail, all retail categories show weakening or flat customer satisfaction” for its latest retail temperature check. Factors cited include higher prices, especially by discounters, while department stores and specialty retailers were relatively unscathed.[more]
Walmart sees no coincidence in its four percent drop in the index, ranking it at the very bottom of all department and discount stores, and the chain’s subpar sales performance of late, featuring its weakest annual growth in five years.
Walmart now ranks even below struggling Sears and still-scuffling JCPenney, though those brands saw a five percent and three percent drop in the index, respectively. Kohl’s also fell, by one percent, while Macy’s rose by three percent.
“Walmart has done more than any other US retailer to make shopping a chore” lately, commented Bill Chidley, partner in ChangeUp, a retail and branding consulting firm.
After decades of driving down prices and curbing inflation, he added, Walmart now is “propelling more of their affluent shoppers to competitors who offer a better experience and adequately low prices.”
Another pundit was quick to articulate why Walmart continues to struggle, even as the US economy picks up a little bit of steam and Walmart remains America’s largest retailer.
Walmart doesn’t always offer the lowest price anymore, and customers know this, Catey Hill wrote on Marketwatch.
Out-of-stock inventory issues continue to plague the retailer, and those frustrating times when items are in-store but mis-shelved. What’s more, shelves are messy, staffers unsmiling, and quality control remains an issue for the world’s biggest retail brand, she added.
It’s also true that decades of criticism of Walmart, its business philosophy, its hiring and promotion practices, its environmental standards, and even the worldview of its founding family have beaten down the image of the chain in the minds of many consumers who might otherwise like to go there.
But that’s only a factor with “the more educated and affluent” Walmart customers, Chidley said, and “not as much … with the core of their shoppers.”
Meanwhile, another troubled retailer, Target, can take some solace from the results: After a tough year or so that saw a huge data breach, a failed foray into Canada and questions about the very core of its brand, Target rose by four percent in the latest ACSI retail index to place only behind Nordstrom, Dillard’s and Kohl’s overall.