Retail Customer Service: Perception vs. Reality

Mounting evidence points to the need for sensitivity and personalization for individual customers, as organizations seek to maximize existing customer service interactions.
Customer Service

With competition growing increasingly fierce, companies in the retail industry must put forth added effort to encourage customer loyalty by strengthening satisfaction through customer service. Yet, while many brands believe their current actions are conducive to cultivating advocacy and retention throughout their consumer bases, not all customers are "feeling the love" from their favorite retailers.

As KANA's recent "Consumers Sound Off on Customer Service in the Retail Sector" report reveals, today's empowered customers have a very low tolerance for poor customer service, while other consumers crave an intimate relationship that reflects the retailer's awareness of their needs and preferences. The study, which canvassed 106 adult consumers across all age groups, explores how consumers perceive customer service throughout various sectors of the retail space. In addition, the study also provides insight into the traits most claim are critical for retention. Overall, respondents agree that the most important things any retailer can do to maintain customer loyalty are to value the consumer's time, listen and respond to their queries accordingly, exercise care and attention, and offer knowledgeable service agents.

The following statistics reflect how shoppers prefer to engage with retailers, their true perception of the average service experience, and the primary issues threatening customer retention today:

  • Customers tend to favor more personalized interactive channels, with most gravitating toward Web (24.5 percent) and email (17.9 percent). By contrast, customers are least likely to opt for video chat (30.2 percent) or phone (22.6 percent) when engaging with retailers.
  • When asked to rate their perceived overall quality of customer service received on a scale of 1-10, with 1 being poor and 10 being exceptional, more than 60 percent of those surveyed ranked retailer efforts at 7 or higher.
  • On a scale of 1-10, with 1 being least customer service oriented and 10 being most customer service oriented, 54.9 percent of respondents believe Apparel and Accessories retailers provide the best customer service, while Consumer Electronics/Telecommunications (28.3 percent) and Automotive (18.9 percent) ranked lowest.
  • Customers are most likely to discontinue doing business with Automotive (58.5 percent), Furniture and Furnishings (56.6 percent), and Consumer Electronics/Telecommunications (50 percent) companies following a poor or disappointing customer experience.
  • Customers are least likely to discontinue doing business with Apparel and Accessories (21.7 percent), Pharmacy/Drug and Convenience Stores (17 percent), and Automotive (15.1 percent) retailers after a poor or disappointing customer experience.
  • When comparing customer service during online versus in-store shopping, 40.5 percent of respondents agreed that their online experience was better, 33 percent believe both experiences were on the same level, 18 percent said in-store customer service was superior, and 8.5 percent were neutral.
  • However, more than one-third of those polled reported experiencing customer service issues related to different business policies and procedures for online versus in-store customer service, highlighting the importance of developing an omnichannel strategy that promotes consistency.

Key takeaway: While many customers desire sophisticated marketing efforts that put tailored, relevant information directly in the palm of their hand, others prefer to be left alone, as such communications are often perceived as intrusive and annoying. Retailers must work to develop balanced strategies that deliver relevant offers only when consumer needs arise. By introducing this level of personalization, brands can actively sustain loyalty and retention by limiting outreach to only those instances when customers are most likely to engage. Retailers must remain keenly aware of technology's emerging role in the customer service space, as well, for such advancements help address the majority of consumers' concerns. Technology also empowers service representatives to deliver improved efficiency and reduced wait times, consequently boosting employee engagement so agents may provide continuously consistent, superior support online and in-store.