What Keeps People Shopping

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.

Comments

re: What Keeps People Shopping

Regarding your third point, I think the core attribute of the Forrester brand is providing research and analysis that's incisive, thoroughly backgrounded and noteworthy. This blog posting about what keeps people shopping is not delivering on that brand promise. It appears to be more about mentioning Forrester clients by name than about providing some unique perspective on eCommerce. Sometimes, you need to eat your own dog food, Sucharita :)

re: What Keeps People Shopping

The job of an analyst includes being educated and aware of market conditions their clients are facing. The best analysts are an extension of the strategic team at a company. I think Sucharita is on the ball with this one. The more an analyst (internal or external) prods and pokes at topics that are often ignored, real business change can happen. Analysts are not only about synthesizing client surveys.

re: What Keeps People Shopping

Thanks Jason. My quick thoughts for others who may be confused by my point: On a list of more than 100 companies, retailers clustered at the top, a finding interesting in itself. Even more interesting is that many of the companies listed aren’t doing that well financially. Does that mean focusing on customer experience is misguided or a waste of money? In an economy like this one, some people may think so. But then, a retailer just risks accelerating its own personal downturn.As a side note to the first comment, I wish everyone I listed was a Forrester client but unfortunately they’re not. Our blog's objective is to engage in the conversation around eCommerce and multichannel retail, and to provide a perspective of our research and point of view to both clients and other interested businesspeople.