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Retail Customer Service Excellence Pays
The National Retail Federation recently released some of the findings from a survey it commissioned asking more than 9,000 shoppers which retailer they thought provided the best customer service. All retailers were eligible including store, catalog, internet and home shopping. Forty-six retailers were ranked in the survey, which has revealed the top 10 in alphabetical order. Their actual rankings will be made public January 11, 2011, at the annual Retail Industry Luncheon. While customer service is so much more than just a friendly face or voice to make your shopping experience a good one, it's definitely a start.
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Top Publicly Traded Retailers - Customer Service
Online Stores Win Praise
Of the top 10, four only sell their wares online (Amazon.com, Newegg.com, Zappos.com and Overstock.com), which shouldn't come as a surprise considering how convenient they are. Another non-shocker is the fact that five of the remaining six are department store brands. With competitive pressures from specialty retailers, department stores have been forced to pull up their socks and some of their hard work manifests itself in a survey like this one.
For instance, J.C. Penney has created two online websites in partnership with Hearst Magazines that will target women aged 30-to-54 and men 25-to-54. They will be completely separate brands dropping the parent company's name from any of the advertising and marketing. When times were more prosperous, this kind of creativity wasn't necessary. Creativity, however, usually leads to positive long-term results. If you're not busy growing, you're busy dying.
The Best Get Better
Amazon.com has good customer service in part because they've mastered the art of distribution and fulfillment. Again, customer service isn't just a friendly voice at the end of the line but many things from start to finish that leaves the customer satisfied. How many packages do you think Amazon sends each year? My guess would be at least a billion given its annual revenues in 2010 should be approximately $32 billion. And of those billion or more packages, how many are delivered without incident? Whatever the actual number, it's a bunch of happy customers. However, not resting on its laurels, it bought Zappos.com for almost $1 billion in July 2009. Zappos is famous for its customer service so it's not a surprise it's also on the list. Logic dictates that when you own two brands in the hearts, minds and pocketbooks of consumers, you're going to do just fine as long as you continue to execute properly.
Back to the Future
What's the difference between Walmart (NYSE:WMT) and Nordstrom? There's a number of things in my opinion but the two biggest are price and customer experience. At both places, you can buy a wide variety of products. You won't find them cheaper at Nordstrom but you will get a better shopping experience. No offence to Walmart, but any store experience Sam Walton created (that's questionable too) is long since gone. Their motto, "Save Money Live Better" obviously doesn't take into consideration that a good shopping experience is in fact, living better. Not everything in our 24/7 world needs to be disposable.
Department stores were written off in recent years but surveys like this one show they aren't going out without a fight. On the contrary, I see a gradual return to the golden years. Case in point, Lord & Taylor just announced they are opening their first full-line store since 2001 in Yonkers, New York, which will open sometime in 2011. Who says you can't go back?
The Bottom Line
Two things stood out from this year's Thanksgiving weekend bonanza: 1) 28.5% of those who shopped over the holiday did so online; and 2) half of all shoppers visited at least one department store over the four-day holiday, a 13% increase from last year. Reading these, the top 10 list makes perfect sense. (For more, check out Analyzing Retail Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 5 Money-Saving Shopping Tips
Top Publicly Traded Retailers - Customer Service
|
Brand |
Company |
YTD Return |
|
QVC |
Liberty Media Interactive (Nasdaq:LINTA) |
47% |
|
JCPenney |
J.C. Penney (NYSE:JCP) |
28% |
|
Amazon, Zappos |
Amazon.com (Nasdaq:AMZN) |
32% |
|
Overstock |
Overstock.com (Nasdaq:OSTK) |
19% |
|
Nordstrom |
Nordstrom (NYSE:JWN) |
12% |
|
Kohl\'s |
Kohl\'s (NYSE:KSS) |
1% |
|
Land\'s End |
Sears Holdings (Nasdaq:SHLD) |
(17%) |
Online Stores Win Praise
Of the top 10, four only sell their wares online (Amazon.com, Newegg.com, Zappos.com and Overstock.com), which shouldn't come as a surprise considering how convenient they are. Another non-shocker is the fact that five of the remaining six are department store brands. With competitive pressures from specialty retailers, department stores have been forced to pull up their socks and some of their hard work manifests itself in a survey like this one.
The Best Get Better
Amazon.com has good customer service in part because they've mastered the art of distribution and fulfillment. Again, customer service isn't just a friendly voice at the end of the line but many things from start to finish that leaves the customer satisfied. How many packages do you think Amazon sends each year? My guess would be at least a billion given its annual revenues in 2010 should be approximately $32 billion. And of those billion or more packages, how many are delivered without incident? Whatever the actual number, it's a bunch of happy customers. However, not resting on its laurels, it bought Zappos.com for almost $1 billion in July 2009. Zappos is famous for its customer service so it's not a surprise it's also on the list. Logic dictates that when you own two brands in the hearts, minds and pocketbooks of consumers, you're going to do just fine as long as you continue to execute properly.
Back to the Future
What's the difference between Walmart (NYSE:WMT) and Nordstrom? There's a number of things in my opinion but the two biggest are price and customer experience. At both places, you can buy a wide variety of products. You won't find them cheaper at Nordstrom but you will get a better shopping experience. No offence to Walmart, but any store experience Sam Walton created (that's questionable too) is long since gone. Their motto, "Save Money Live Better" obviously doesn't take into consideration that a good shopping experience is in fact, living better. Not everything in our 24/7 world needs to be disposable.
Department stores were written off in recent years but surveys like this one show they aren't going out without a fight. On the contrary, I see a gradual return to the golden years. Case in point, Lord & Taylor just announced they are opening their first full-line store since 2001 in Yonkers, New York, which will open sometime in 2011. Who says you can't go back?
The Bottom Line
Two things stood out from this year's Thanksgiving weekend bonanza: 1) 28.5% of those who shopped over the holiday did so online; and 2) half of all shoppers visited at least one department store over the four-day holiday, a 13% increase from last year. Reading these, the top 10 list makes perfect sense. (For more, check out Analyzing Retail Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Will Ashworth
Will Ashworth lives and works in Toronto, Canada. He's worked in and around the financial services industry for much of his adult life. He loves investing and is passionate about helping others learn how to put their money to work.
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