Retailers, consumers and prices
Check out an American Express survey that shows that quality service matters more than ever, suggesting U.S. retailers may want to start sucking up to recession-wary consumers even more.
Sixty-one percent of Americans polled said quality customer service is more important in today’s tough economy and that they will spend an average of 9 percent more when they think a company is providing that. Important points when some analysts and investors worry the economy may be at risk of dipping back into recession.
In a disconnect, however, many businesses seem to be missing the message as 28 percent of those polled believe that companies are paying less attention to good service and 27 percent have not changed their attitudes, according to the American Express Global Customer Service Barometer (which sounds like a weather vane for customer service).
“Customers want and expect superior service,” AmEx executive vice president Jim Bush said in a statement. “Especially in this tight economic environment, consumers are focused on getting good value for their money. ”
“Many consumers say companies haven’t done enough to improve their approach to service in this economy, and yet it’s clear they’re willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right,” he added.
Retailers might want to keep all that in mind given the fact that June same-store sales came in slightly below expectations and some analysts see the sector treading water.
The survey was conducted in the United States and 11 other countries.
In the United States, nine in 10 of those surveyed consider the level of service important when deciding to do business with a company, the survey said. However, only 24 percent believe companies value their business and will go the extra mile to keep it.
Contrary to “conventional wisdom,” the survey showed more are inclined to talk about a positive experience (75 percent) than complain about a negative one (59 percent).
And consumers said they are far more likely to give a company offering good service repeat business (81 percent) than they are to never do business with a company again after a poor experience (52 percent), according to the poll.
However, negative feedback online weighs more heavily as almost half of consumers gather others’ opinions about a company’s customer service reputation and they put greater credence in negative reviews (57 percent) versus positive ones (48 percent), according to AmEx.
“Because consumers can broadcast their views so widely online, each and every service interaction a company has with its customers becomes even more crucial,” Bush said. “Developing relationships with customers, listening to them, anticipating their needs, and resolving any issues quickly and courteously can help make the difference.”
In fact, 81 percent of Americans have decided never to do business with a company again because of poor customer service in the past, the poll said. Half of those surveyed said it takes two poor service experiences before they stop doing business with a company.
However, 86 percent will give a company a second chance after a bad experience if they have historically had great service before, according to the poll.
Woe to those who screw the experience up too, as 52 percent of consumers expect something in return after poor service beyond just resolving the problem. Seventy percent want an apology or some form of reimbursement.
So retailers, I expect red carpet treatment and a lot of sucking up this recession or you won’t get any of my limited funds!
Also in the basket:
Study: Living Near Restaurants Makes You Fat (Wall Street Journal)
Industry Places Bets on back-to-School (WWD, subscription required)
Check out the renovations being planned by U.S. homeowners this year.
According to an American Express Spending & Saving Tracker poll, 62 percent of homeowners plan to tackle remodeling and renovation projects in 2010 to improve their home’s appearance and value (the top two motivators, respectively). However, many (53 percent) also believe a return to a seller’s market in real estate is not expected for two or more years.
Even with the soft housing market, 85 percent of homeowners consider their home as their most valuable asset and will spend an average of $6,200 to enhance it, according to the monthly study.
Check out a prediction for increased U.S. retail sales this year.
The National Retail Federation said U.S. retail sales should rise 2.5 percent this year, signaling that stores have made it through the worst of the downturn as improvements in the housing and job markets bolster shoppers’ confidence.
The projected increase would be a step up from a 2.5 percent decline last year and 1.3 percent increase in 2008, NRF said.
American Express found that 10 percent of consumers actually expect to spend more on holiday gifts versus last year, while 43 percent plan to spend about the same as they did in 2008.
The third monthly online American Express Spending & Saving Tracker asked 2,011 adults about the economy, what they plan to spend on and what motivates them to spend or save.
When given the choice, only 13 percent said they have a “gloomy” attitude going into the holiday season, while 41 percent said they were “joyful.”
Most were feeling a bit generous, with 63 percent planning on some type of charitable giving over the holidays, even though 54 percent said that they would be cutting back on how many gifts they buy due to the economy.
Check out a survey showing that younger U.S. consumers are trimming travel plans as well as turkeys during Thanksgiving.
More young professionals (37 percent) are adjusting their Thanksgiving travel and spending plans than the affluent and general population (both 30 percent), according to a survey by American Express. Young professionals are defined as less than 30 years old, having a college degree and a minimum annual household income of $50,000.
The young guns also are pulling back in other areas:
* 11 percent of young professionals plan to drive instead of flying, compared to 7 percent of the general population and 6 percent of the affluent, who are defined as having a minimum annual household income of $100,000.
* 8 percent of young pros plan to shorten their stay for the Thanksgiving holiday weekend, compared to the affluent and general population (both 3 percent).
* 7 percent of young pros will use rewards points, miles and special offers to offset the cost, versus 4 percent of the affluent and 3 percent of the general population.
Overall, American Express found 30 percent of U.S. consumers plan to adjust this year’s travel plans for Thanksgiving — historically one of the busiest travel days of the year — but only 21 percent expect those expenses to decline from last year.
Those who are changing their plans said they will rely more on travel by car, stay for a shorter time and cash in rewards to help pay for holiday trips as they become more selective amid the high unemployment and soft housing market.
However, in a positive sign, sales at U.S. retailers excluding vehicle sales rose for the second straight month in September, raising cautious optimism consumer spending could support the economic recovery.
The American Express survey also showed that the young professionals are cutting back for Halloween, when consumers spent $5.8 billion last year according to the National Retail Federation.
* 36 percent of young pros are buying less expensive costumes and decorations. The rate is 16 percent among the affluent group and 15 percent among the general population.
Remember a couple of years ago, when it was discovered that an executive used his corporate American Express card to pay for $241,000 worth of "services" at a New York-based "gentleman's club" then tried to stiff AmEx on paying the bill?
How might someone explain a $241,000 charge on his or her statement, to his or her boss (or his or her spouse, for that matter)when it gets sent to the home office -- or worse, the home -- at the end of the month?
Fashionistas do flock together, but one bird always stands out at New York Fashion Week – often because she’s wearing a crown of black ostrich feathers that she made herself.
Rosemary Ponzo, a New York stylist and hat designer for movies and TV shows, attracts photographers from her perch on or near the front row of designers’ shows in the Bryant Park tents. Just before the start of the show by the Academy of Art University in San Francisco, Ponzo talked with Reuters about her favorite designers, Comme des Garcons and Junya Watanabe.
Worried about the safety of your personal information? On second thought, maybe you’re not — if you shop with your American Express card, surf eBay or use an IBM system.
Those three companies are consumers’ picks for the top most trusted when it comes to protecting their customers’ privacy, according to a survey by TRUSTe, a consumer privacy protection organization, and the Ponemon Institute, an independent research group.
Consumers reported that identity theft is the No. 1 factor influencing their view of how companies handle privacy concerns, with only 45 percent of respondents saying they felt they had control over how their personal information was used or shared. That’s down from 56 percent two years ago.
The worries over data security are real — companies from discount retailer TJX Cos to Bank of New York Mellon Corp have had major data breaches compromising the personal information of millions of consumers.
The top ten list is rounded out by Amazon.com, Johnson & Johnson, the U.S. Postal Service (which shares the No. 6 spot with Hewlett Packard), Procter & Gamble, Apple, Nationwide, and Charles Schwab.
The survey, now in its fifth year, polled nearly 6,500 U.S. adults to determine their view of the most trustworthy companies and brands when it comes to protecting personal information.
Companies including Disney, AOL and Dell made it to the top 20 list, with Yahoo, FedEx, Facebook and Verizon joining that group for the first time since 2004, when the Ponemon Institute began conducting research on the topic. It was also the first time for Apple, at No 8.