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 what executives at luxury retailers around the world are saying about consumer demand.
Early feedback from the Reuters Global Luxury Summit, which gathered top executives from Asia, Europe and the United States, sounds positive. Some executives even predicted that the sector will rebound this year after suffering during the weak economy.
Check out the recent rise in U.S. sales.
U.S. chain store sales rose 3.3 percent last week versus a year ago, according to new data from Redbook. The sales were also up 0.8 percent in May so far versus April, Redbook’s figures on general merchandise retailers with about 9,000 U.S. stores showed.
That’s a bit brighter than the 0.5 percent rise in April same-store sales we saw last week, based on 28 chains.
Check out how the McCafe keeps perking up McDonald’s sales.
Last month, Ronald McDonald and company reported a strong first-quarter profit, showing that their bet on taking on Starbucks on its home turf has paid off. And judging from McDonald’s April sales, that McCafe business — with its expanded lower-priced roster of coffees and new frappes — continues to caffeinate its results.
In April, sales at restaurants open at least 13 months (same-store sales, in the industry’s shorthand) were up 3.8 percent stateside, and did even better overseas, for a global average of 4.9 percent.
Check out the latest retailer to benefit from the earlier Easter and a mild March.
Family Dollar’s profit in the quarter that ended in February came in higher than analysts’ anticipated, as the discounter extended hours at its stores and sold more private label goods, which carry better margins.
Check out the higher sales at Walgreen stores open at least a year.
The largest U.S. drugstore chain said March sales at locations open at least a year rose 2.3 percent thanks to an earlier Easter holiday that drove demand for candy and other merchandise. Walgreen also said an extra weekday boosted sales of prescription medications.
March 2010 had an extra weekday and one less weekend than the previous year, and consumers tend to fill more prescriptions on weekdays.
Check out McDonald’s overseas boost.
February sales at McDonald’s restaurants open at least 13 months rose 4.8 percent, even though such sales rose just 0.6 percent in the United States.
The world’s biggest hamburger chain attributed some of the gain to Chinese New Year celebrations. Same-store sales jumped 10.5 percent in the Asia/Pacific, Middle East and Africa (APMEA) region.
There is always something getting in the way of rising sales. In the United States, retailers blamed record-setting snow on the East Coast for curbing a spike in February sales
Check out the return of the shopper. Even at Abercrombie & Fitch.
Several U.S. retailers showed off strong sales gains — albeit over an ugly February 2009 — despite the winter storms that bashed the Northeast, mid-Atlantic and other parts of the United States.
It’s too early to declare a major rebound yet, analysts said, but the sales gains signal that consumers are heading back to stores for more than just the essentials these days.
Check out the holiday sales results from Best Buy.
The top U.S. consumer electronics chain said its December same-store sales rose 8.2 percent, recovering from last year’s 6.5 percent drop.
The company attributed the gains to strong demand for notebook computers and mobile phones, and said it believes its domestic segment continued to “experience strong market share gains” for the month ended Nov. 30.