The Verde Group, together with LoyaltyOne, partnered with Dr. Deborah Small from the Wharton School of Business to conduct a retail consumer study to assess the financial impact associated with poor customer experiences in the U.S. across key retail formats: Grocery Store, Mass Merchandise, Pharmacy, Department Store, and Specialty Apparel.
The study finds that retailers, in various industries, stand to lose significant revenue by not maximizing their customer interactions. Key insights for retailers are as follows:
- At-risk customers often account for over 10% of potential revenue. This figure is usually higher – the average mass merchant sees 25% of potential revenue at risk. Not addressing these critical experiences jeopardizes current and future spend.
- Retailers miss over 80% of problem occurrences. Even with staff or customer incentives to boost visibility, retailers must delve deeper to discover more than the negative CX that shoppers voluntarily share. For example, “Waiting too long in the check-out line” was cited as a problem impacting loyalty and a “most important problem” for customers of Mass Merchandise, Department Store, and Specialty Apparel retailers. However, it was the Sales Associates’ attitude or behavior (e.g. not being helpful) that was most impactful on loyalty for these particular retailer types.
- Take a customer-value lens to understand problematic experiences. Without customer insights, problems can appear to be equally detrimental even if high-value shoppers are disproportionally experiencing the effects of one issue over another.
- Measure on impact, as the frequency of issues can be deceiving. Some commonly reported problems aren’t as impactful as they appear, while other issues that retailers seldom hear about can be silently eroding valuable customer relationships.
Please click here to download the whitepaper and learn more about the study findings.
Chief Executive Officer, The Verde Group