Customers rank Wal-Mart worst in patron service

Experts say low-price draw can offset bad experience

Sunday, March 9, 2014

What Wal-Mart Stores Inc. provides in the form of low price and access, it lacks in customer satisfaction.

A survey of 11,500 customers conducted for the 2013 American Customer Satisfaction Index Retail Report showed Bentonville based Wal-Mart scored the lowest among retailers in the country in terms of customer satisfaction.

The global retail giant scored 71 out of a possible 100 for last year, the same as 2012. In fact, the company has hovered between 68 and 73 over the last decade.

Customer satisfaction in the overall retail industry was 77.9, a 1.7 percent climb - “marking the third straight year of improvement for the sector,” researchers wrote. Nordstrom scored the highest with 83, and Wal-Mart competitors Target and Dollar General scored 77 and 80, respectively.

In the overall retail category, well-known companies such as Walgreen Co., Macy’s Inc., Gap Inc., Safeway Inc., CVS Caremark Corp., and Best Buy Co. Inc., also fell into the group of 10 retailers with the worst customer service. The other three were Winn-Dixie supermarket chain, retailer Supervalu and Rite-Aid pharmacies.

Wal-Mart’s annual sales of nearly $329 billion in 2012 (the most recent data available for the 2013 ACSI study) were more than three times that of Kroger, the second highest-selling retailer,which scored 80. Wal-Mart’s net sales for fiscal 2014 were $473 billion.

Roughly two-thirds of the country’s population live within 5 miles of some kind of Wal-Mart facility, be that a Wal-Mart store, Sam’s Club, distribution center or fulfillment center.

“Wal-Mart doesn’t realize it’s leaving money on the table because there’s no customer loyalty,” said Paula Rosenblum, managing partner at Retail Systems Research. “They’re the retailer of last resort rather than the retailer of first choice.”

Wal-Mart was also ranked low for customer satisfaction in the break-out categories of department/discount stores and supermarkets. Among supermarkets, Publix was at the top with a score of 86 and Wal-Mart remained at the bottom, with 72. When compared with other department and discount stores,Nordstrom took the top with 84 and Wal-Mart took the bottom, 71.

Comment from Wal-Mart was limited to an email statement from spokesman Sarah McKinney: “Striving for excellence and serving our customers is at the core of everything we do. We are more committed than ever to improving our customers’ shopping experience and are actively taking steps to ensure our more than 140 million weekly customers leave our stores feeling satisfied.”

When it was announced in November that Doug McMillon would become Wal-Mart’s new president and chief executive on Feb. 1, he alluded to the company’s relationship with its customers. It was reminiscent of the philosophy of Wal-Mart founder Sam Walton.

“Our company has a rich history of delivering value to customers across the globe and, as their needs grow and change, we will be there to serve them,” McMillon said.Then later, “By keeping our promise to customers, we will drive shareholder value, create opportunity for our associates and grow our business.”

Wal-Mart uses its mass to create the perception of low price, said David Van-Amburg, managing director of the American Customer Satisfaction Index.

“Pricing itself almost becomes irresistible to some customers,” VanAmburg said. “Shoppers of Wal-Mart are willing to put up with a certain degree of misery in order to get those great prices.

“They have very low expectations of what the experience is going to be like. We’re basically resigned to those low expectations. Wal-Mart eventually delivers on those low expectations,” he said.

“But they still walk out the door saying, ‘I still got these amazing prices. It’s worth it,’” VanAmburg added.

Wal-Mart likely doesn’t care as much as others about how they are perceived as a customer-service provider, one company watcher said.

“They want to satisfy their customers. They don’t necessarily need to be recognized as the Nordstrom or Ritz Carlton of the industry,” said Shep Hyken, a customer service expert and speaker in St. Louis.

“Wal-Mart sends mixed messages, but when you show up at a store you get a very clear message, which is that they want to be the low-price provider,” said Rosenblum. And even that isn’t always the case, she said. “They try to be very, very low price on the most visual items, particularly in grocery.” Customers are taking note, which is causing Wal-Mart to lose market share to Dollar General, she said.

VanAmburg agreed.

“Others have gotten better at combining quality service with better price,” he said. When deciding where to shop, customers are now more willing to pay just a little more for a product if the experience is better - neat, fully-stocked shelves in a store full of eye-catching displays and friendly help from a visible floor staff.

“If Wal-Mart’s business model is ‘the lowest prices’ and people keep coming into the store, then customer service may not matter that much to a company in terms of the bottom line,” VanAmburg said.

“They may see it as, ‘If it’s not broke, don’t fix it,’ or in this case, ‘Even if it’s broke, it’s just broke a little, so still don’t fix it.’”

Business, Pages 69 on 03/09/2014