Retailers Are Missing the Mark When it Comes to Customer Experience

It’s no surprise that by creating a superior experience for consumers, brands can help foster loyalty. The better the quality of interactions consumers have with a retailer, the more likely they will continue shopping with that retailer. Think back to a great, or perhaps not so great, experience you’ve had with a retailer. That experience, whether positive or negative, probably impacted the likelihood that you would keep shopping with that company. Despite this crucial connection between customer experience (CX) and customer loyalty, retailers are struggling to differentiate themselves and provide better-than-average customer experiences.

Forrester recently ranked the CX quality of 53 multichannel and digital retail brands, and found that improvement was stagnant over the past year. We did this by using Forrester’s Customer Experience Index (CX Index™) methodology, which measures how well a brand’s customer experience strengthens the loyalty of its customers.

Traditional retailers’ CX Index scores remained flat in 2018, and digital retailers’ scores dropped slightly. Of the 42 multichannel retailers we evaluated, only four made the cut for our “good” category. Digital retailers scored higher, with shoppers rating five of the 11 brands’ CX as “good.”

Here are a few examples of the top- and bottom-ranking brands that retailers should take cues from:

• Home Shopping Network (HSN) earned the top rank among digital retailers this year. HSN creates positive CX by delighting its older customers with superior customer service agents, crystal-clear return policies and comprehensive content.
• Zappos earned a consistently high CX score again due to things such as superior human customer service interactions, an easy-to-use website and hassle-free returns.
• Gilt and Rue La La moved to last place and next-to-last place, respectively. Flash-sale sites now have higher prices, stricter return policies, weaker product assortments and slower delivery, causing CX to be less positive.

The Link Between Emotion and Loyalty

Emotions have a powerful tie to whether customers will continue interacting and spending money with your brand.

Appreciation, confidence and happiness are the top three emotions when it comes to increasing customer loyalty among digital retailers. In fact, among surveyed shoppers who felt appreciated, 88 percent plan to stay with the brand, 88 percent will advocate for the brand, and 87 percent plan to spend more with the brand. It pays to make your customers feel like they're a value to your brand.

On the other hand, annoyance, disappointment and frustration drive customers away the most. Among shoppers who feel disappointed, only 20 percent will advocate for a brand, 19 percent say they will stay with the brand, and 24 percent will spend more with it.

What Does This All Mean?

When customers have a better experience with a retailer, their intentions to stay with that retailer longer, buy more from that retailer, and recommend that retailer all increase. However, it’s rare to find a digital retailer that's providing exceptional CX. This creates an opportunity for brands to revamp their CX to rise above competitors and come out on top. It’s now or never.

Interested in hearing more? Listen to Forrester’s What It Means podcast episode where Vice President and Research Director Harley Manning digs into Forrester’s 2018 CX Index rankings and explains how companies can become CX leaders by placing customers at the core of their businesses.

Sucharita Kodali is vice president, principal analyst at Forrester Research.