Amazon #1 In Customer Service, But Will This Lead To Sustainable Loyalty?

Recently our friends over at the National Retail Federation directed us to Amazon.com, where Founder and CEO Jeff Bezos had once again posted a public letter to customers, this time stating:

I’m happy to report that Amazon has been rated #1 in the National Retail Federation Customers’ Choice Awards…

Why were we excited to see this? BIGinsight compiled the list of Customers’ Choice Award recipients for the NRF Foundation, which was unveiled at their BIG Show earlier this year. These awards recognize the retailers that provide the “best” customer service and were nominated through an unaided, write-in question by (who else?) consumers.

2011 Customers’ Choice Awards: Top Ten (source: NRF Foundation)

1. Amazon.com
2. L.L. Bean
3. Zappos.com
4. Overstock.com
5. QVC
6. Kohl’s
7. Lands’ End
8. JC Penney
9. Newegg.com
10. Nordstrom

Customer service in the conventional sense has generally implied face-to-face communication: greeting a customer; providing him/her with product information, demonstrations, additional options, or size assistance; suggesting add-ons or complementary products; and finally, completing the sale. Historically, the best opportunity to cultivate great customer relationships is within an environment where personal interaction between the retailer (i.e. sales associates) and customers is at its peak: a physical store.

So does it surprise you that a traditional brick-and-mortar retailer didn’t top this year’s list? Further, just three of the retailers (Kohl’s, JC Penney, Nordstrom) who graced the top 10 aren’t primarily entrenched in e-commerce, catalog selling, or home shopping.

So how does Amazon rank #1 in customer service?

The digital age has forced the evolution of customer service. In a world where emails and texts have replaced more intimate forms of communication, where shoppers can complete a sale 24/7 via online transactions, and where showrooming is linking the physical shopping experience with the virtual, the modern definition of customer service seems to have downgraded the importance of direct human interaction. And, let’s not forget that customer service in the traditional sense has also been crippled in recent years by an economy fostering a trend toward part-time, minimum wage, less “invested” sales associates.

As the world’s largest online retailer, Amazon has been a driving force behind the e-commerce movement and changing standards for customer service excellence. Some of the words consumers used in their reasons to nominate Amazon for Customers’ Choice included “efficient,” “fast,” “reliable,” “no hassle,” “easy,” and of course, “free shipping.” Note that these terms differ vastly from those who nominated Nordstrom, THE purveyor of traditional customer service: “experience,” “friendly,” “personal,” and “knowledgeable.” [More specific reasons can be found here for each retailer included in the top 10.]

Consider too the e-commerce services that online shoppers (a growing group) value. While the majority indicates that toll free “live” customer service very important or important, this figure has declined nearly 10% from 2007. With customers increasingly gravitating to such services as low prices, free shipping, and easy to use websites over the past few years, it’s obvious that verbal communication isn’t a service prerequisite when it comes to buying online.

But are Amazon’s low prices, free shipping, and efficient turnaround enough to capture sustainable customer loyalty? After all, the troubled economy did create a new consumer – one who shops around, is value-oriented, and may find it increasingly difficult to create ties with one retailer over another.

One of the most fascinating parts of the retail industry is that we are always looking toward for what’s “next” – hot new trends, advancements in technology, gotta-have products, or evolving practices that change the way we do business. Retailers like Best Buy and JC Penney have already announced efforts to ramp up one-on-one interaction to drive customers back to their stores, looking ahead to perhaps a renaissance of traditional customer service.

With its history as a game-changer, though, Amazon just might remain what’s “next” for the foreseeable future.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

Advertisement

2011 Customers’ Choice Award Winners

For those of you unable to attend the NRF BIG Show this year (or who may have been hibernating under the retail rug), winners were announced this week for the 2011 Customers’ Choice Awards.

For the past several years, we’ve been pleased to provide the research behind the Customers’ Choice Awards to the NRF Foundation /American Express…research which (of course) comes straight from the thoughts of more than 9,000 consumers in our monthly survey.

While finding out which retailers rated tops among consumers is exciting, it’s always interesting to see why a particular retailer received a vote [because we ask that, too.] Results to this unaided, write-in question are available by request to the relevant retailer on a case by case basis, but we thought it’d be interesting to share a few for the Top 10 retailers:

1.       Amazon.com

“Amazon always does an excellent job fixing any problems that come. They’ll give you a quick refund or send a replacement item immediately. If the shipping takes longer than expected, they’ll refund the cost of shipping or give you store credit. They really got the extra mile to prove that they actually care about your business.”

“I have shopped with them for many years now. They have always been very helpful and have always gone out of their way to be helpful sometimes even going above and beyond the call of duty, so to speak.”

2.       L.L. Bean

“I called once because an item was missing in my order…the lady who took my call was pleasant professional and really fast at figuring out how to help me. I received my item two days later…which to me indicated that she had the item ready that same afternoon to ship out immediately.  That’s Customer Service.”

“They stand behind their products 100% and no questions or hassles should you need to return an item, even years later.”

3.       Zappos.com

“No charge for shipping (either way) and returns without a hitch. Attentive to a problem if it arises, which it usually doesn’t.  These people know how to run a business.  They should be in Congress.”

“24/7 live customer service, free shipping and free returns with no hassle, video of products to see what they look like on real (not models) people!”

4.       Overstock.com

“I love O.co! They have wonderful selections that are ever changing and ever growing. They offer sales and promotions more than anywhere else. Their shipping is fast and secure and usually less than anywhere else. You can call and speak to someone live about any issue or question. What’s not to love?”

“I just think they stick out more to me because whenever I had issues with the products I purchased through them, they were always so quick to help me find a solution regarding the problem.  They were quick in shipping out a replacement product and followed up with an email.  They are awesome!”

5.       QVC

“Because they are the best at customer service. They strive to make sure all orders are correct and are very helpful whether on the phone or online. They are the best!”

“QVC means quality, value and convenience.  As a result, no matter what day or time I call or online chat, return a product or ask questions, they are always friendly, engaging and interested in my issue, concern or purchase.”

6.       Kohl’s

“Always a hello and smile when you walk in the door. A no haggle return policy and great sales are the biggest assets to the company.”

“Kohl’s has not lost sight of the “little people.”  Unlike [Retailer Withheld], who seems to be more concerned with having the lowest price on everything possible….which is not ALWAYS what the customer wants.  I had worked in retail myself for over 17 years and can tell that Kohl’s has the same mentality that I had learned many years ago….customer service is the key!!!!”

7.       Lands’ End

“They give exact measurements of every garment and are the friendliest people I have ever encountered. When I have to exchange or return something, they go out of their way to help me.”

“The consistently provide the most efficient and friendly customer service in all formats.”

8.       JCPenney

“JCPenney always goes out of their way to help the customer.  They have a fair return policy.  The store associates are on the floor and easy to find if you need help.  The company has wonderful sales and reward incentives for shopping with them. I have never had a negative experience shopping at JCPenney!”

“You would have to be in the store to experience what I’m talking about.  It’s like all of the staff had been trained at the same place as Nordstrom.  They have put the emphasis on customers.”

9.       Newegg

“They provide the customer with the tools to rate and complain (if needed) and give overall feedback on each product and the store in general.  They are always willing to work with you if you have a problem.”

“I work with this company a lot. As such, I see some less than stellar attempts at delivery that result in high dollar items being destroyed. All of my contact with them is great and these people are ones that I feel like I can sit and have a beer with.”

10.   Nordstrom

“I have never been to a Nordstrom where employees did not go far out of their way to help me. They will help you pick out clothes. They will ask other employees to help find things if they need it. They have extraordinarily good return policies. They actually care about customers. I do not shop frequently yet I have had employees remember me and what I purchased.”

“They care, offer plenty of time for you to make a decision… unhurried, pleasant experience all around.  The merchandise isn’t all jumbled together, rather it is laid out logically. The dressing rooms are spectacular with good lighting, mirrors and almost a hushed atmosphere.  I fell well taken care of there.”

To read more about the 2011 results as well as methodology, click here.

Source: BIGinsight.com

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Thanks for the Customer Service, but my Smartphone Found a Better Price

Forget about shopping in your pajamas – with smartphones and tablets, you can shop in multiple stores by going to just one store. Sure, you can do that online, from the comfort of your own home, but you can’t feel the product and really see it up close. You also don’t have the advantage of picking the brains of customer service reps and product experts.

I recently had the chance to “borrow” customer service from a store I wasn’t planning to purchase from. Sadly at the time, I did not have a smartphone (those were tragic times), but I still went in to an electronics store knowing prices and stats of laptops I had found online. I spent time chatting up a member of the customer service team and he helped me pick the model I wanted. When the associate was ready to ring me up, I chuckled a little and said “No thanks, I found this same model online for $200 less…in red.” Although the associate was bummed, he knew he was defeated (he could not offer me my heart’s desire – a new metallic red Toshiba!). He groveled and tried to counter the offer with warranties, but I would already be getting one from the manufacturer no matter where I purchased. Had his boss been aware of better deals and color selections elsewhere, perhaps the store could have made me a better offer.

Using smartphones and tablets, Mobile Users have pulled this same maneuver—they shopped one store, compared prices on their device, and then left to purchase somewhere else! 40.6% have gone to another physical store and 25.6% have purchased from a different online retailer:

Have you ever done any of the following on your smartphone or tablet while shopping in a store? (Check all that apply)
Compared prices and purchased from another retailer’s physical store	40.6%
Read product reviews to decide between products	35.8%
Compared prices but still purchased from the same retailer	30.6%
Scanned a QR code to get more information about a product	29.7%
“Checked in” for a discount	26.7%
Requested a price match	26.4%
Compared prices and purchased from another retailer’s website using my device	25.6%
Compared prices and purchased from another retailer’s website using my laptop/desktop after leaving the store	23.1%
Compared prices and purchased from the same retailer’s website using my laptop/desktop after leaving the store	13.3%
Compared prices and purchased from the same retailer’s website using my device	13.3

 

Source: Prosper Mobile Insights™ Mobile Survey December 2011
Be sure to check out the release Opportunity Lost: 40% of Mobile Users Compare Prices, Purchase From Competition, According to Prosper Mobile Insights™

Several Mobile Users are also taking advantage of customer reviews, QR codes and check-ins.

Retailers need to watch out for these “smart” shoppers and iPad price investigators! Physical stores need to be able to compete with online stores, as well as their physical next door neighbors, since smartphone and tablet shoppers have all the competition’s price and selection information at their fingertips. Retailers can’t rely on the idea that shoppers like to touch and feel the merchandise before they buy—most shoppers still do, but they can experience your products in person and still purchase them somewhere else where the price is better! (They can take advantage of your knowledgeable sales people and still take the better price elsewhere 🙂

We want to hear your stories! How have you used a mobile device to help you shop? Have retailers lost your business because you found better deals somewhere else? (Have you made an electronics guru cry recently?) We want to hear from you!

Customers’ Choice – A Look Back

Sorry…we aren’t about to reveal the 2011 Customers’ Choice Winners, but we have been hard at work on this year’s list in recent weeks.  So I thought that now would be a great time to take a look back at previous winners.

For the past several years, we’ve been pleased to provide the research behind the Customers’ Choice Awards to the NRF Foundation…research which (of course) comes straight from the thoughts of more than 9,000 consumers in our Consumer Intentions & Actions® survey.

Zappos.com took home top honors in 2011, moving up from #3 in previous years. Perennial favorites for customer service include Amazon.com, L.L.Bean, and Overstock.com.

Below are the NRF Foundation/American Express Customers’ Choice Award Winners for the past two years:

2010

1. Zappos.com
2. Amazon.com
3. L.L.Bean
4. Overstock.com
5. Lands’ End
6. JC Penney
7. Kohl’s
8. QVC
9. Nordstrom
10. Newegg

2009

1. L.L.Bean
2. Overstock.com
3. Zappos.com
4. Amazon.com
5. QVC
6. Coldwater Creek
7. HSN
8. Lands’ End
9. JCPenney
10. (tie) Kohl’s, Nordstrom

To read more about the 2010 results as well as methodology, click here.

Stay tuned for the 2011 results, which will be announced at the NRF 101st Annual Convention & EXPO.

©2011, Prosper®