Retail

These 2 Stores Are America's Favorite Retailers

Last year, many retailers had to close their brick-and-mortar stores because of the pandemic. However, Apple just opened all of its U.S.-based stores for the first time in months. COVID-19 drove many shoppers online, but the shopping experience of those who could visit stores varied widely, according to a widely regarded research firm.

The American Customer Satisfaction Index just issued its Retail and Consumer Shipping Report 2020–2021. The first point that the researchers made was that the category suffered as a whole due to the pandemic. The ASCI measures satisfaction on a 100-point scale. The report said:

At a time when much of the Retail sector anticipates being in turnaround mode for 2021, customer satisfaction is not heading in the right direction. The Retail sector overall retreats 2.3% to a score of 75.5 on the American Customer Satisfaction Index’s (ACSI®) 100-point scale. This is the lowest ACSI score posted for the sector since 2015.

The survey covered six types of retailers: department and discount stores, specialty stores, health and personal care stores, supermarkets, internet retail and gas stations.

Two retailers did better than the balance of over 70 retailers that were measured. In the department and discount store category, the average store across all retailers was 76. Costco Wholesale Corp. (NASDAQ: COST) finished first with a score of 81. Nordstrom Inc. (NYSE: JWN) finished second at 80. While Costco dropped two points from the previous year, Nordstrom gained one point. ASCI pointed to the reason for Costco’s success:

Costco holds first place for customer satisfaction for a fifth straight year, despite a 2% drop to 81. Costco remains the value leader in the category, and customers appreciate the cleanliness and layout of its stores—a factor that has gained new importance since COVID-19.

In the critical ASCI internet retail category, Nordstrom finished first with a score of 81, down one point from the previous year. Costco had a score of 80, also down one point, and it was tied with Etsy (down two points) and Newegg (down one point). Online behemoth Amazon ranked next at 79, but its score plunged by five points.

It is impossible to overstate the extent to which e-commerce will drive retail sales, even after the pandemic fades. The category has grown for over a decade compared to brick-and-mortar retail. And consumer habits of shopping online likely have been reset permanently due to COVID-19. ACSI researchers noted:

Nordstrom now earns the internet retail crown, slipping 1% to an ACSI score of 81. In 2020, the company further enhanced its store and online integration, giving online customers expanded merchandise selection, delivery, and store pickup options. During its Anniversary event, digital sales accounted for 60% of total sales

It is worth revisiting what has happened to retail over the last year. Well-known companies, particularly J.C. Penney, have struggled to remain in business. Sears has virtually disappeared. Retailers, led by Macy’s, have desperately sought new funding. On Thursday, Gap said it had missed its targets for the quarter that ended January 30.

Some retail companies will never reopen. Others will be hobbled permanently. The importance of customer service may be the key differentiator as the industry fights to come back.