Top 10 Retailers with the Best Customer Experience
In today's retail environment, a good or bad customer experience can make or break retailers competing for shopper dollars. So how well do leading multichannel retailers earn loyalty from shoppers with the quality of their customer experience (CX)? To find out, Forrester has ranked the CX quality of 53 retail brands in its 2018 CX Index, including 42 multichannel retailers analyzed as part of "The US Multichannel Retailers Customer Experience Index, 2018."
We asked the index's author Sucharita Kodali (co-authored by Alex Causey) what it takes for retailers to top the list.
"Generally the biggest factor is that retailers have loyal shoppers who enjoy the in-store experience," Kodali told RIS. "The top two retailers on the list don’t have a strong digital commerce presence but they do have strong merchandising and service in stores."
Newcomer Trader Joe’s claimed the top spot in multichannel retail as a new entrant in 2018, however, Saks Fifth Avenue fell 18 places to the bottom. The index found 89% of multichannel retail customers who feel appreciated will advocate for the retailer, 90% plan to stay with the brand, and 86% plan to spend more with the brand.
Customer experience leaders grow revenue faster than CX laggards, drive higher brand preference, and can charge more for their products. Based on a survey of more than 110,000 US adult customers in 2018, Forrester’s methodology measures how well a brand’s customer experience strengthens the loyalty of its customers so it can reap these benefits.
For a full list of rankings, download Forrester’s report, The US Multichannel Retailers Customer Experience Index, 2018 [subscription required]. To learn more about Forrester’s CX Index, click here.
Here we reveal the top ten multichannel retailers that successfully deliver customer experiences that create and sustain loyalty from "The US Multichannel Retailers Customer Experience Index, 2018."
Top Ten Multichannel Retailers with the Best Customer Experience
1. Trader Joe’s
A new entrant in the 2018 US CX Index, grocery store chain Trader Joe’s took the top spot among multichannel retailers. Eighty-seven percent of Trader Joe’s shoppers said their experience of shopping with the brand was easy. The grocer also delivered an impressive 69 positive customer experiences for each negative one — the highest among the 287 brands featured in the 2018 US CX Index. Trader Joe’s small, easy-to-navigate store formats, curated assortments, cult private-label products, and friendly customer service all help it achieve this. One of the great ironies of its top position is that it has a rudimentary digital footprint and no owned e-commerce presence.
2. Costco Wholesale
Costco Wholesale rose five places to take second place in 2018. The percentage of Costco shoppers who reported having effective experiences with the brand was higher than all the other multichannel retailers measured. Costco offers shoppers a generous return policy and new delivery options.
3. Neiman Marcus
Neiman Marcus offers assortments of upscale apparel, accessories, jewelry, beauty and decorative home products. The experience at its stores is closely integrated with an online platform that accounts for more than a third of sales.
4. Hobby Lobby
Hobby Lobby moved up one spot this year. The Christian-owned craft store has been in operation since the 70's and continues to rank high on Forrester’s list.
5. BJ’s Wholesale Club
The membership warehouse club has a loyal following. Moving up a spot this year, BJ's has been investing to keep that following, launching a new mobile site last year, delivering an omnichannel experience that makes it easier for members to browse, research and save on purchases. It uses predictive analytics and machine learning to assist with buying decisions, proving members with stock they want, and has deployed a next-gen planning and execution solution to better understand customer and basket information and distribute personalized promotions. BJ's has also expanded its Instacart partnership to offer same-day delivery in cities along the east coast, making sure to give its shoppers more choices for shopping convenience.
Beauty retailer is a newcomer to the list this year, but rightfully nabbed a top spot right away. The retailer known for its hands on customer experience in stores where shoppers can test and try products before they buy, has also weaved technology and the digital experience into its brick and mortars. It's tested small format stores which integrate a variety of digital tools to optimize shopper experiences before, during and after their store visit.
7. Barnes & Noble
Barnes & Noble vaulted up 12 places in the rankings, making it 2018’s biggest mover. Barnes & Noble continues to fight with Amazon and other booksellers for customers. However, Barnes & Noble’s most loyal customers find its staff particularly helpful and its digital content and services like in-store pickup valuable, says the index report. Its physical locations also help connect customers with authors, which create unique loyalty opportunities that digital booksellers can’t replicate.
The pet supplies retailer dropped a spot this year, but has built a loyal customer base with in-store events that build community. PetSmart bought the biggest e-commerce pet food and product site Chewy.com last year for $3.35 billion. It has also deployed solutions to transform its pricing capability with a strategic, data-driven approach, keeping pet shoppers coming back.
While other department store retailers have struggled, Nordstrom remains in the top ten for customer experience. The retailer has been working hard to reinvent itself in the digital age, and generated an 18% increase in sales enabled through its digital capabilities in its first quarter of 2018 compared to the previous year. It's digital investments have also included appointing its first chief digital officer and acquiring two digital retail technology companies: BevyUp, the innovators behind a digital selling tool, and MessageYes, a platform rooted in conversational commerce. On the brick-and-mortar side it offers shoppers a plethora of customer-centric services. It also opened its first stand-alone Men's Store in Manhattan, weaving together some of its newest retail technology with more traditional customer services. The Men's Store is part of a much bigger project--the opening of a 367,000 square-foot flagship, planned for 2019. Meanwhile, it's 3,000-square-foot Nordstrom Local store experiments with having no dedicated inventory, but plenty of customer experiences.
The Swedish home store continues to improve its customer experience. The stores, which offer cafes with buffet events, play spaces for children and more, has a loyal fan base. Now it is pushing into the digital space with augmented reality (AR) apps so shoppers can virtually place furniture. It also has acquired TaskRabbit, an online platform that connects consumers with freelancers to handle jobs such as furniture assembly.