Dysfunctional consumers require most attention as they can hurt revenue big time

Every retailer knows to pay attention and reward the loyal, happy consumer but they also need to pay close attention to the irate, angry shopper and make sure they don’t leave the store in that particular mood.

If they do, it could mean big revenue risk and brand hurt as they’re likely to share that negative shopping experience with everyone.

That’s the finding of a new collaborative study regarding dysfunctional retail touchpoints conducted by LoyaltyOne, the Verde Group and Dr. Deborah Small, professor of marketing and psychology at the Wharton School of the University of Pennsylvania.

The survey, which polled 2,500 U.S. consumers, reveals that about half report having an issue during a shopping venture, and of those 81 percent did not reach out to the retailer regarding the issues. Of those ‘silent’ shoppers, 32 percent said they are unlikely to recommend the store to anyone, which could impact that retailer’s bottom line at some point.

Of the shoppers who did contact the store due to a negative experience and had their issue resolved, 84 percent are less likely to impact store revenue and potential risk.

"The results are a resounding confirmation that poor customer experiences have a considerable negative impact on shopper spend and attrition which can run into the billions," Dennis Armbruster, LoyaltyOne Consulting VP and managing partner, said in a release on the study.  "We’re ushering in a new era of customer experience measurement vital to retailers looking to make even more informed decisions."

Here are additional highlights from the survey results:

  • Mass merchandisers are putting 25 percent of potential revenue at risk 
  • Apparel retailers are putting 16 percent of potential revenue at risk 
  • Department stores are putting 15 percent of potential revenue at risk
  • Drugstores are putting 12 percent of potential revenue at risk
  • Grocers are putting 11 percent of potential revenue at risk

The survey also revealed that big spenders within a category disproportionately experience certain problems:

Mass Retail "Check Out" Risk: Shoppers frustrated by check out wait times reported spending 23 percent more than the average mass retail customer ($545 vs. $446 a quarter)
Department Stores "Not-My-Department" Staff Attitude: Shoppers troubled by an associate’s not-my-department attitude reported spending twice  as much as the average department store customer ($543 vs. $261 a quarter)
Apparel Retailers "Ship Date": Particularly in their online channel, customers who cited their inability to obtain a specific date or time to receive an online order reported spending 66 percent more in the category ($416 vs. $250 a quarter)

"In a very robust platform, these partners have taken the psychology of shopping and married it with the economics of shopping. Insights around the impact of the silent customer could prove to be valuable tools for retailers looking to minimize the risk of attrition created from weak customer experiences," said Dr. Small in the release.

Topics: Consumer Behavior, Customer Experience, Customer Service, Employee Training, Retail - General

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