In an ideal world the customer would always be treated like royalty. While most retailers do make an effort to provide a positive customer experience, there are a handful that seem not to care. Others, while conscious about the importance of the perception of the customer, are still willing to sacrifice, however slightly, in this area. Customers can be very forgiving and many times overlook short-term lapses in customer service, but as the overall trend is swinging toward an endemic decline in customer service an increasing number are beginning to take notice.
Sometimes these problems in customer service occur due to reductions in the retailer’s budget. In an attempt to lower operating costs to offer more competitive pricing to their customers they inadvertently provoke a lower standard for customer service. Others in an attempt to remain competitive within their markets actually make a conscious decision to reduce collateral services such as customer service. The economic reasons for this lowered standard are many, but the results can be more resonant than what the retailers may have anticipated.
The cumulative effects of this industry-wide lowering of customer service standards may have already created permanent changes in the mindset of the consumer. While just as little as two decades ago over 75% of shoppers listed customer service as one of the main reasons for choosing a particular retailer, current statistics now indicate that low prices and an ample product selection are the main determining factors in choosing a retailer. Some consumer analysts cite the internet as an indirect influence in this change. Consumers are seemingly willing to perform many of the tasks once performed by customer service agents themselves. Price comparisons, inventory availability, initiating returns, checking warranty information and filing complaints are routinely handled in whole or in part online by the customers themselves.
The following list is a compilation of the ten retailers with the worst customer service in the world.
10. CVS – Customer service rating of 56%
Operating over 7,000 retail locations under the brand names of CVS Pharmacy and Long’s Drugs Stores, this retailer concentrates on the dispensing of household goods and small electronics as a supplement to its sale of medication. With a customer satisfaction rating of only 56% this operation demonstrates that even something as mundane as your local drug store/convenience store can suffer from lackluster customer satisfaction. Some analysts attest that this Fortune 500 company underwent massive changes to their service protocols when it merged with Caremark in 2007. Since the merger the company has faced multiple FTC investigations for such things as price fixing.
9. Toys R Us – Customer service rating of 56%
Not everything is fun and games for this giant toy retailer. Toys R Us registered a 55% customer service rating in 2013 according to the Temkin Group. With over 1,640 stores worldwide, the toy retailer has lagged in recent years in their customer service rankings. In this same time period the company has recorded growth rates as high as 31% in year over year figures for their online sales. Whether it is coincidental or a direct consequence, as the company’s online sales have increased in the past ten years, so too have their customer service ratings dropped.
8. eBay – Customer service rating of 54%
While eBay is not a brick and mortar operation, it is classified as one of the biggest retailers in the world by most financial analysts. With annual revenues surpassing $14 billion per year, it is easy to understand why it is classified as such. Having a presence that is strictly online and highly automated did not spare it from experiencing weak customer service assessments from its clients. The company received a dismal 54% customer service rating. This decline in their customer service ranking has taken place even as annual revenues increase and in spite of concerted efforts to improve the customer experience. As far back as 2009 eBay consolidated its customer service department in the United States in an attempt to offer faster and better customer service. As 2013 figures indicate, however, eBay has not been able to curb the slide in customer service performance and satisfaction.
7. Best Buy – Customer service rating of 51%
Best Buy is an electronics discount retailer with over 1,150 stores around the world. In 2013 the customer service evaluation that they received from their customers was a lowly 51%. This Fortune 500 company has steadily experienced declining revenue and profit figures. In the last two years it has announced employee cut backs and store closings in order to retain their financial viability. Recently they have also focused on transitioning some of their larger stores into smaller “Best Buy Mobile” stores. Some industry analysts cite the shift in customer shopping habits away from specialized stores requiring a large number of employees and floor space for Best Buy’s decline. This in turn has resulted in a lowered level of customer service for the customer as Best Buy continues to implement staff cutbacks.
6. Ross -Customer service rating of 51%
Classified as an off-price retailer, Ross sales season-surplus and slightly irregular clothing in its 1.037 stores in the United States. Even though their business model is one that would seem to foster an added level of tolerance from their client base, this off-retailer still managed to only eke out a customer service rating of 51% from their customers. A review of the most prevalent customer complaints about Ross from consumer affair websites revolve around staff rudeness or indifference.
5. TJ Maxx – Customer service rating of 50%
Just as Ross, TJ Maxx is classified as an off-retailer dedicated to selling a similar type of clothing products. Unfortunately for TJ Maxx, the comparison to their competitor extends to low customer service ratings as well. TJ Maxx received a 50% rating. Curiously, similar to Ross, there is little analytical data offered by industry experts to account for these low ratings. Some consumer groups express a concern that TJ Maxx fails to offer a consistent level of customer service across all of its 972 locations. They point out that while certain locations receive high ratings, others persistently bring the overall average down.
4. Wal-Mart – Customer service rating of 48%
Of all of the retailers in the world, Wal-Mart is definitely the largest. With over $469 billion in annual sales revenues and over 11,000 stores worldwide, Wal-Mart has a huge customer base. This same customer base expressed a less than stellar opinion of this retail giant’s customer service. It was rated at only 48% in 2013. This low rating, however, is not the exception. Since 2007 Wal-mart has been the major discount retailer with the lowest customer service ratings. Even its online division at walmart.com received an e-retail satisfaction index of only 78. That is significantly lower than their major competitor, amazon.com that received an 88 in the same index.
3. K-Mart – Customer service rating of 48%
In 2013 Wal-mart shared it lowest customer service rating for a major discount retailer with one of its chief rivals, K-Mart. Yes, in 2013 K-Mart also received a basement dwelling 48% in customer service from its clients. This low evaluation of its customer service is in spite the fact that K-Mart has, since its purchase of Sears in 2005, rolled out various projects aimed at elevating its reputation. These low customer service ratings may be playing a role with the company’s stagnant sales figures. Since 2005, it has only recorded one year-over-year improvement in its sales numbers. To aggravate the situation further, consumers have also rated the store’s website as the worst performer for customer service according to J.D. Power and Associates.
2. Radio Shack – Customer service rating of 44%
With customer service ratings of 44%, the electronic retail store known as Radio Shack has gone from being a retailer with an above average customer service reputation to sitting near the bottom in less than ten years. With more than 7,000 stores worldwide, the brand recognition of Radio Shack is quite high for retailers. It currently sits at 72%, completely opposite to its customer service ranking. This drop in customer service has affected foot traffic into its stores and lowered annual sales figures. The company finds itself in a precarious financial state due to this. Its stock price has sunk to new lows in 2013 and the company has been the subject of bankruptcy rumors.
1. Apple Store – Customer service rating of 42%
In terms of the worst performing retailer as judged by its own customers, the recipient of this distinction is quite a surprise. It is the Apple Store with a 42% customer service rating. That figure is a whopping 17% lower than other retailers in its category. Due to the high customer loyalty, high-end brand recognition and sharp demand for its products, one would expect the Apple Store to be ranked among the best in customer service, not the worst. In 2013, however, its clientele thought otherwise. Retail analysts observe that this unusually low rating is likely attributable not to the fact that customer service at Apple Stores is genuinely bad, rather that the expectations of their clients is so much higher than other retailers. While most customer service surveys for the Apple Store return results praising the friendliness and attention that they receive form Apple Store staff, these same surveys give the Apple Stores a wallop in terms of waiting times. The overriding reason for the abysmal customer service numbers seems to be due to long waiting times.
For some of the companies mentioned in this list of retailers with the worst customer service in the world, the time is still ripe for change. For others it may be too late. As shopping habits continue to change and technology plays a bigger role in how consumers interact with retailers, it will be curious to see what is in store for customer service just over the horizon.
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