In Customer Service, Online-Only Retailers Are Beating Out Brick-and-Mortar
For an in-store shopper, she looks pretty happy. Photo: Cindy Ord/Getty Images
When brands and retailers were first debating the merits of e-commerce, many detractors — particularly those in the luxury sector — complained that it was simply impossible to bring the same level of customer service on offer at brick-and-mortar stores to an online retail environment.
How ironic, then, that in a customer service survey recently conducted by Forrester, online-only retailers outranked traditional stores (i.e., those with both a brick-and-mortar and online presence) by a large margin. Of the 299 brands surveyed across industries ranging from airlines to wireless service providers, six of the top 15 brands were digital-only retailers. QVC (which I'm not sure I'd qualify as an online-only brand, but Forrester does) ranked first among retail brands, followed by Amazon, Newegg, Zappos, Etsy and HSN. Legacy retailers like Neiman Marcus, Saks Fifth Avenue and — most surprisingly, Nordstrom — did not rank in the top 15 overall.
Customer service can strike many as a boring part of business (it sure doesn't get me up in the morning), but retailers value it a great deal. As the study points out, improvements in customer service have been linked time and again to sales growth, and few things have a greater impact on customer loyalty than the quality of service. A separate Forrester survey published last year showed that companies consider customer service their biggest priority, second only to increasing sales.
Interestingly -- though not surprisingly -- nearly two-thirds of the top-ranked brands are privately owned, "free from Wall Street's obsessive focus on quarterly results," to borrow Forrester's phrasing. Three others on the top 15 list — Amazon, Charles Schwab and JetBlue Airways — are known for prioritizing customer loyalty over quarterly gains.
Food for thought, you e-commerce holdouts.
