Speed. Convenience. Efficiency. These are just some of the reasons that consumers have gravitated to online shopping. But satisfaction with internet retail isn’t as strong as it once was.

According to our most recent Retail and Consumer Shipping Report, customer satisfaction with online retail declines more than any other retail industry, down 3.7% to a score of 78 (out of 100). While still outperforming the likes of department and discount stores (75) and specialty retail stores (77), the margin for error is now razor-thin.

There’s an opportunity for brick-and-mortar stores to regain some of the foot traffic they’ve sacrificed to the e-commerce space, but it won’t happen without a little fine-tuning.

Recently, Macy’s announced a partnership with Toys R Us that could change the “shop-in-shop” model as we know it. And they’re not alone in the quest to reinvent the in-store experience. Here are examples of other companies that are changing their approach to the brick-and-mortar model.

Bloomie’s is no longer just a nickname

Like Macy’s, Bloomingdale’s sees an opportunity to spruce up the department store. However, instead of teaming up with a faded – albeit well-known – brand, it’s giving itself a more modern facelift.

Enter Bloomie’s: a smaller (22,000 square feet), modified, tech-centric, toned-down version of Bloomingdale’s that’s built for convenience, ease of use, and speed. The store will have a “tech-enabled stylist service model,” merchandise that’s curated and rotated regularly to introduce new trends, a centralized front desk that’s built to handle everything from returns to in-store and curbside pickups to alterations, and more.   

Some of the biggest gripes customers have with department stores include inventory stocks (74), courtesy and helpfulness of staff (74), frequency of sales and promotions (73), and the speed of the checkout process (72). With the way Bloomie’s is being constructed, many of these woes could easily be addressed.

Gopuff goes brick-and-mortar

If you have a hankering for chips, snacks, beverages, toiletries, and other essentials delivered straight to your door stat, Philly-based delivery service Gopuff is for you. But it’s not stopping at online delivery – Gopuff is going the brick-and-mortar route as well.

The company already has physical locations in Texas and Florida, with plans to open spots in San Francisco and Ardmore. While this may not feel like a reinvention of the in-store experience, the idea of online retailers adding a physical presence to their already burgeoning online portfolio is an interesting development.

As we already pointed out, customer satisfaction with internet retailers took a major hit this past year. While we don’t expect these companies to shift their business models entirely, it couldn’t hurt to expand their reach a little bit.

Sometimes, you want your goods delivered. Other times, it’s more convenient to go to the store. Gopuff is making sure it has both bases covered.

Amazon is ready to revolutionize the grocery store game

Shopping for groceries can be a chore – especially if you’re doing it at a supermarket.

Customer satisfaction with supermarkets declined 2.6% to 76, according to our latest report. Toward the bottom end of the customer experience benchmark is a common pain point: speed of checkout, down 1% to 75.

Would avoiding long checkout lines altogether make the experience more tolerable? Amazon seems to think so.

Based on the planning documents for a store being constructed in Brookfield, Connecticut, Amazon appears ready to bring its automated checkout technology, dubbed “Just Walk Out”, to full-size supermarkets. This could be a game-changer for the industry.

We’ve seen Amazon try to streamline the grocery store experience in other ways, whether it’s using Dash smart carts or the recently introduced Amazon One, which allows customers to pay for items using just their palm (yes, you read that correctly). But this “Just Walk Out” tech is different and could offer an element of convenience the likes of which we’ve never seen.

Right now, Amazon’s Whole Foods ranks just above the industry average after slipping 3% year over year to a score of 77. This technology, if proven successful, could help turn things around.

Time for brick-and-mortar to evolve

Most consumers prefer online shopping. That’s not going to change anytime soon. But that doesn’t mean there’s not a place for the physical store.

The brick-and-mortar model isn’t going away. It does, however, need to evolve.

Infusing it with elements that promote speed, efficiency, convenience, and technology would go a long way toward improving the in-store experience. Bloomingdale’s, Gopuff, and Amazon got the message. Hopefully, others will too.

It’s a new record for household appliances – and not in a good way.

Customer satisfaction with the industry – including washers, dryers, dishwashers, refrigerators, ranges/ovens, and over-the-oven microwaves – slides 1.3% to a new all-time low score of 78 (out of 100), per our latest Household Appliance and Electronics Study.

But the bad news doesn’t stop there.

Nearly all the major brands we measured experience satisfaction slips. However, none more so than Bosch, which nosedives 6% to the bottom of the industry at 74.

How did this major appliance manufacturer go from near the top of the category to its worst-ever mark? Let’s take a look.

Earnings up, stock down

Bosch reported strong Q4 earnings, with a five-fold increase in net profits and 44% revenue growth year over year. Yet, the stock tumbled, and the company ended up making significant changes to its board.

Are we surprised? Not really.

Satisfaction is a strong indicator of an organization’s financial performance. Historically, stocks of companies with high ACSI scores perform stronger than companies with low scores. 

For Bosch, the chasm between revenue growth and stock decline seemed to predict what our data now confirms: The company was struggling to keep customers satisfied.  

A less-than-satisfying experience

This is the first year we measured customer experience benchmarks for household appliances. Bosch did not fare well.

From mobile quality and mobile reliability to durability and exterior design, from website satisfaction and warranty coverage to service technician courtesy and outcome of the service repair, and so on, Bosch was at or near the bottom in every single one.  

Not exactly an ideal place to start. Unfortunately, as much as we’d like to say there’s nowhere to go but up, that’s not entirely true.

Appliance and chip shortages remain problematic

COVID-19 brought about a national appliance shortage, and it’s not going away. 

According to one retailer, his three top-rated dishwashers were on back order were four months. Can you guess the manufacturer? If you said Bosch for all three, congratulations, come up and collect your prize.

The global chip shortage is also wreaking havoc. According to BSH – maker of Bosch appliances – some products are facing lead times of up to six months. 

In the end, the consumers are going to end up suffering the most, as they can expect higher prices and longer wait times for the appliances they want.

What’s Bosch’s next move? 

If Bosch is hoping for a cure-all for its satisfaction woes, it’s out of luck. 

The appliance manufacturer has a lot of ground to make up, and until this chip shortage gets sorted out, it could be years before production fully recovers. 

The only silver lining – if you can call it that – is that other household appliance companies are in a similar boat. This year, GE Appliances (Haier) slides 3% to 78, while Whirlpool hits an all-time satisfaction low after dropping 3% to a score of 77.

Sure, Bosch is firmly planted at the bottom of the industry. But the consumers have spoken and laid out their expectations. It’s now up to Bosch to clean up its mess. 

The “shop-in-shop” concept is not new.

Sephora has been putting mini shops in JCPenney stores for over a decade, and it’s now doing the same with Kohl’s. Ulta Beauty and Target have a similar arrangement, while Apple will open mini stores in 17 Targets, with plans for further expansion.

So, when word of Macy’s and Toys R Us’ new partnership broke – which includes a “shop-in-shop” strategy – it felt like a non-story. But that’s not entirely true. 

Despite following a repeated model, this case is more unique and could have bigger windfalls that redefine how these partnerships are approached in the future. Let us explain. 

Macy’s is bringing toy stores back

Unlike Sephora, Ulta, and Apple, Toys R Us is not a thriving standalone brick-and-mortar retail brand. In fact, it’s not a brick-and-mortar anything. That’s about to change.

Next year, Toys R Us will be in over 400 Macy’s department stores. In other words, save for the rare mom-and-pop shop, Macy’s is essentially bringing back physical toy stores – a place where kids (and adults) can play with actual toys. And that opens a world of possibilities. 

For Toys R Us, it’s the chance to hitch its wagon to a relevant brand and dip its toes back into the retail game without overextending. For Macy’s, it’s a chance to recreate the ultimate department store experience of yesteryear – a little Miracle on 34^th Street magic, if you will. And boy do they need it.

Department stores were struggling before COVID-19 cut off foot traffic and sent in-sales stores plummeting. The pandemic hasn’t helped. Macy’s same-store sales dropped by more than 20%, and the company announced it’ll be closing dozens of stores this year. Further, in our most recent Retail and Consumer Shipping Report, customer satisfaction with Macy’s dropped 1% to a score of 77 among department and discount stores. 

With this new arrangement, Macy’s has signaled it isn’t ready to give up just yet. It’s looking to flip the script, transforming into a one-stop shop for shoes, shirts, pants, ties, makeup, and toys. Macy’s can position itself as a place the whole family can enjoy. Talk about marketability. 

And the benefits are not limited to the physical retail space.

A new place to purchase toys online

For a stretch, Target ran Toys R Us’ website. Now, that honor belongs to Macy’s. It couldn’t have come at a more opportune time.

On the internet retail side, customer satisfaction with Macy’s tumbled 4% to 77. The retailer now sits below the industry average. 

Although Macy’s is struggling from a satisfaction standpoint, the retailer has a growing online customer base and a burgeoning toy business. Powering Toys R Us’ website should only improve its standing in the space.

Meanwhile, Toys R Us, which still has name recognition, gets prime real estate on the Macy’s website, likely expanding its reach to new customers. It’s a real win-win possibility. 

The reward outweighs the risk 

There’s always risk in deals like these. And there are no guarantees that this will be a fruitful partnership. But it feels like a risk worth taking.

Macy’s customer satisfaction was slipping both in-store and online, and it needed a jolt. Toys R Us, well, do you really need to ask?

Together, however, there’s something exciting brewing. 

Whether you’re searching for a new place to shop for toys online or eager for the chance to get your hands on the toys themselves, this Macy’s and Toys R Us partnership has all the makings of a slam dunk. 

The shine surrounding luxury vehicles has all but vanished.

According to our recent Automobile Study, customer satisfaction slid another 1% to an ACSI score of 78 following a 4% loss last year. The luxury segment now stands just one point ahead of mass-market manufacturers, steady at 77. 

Luxury automakers’ satisfaction advantage over their mass-market counterparts has been dissipating over the years. It’s all but vanished lately – and now, the line between the two segments is blurrier than ever. 

Which begs the question: What is luxury anymore?

The changing perception of luxury vehicles 

The widespread belief has been that luxury cars weren’t just fancy; they were also better made. But the idea that luxury equals a superior ride doesn’t necessarily hold up anymore. 

In terms of customer experience, luxury and mass-market vehicles rate the same for dependability (81), driving performance (81), gas mileage (76), and, even, vehicle safety (82). 

As for the attractive features that typically set luxury vehicles apart, they don’t have the same impact they once did. 

Customers agree that luxury cars outshine mass-market vehicles in terms of interior (82 to 80), comfort (82 to 80), and technology (80 to 77). But the gap in each of these categories is smaller than the previous year. And the slight advantages aren’t enough to give luxury manufacturers a leg up overall.  

In another surprise twist, luxury manufacturers can no longer point to their vehicles’ “look” and “overall style” as differentiators. After slipping 2% year over year, luxury falls into a tie with mass-market vehicles for exterior at 81. 

The fluidity of the auto industry

Last year, we pointed out that luxury vehicles were losing their luster in satisfaction. However, now we’re seeing that it’s less about the luxury segment falling by the wayside and more about the fluidity that exists in the auto industry. 

Manufacturers are altering the look and feel of certain vehicles to exude higher quality. 

Honda’s 2022 Civic Sedan, for example, boasts a cleaner exterior, a streamlined interior, and more tech features. The automaker, as it were, now sits atop all automobiles and light vehicles after surging 4% to a score of 82.   

Honda isn’t the only mass-market manufacturer making strides this year. Subaru (up 3% to 81), Hyundai (up 4% to 79), Dodge (up 4% to 78), and Ford (up 3% to 78) all show relatively strong gains year over year. 

Mass-market vehicles used to be the bare-bones option to get you from point A to point B, with flashy features only reserved for the luxury class. Now, mass-market manufacturers offer a range of add-ons to rival any high-end vehicle. You might not get all the bells and whistles, but with accessories like touchscreen controls, Bluetooth pairing, rearview cameras, and blind spot detection, you could beef up a car with a lower base price to feel more luxurious. 

Room for improvement in autos

Luxury versus mass-market. It’s easy to distinguish them based on name recognition. BMW, Lexus, and Audi evoke a certain image compared to Honda, Subaru, and Ram.

Yet, the flashier components – interior, exterior, technology – no longer give luxury vehicles a significant edge. And in terms of basics like dependability, drivability, and vehicle safety, the gap between luxury and mass-market has disappeared. 

That doesn’t mean, however, that customers are totally satisfied with their vehicles. This is most evident when looking at warranties and gas mileage. Mass-market manufacturers score 76 for both, while luxury automakers score 78 and 76, respectively.

The fluidity in the industry has led to a neck-and-neck race between mass-market and luxury vehicles. It’ll be interesting to see what factors lead to one – if any – breaking away in the years to come. 

At first glance, user satisfaction with e-business can best be described as steady.  

Per our E-Business Study 2020-2021, all three e-business industries – social media, news and opinion, and search engines and information – are unchanged year over year, with ACSI scores of 70, 74, and 76, respectively. 

However, if you dig deeper than the industry level, you’ll quickly realize these marks don’t tell the whole story. 

Take Twitter and FoxNews.com, for example. These two entities are extremely popular among the masses. Currently, Twitter has 353 million monthly active users and generated $3.72 billion in revenue last year. Meanwhile, Fox News Digital had a record year in 2020. 

But popularity and customer satisfaction don’t always go hand in hand. Regrettably for Twitter and FoxNews.com, that’s not a good thing.

Twitter takes an epic fall

User satisfaction with Twitter tanks, dropping 10% to an ACSI score of 61. With the biggest decline across all three e-business categories, Twitter now sits in last place among social media companies.  

Users feel that Twitter is worse in every customer experience benchmark – sometimes, significantly worse. They say the social media network is harder to navigate, lacks variety of services and information, and offers poor site performance. And we haven’t even touched on privacy. 

While privacy has the industry’s worst score among customer experience benchmarks, users feel social media improves in this area (69 to 71). However, it’s Twitter’s biggest issue, according to the data. The social media giant finishes near the bottom of the industry in this area.”

This shouldn’t be all that surprising if you follow the news. Twitter has received negative press for countless security blunders, including a cryptocurrency scam stemming from the hacks of high-profile accounts like President Joe Biden, Kanye West, Jeff Bezos, Elon Musk, and more. 

Twitter also faces a “content” problem. According to users, the content isn’t as fresh or relevant as last year. Identifying who is most dissatisfied with Twitter is a fool’s errand. 

Individuals on both sides of the political spectrum have voiced frustration with Twitter. Conservatives, upset over numerous account suspensions – like former President Donald Trump’s – are citing attacks on free speech, while liberals are perturbed that Twitter waited so long to curb the spread of misinformation.

FoxNews.com faces unfamiliar territory

FoxNews.com’s satisfaction struggles aren’t as sudden or intense as Twitter’s, but the writing’s been on the wall, it seems, for some time.

In 2012, FoxNews.com led internet news and opinion with an ACSI score of 84. By 2014, that number dropped to 76. It climbed as high as 79 in 2016, but FoxNews.com hasn’t hit 80 or above since 2013 – when it was 82 – and user satisfaction has declined for three years straight.

This year, FoxNews.com stumbles 4% to a new record-low score of 72. While that’s still good enough to remain atop individually measured sites, it now shares the lead with USAToday.com, and its position as the industry’s bona fide leader is in jeopardy.

According to users, FoxNews.com’s site performance is poorer, the content is less fresh, and the site is more difficult to navigate. Additionally, when it comes to the ease of using the site on different devices, FoxNews.com is among the industry’s worst. 

Can Twitter and FoxNews.com find their footing?

Twitter and FoxNews.com aren’t the only ones in the e-business sector experiencing satisfaction slumps, but their declines are the most notable. 

FoxNews.com is now closer to the middle of the pack in internet news and opinion than it is to the top, and Twitter now sits at the bottom of social media.

They each have work to do to turn things around, but at least users are giving them an idea of what needs to be fixed. Twitter users desire fresher and more content, as well as a greater variety of services and information, while FoxNews.com readers wish the site was easier to navigate and easier to use on different devices.

There’s no guarantee that making these changes will improve satisfaction, but it can’t hurt. Given each of their current situations, any improvements might be welcome.   

Customers got beef with burger joints.

According to our Restaurant Study 2020-2021, burger chains hold four of the bottom five spots among fast food restaurants. Jack in the Box (unchanged), Sonic (down 1%), and Wendy’s (down 4%) all have ACSI scores of 73, while McDonald’s sits at the bottom of the industry, stable at 70.

Although you might think this spells trouble for the patty pioneers, a closer look reveals that the burger experience isn’t all bad.

In its ACSI debut, Five Guys finishes near the top of the limited-service restaurant industry with a score of 78. Let’s see how this newcomer managed to outshine its fellow burger makers in its first appearance.

Five Guys offers 5-star experience with a mouth-watering burger

Five Guys outperforms the other burger chains in most customer experience benchmarks.

For starters, the fast casual burger chain has the most helpful and courteous staff. Food orders are most accurate at Five Guys, and it boasts superior restaurant layout and cleanliness.

Five Guys also stands out for store speed, reliability of mobile app, and likely the most appealing, food quality. We’re not saying it’s the best burger you’ll ever have, but some customers legitimately feel that way.

In truth, it’s easy to get behind the Five Guys way of doing burgers: The patties are fresh and made to order (no frozen patties here), there are free unlimited toppings (15 different toppings really, but that’s still pretty good), and the fries are crispy, tasty, fresh (obviously), and you get them by the boatload.

This burger joint may be in the fast food category, but make no mistake, this thing is gourmet.

Identifying the secret sauce

Although Five Guys has quickly established itself as the burger place to beat, some aspects of the customer experience do allow room for improvement.

Customers agree, for instance, that Five Guys’ mobile app, while reliable, lacks the quality of other fast food restaurants. Beverage quality and variety fall behind those of its burger brethren as well.

Five Guys also doesn’t offer as wide a variety of food. However, it’s difficult to hold this last point against them. They’re known for their burgers, and they consistently deliver excellent burgers.

Certainly, there’s something to be said for not spreading yourself out too thin. Chick-fil-A has led the fast food industry – and all restaurants – for seven straight years, and its bread and butter is chicken. Specializing seems to be working out well for them so far.

Other traditional burger places have attempted to branch out. Wendy’s launched a breakfast menu, and the brand is near the bottom in food quality and the fast food category overall (73 ACSI score). Burger King is expanding its palate with the new Ch’King sandwich, and the jury’s still out on that one. But the restaurant’s ACSI score of 76 places it below the industry average.

The lackluster performance of burger joints in this year’s Restaurant Study could be a reflection of the sheer volume of quick-service restaurants customers can now choose from. Diners have either tired of burgers altogether, or if they’re ordering one, their expectations for quality are high.

And this is where Five Guys performs well. So, while the company could choose to improve the quality of its mobile app, it will likely have no bearing on its burgers (which is all that really matters). As long as those patties remain fresh and delicious, customers should stay plenty satisfied.

Following a tumultuous year, the restaurant segment is getting the stabilization it desperately needs.

Hiring is up as , and sales are on the rise. Customer satisfaction with full-service restaurants and limited-service restaurants — which was suffering leading into the pandemic (down 2.5% and 1.3%, respectively) — is no longer in free fall. 

Overall, customer satisfaction with the Accommodation and Food Services sector slips just 0.4% to a score of 77.6 (out of 100), according to our latest Restaurant Study 2020-2021. 

Fast food restaurants remain steady with an ACSI score of 78, but in a surprising twist, full-service establishments shine brightest, up 1.3% to 80. 

How did the latter, while less positioned to handle the increased demand on takeout, delivery, and contactless dining options, rise to the occasion? Let’s find out.

It starts with the customer experience

From a customer-experience standpoint, full-service restaurants pretty much feast on the competition, surpassing the limited-service category in almost every ACSI customer experience benchmark.

According to customers, full-service establishments beat fast food chains in food quality (86 to 82), restaurant layout and cleanliness (86 to 82), and staff courtesy and helpfulness (85 to 82). The former significantly outpaces the latter in terms of food variety (84 to 79).  

It doesn’t stop there.

Customers feel that orders are more accurate (88 to 84) at full-service restaurants, and these spots have better beverage quality (84 to 81) and a greater variety of beverages (82 to 78).

In the all-important mobile app space, full-service restaurants hold a slight edge as well. While both industries share an ACSI score of 82 for reliability, full service wins for quality 85 to 83.

10 fast food brands stumble

For the seventh straight year, Chick-fil-A leads the limited-service industry – and all restaurants – with an ACSI score of 83. However, customer satisfaction diminishes 1% year over year.

This trend is common across the industry – and on a larger scale. 

Of the 10 fast food restaurants that undergo satisfaction slips, half experience at least 3% declines.

Arby’s and Dunkin’ both slide 3% to 77. Chipotle Mexican Grill has the same score but tumbles 4%. Wendy’s sits near the bottom of the industry, dropping 4% to an ACSI score of 73. Subway takes the largest hit, tumbling 5% to 75.

Among full-service establishments, only one has a similar slide – Red Lobster falls 3% to 77. On the flip side, two full-service restaurants have strong customer satisfaction gains: Red Robin (up 3% to 78) and Chili’s (up 3% to 77).

Full service for the win

At a time when full-service restaurants could’ve been in serious trouble, they gave customers plenty of reasons to be satisfied. 

The full-service industry surpassed the limited-service industry in food quality (and variety), beverage quality (and variety), order accuracy, store layout and cleanliness, staff courtesy, and mobile app quality. 

Fast food restaurants are known for their speed but have fallen behind in this race. Let’s see if they can use that same sense of urgency to improve satisfaction and catch up to their full-service counterparts next time around.

How did you entertain yourself during the past 18 months? 

Perhaps you read books you’d been previously putting off. Maybe you mastered countless board games like Monopoly, Battleship, and Catan. You may have even picked up a new hobby like knitting or calligraphy.

More likely, you plopped yourself down in your favorite spot, got nice and cozy, and streamed one TV show (or movie) after another. And you wouldn’t be alone.  

Thirty-nine percent of Americans added streaming subscription services during COVID-19, per an Adweek-Moring Consult poll. Additionally, 36% revealed they subscribe to more services now than they did before the pandemic. 

From a financial standpoint, companies like Netflix, Apple, Amazon, Hulu, and Disney have millions of reasons (and dollars) to feel good about their situation. If only consumers were as satisfied with what these brands were putting down.

Another (un)satisfied streaming customer

Customer satisfaction with video streaming slides 2.6% to an ACSI score of 74, according to our Telecommunications Study 2020-2021. Although customers still favor streaming to the other telecom industries, the lead is dwindling. And the streamers only have themselves to blame.

Customers feel the quality of original programming (down 3% to 74) and variety of TV shows by category (down 3% to 74) are both worse than the previous year. They believe both current season (down 3% to 71) and past season TV shows (down 3% to 73) aren’t as available as they once were, and they’re less thrilled with the number of TV shows (down 4% to 73). It doesn’t stop there.

Consumers believe the number (down 3% to 73) and variety of movies by category (down 4% to 73) were better last year. Worse yet, the availability of new movie titles leaves much to be desired, down 1% to an ACSI score of 70.

Disney+? More like Disney-minus

These flailing figures are an industry-wide issue. This year, seven streaming services post losses of 3% or more.

While Disney+ leads the category for the second straight year, satisfaction diminishes 3% to an ACSI score of 78. According to customers, the streamer is pretty much worse across the board. Aside from being less reliable, it’s middle of the road in terms of number – and variety – of TV shows and variety of films.

Along with Disney+, Hulu (75), Amazon Prime Video (74), CBS All Access (73), and Apple TV+ (72) all suffer 3% declines. 

Both Netflix and Apple TV, however, take the biggest licks of all. The former falls 4% to a score of 75, while the latter sinks 4% to 74. 

Netflix’s sudden fall from favor is probably the most shocking. Despite having the largest subscriber base, customers are clearly no longer as enthralled with the service as they once were, as its ACSI score is much closer to the industry average than the top of the charts.

What’s the solution to the streaming woes?

When pandemic lockdowns were in full effect, it was easy to turn to streaming services as a form of escape. Yet, after a while, screen fatigue set in and what was once a worthwhile activity quickly became a means of frustration.

Now that summer is here and pandemic restrictions are being lifted, people are going outside again and leaving streaming habits behind. While this might be good for our mental well-being, it couldn’t have come at a worse time for streaming services.

Still, the notion that “content is king” doesn’t appear to be going anywhere, as evidenced by Amazon’s recent $8.45 billion purchase of MGM. Perhaps this consumer (summer) break from screen time is exactly what streaming services need. It’ll give them a chance to regroup, rebuild their content libraries, and give people the fresh content they’ve been clamoring for. Or maybe that’s just wishful thinking. 

Either way, get your popcorn ready. This is a story you won’t want to miss.

 

How do we keep our customers satisfied? 

It’s a question that all businesses ask, but many struggle to answer. 

Anyone who’s searching for a silver bullet or a magic pill to improve customer satisfaction may as well start over. Because it’s only a matter of time before they realize that a single solution doesn’t exist.  

Customer satisfaction depends on a lot of factors: customer service and the customer experience; the price of a particular product; the variety of goods a business offers; even the cleanliness of a store. The list goes on and on, and evolves over time – mobile apps, quality, and speed are three up-and-coming drivers of customer satisfaction that businesses would be wise to remember.

Yet, for all the steps organizations take to try to increase customer satisfaction, there’s one area that’s more important than many realize: employee satisfaction.

The link between employee and customer satisfaction is real

There is a genuine connection between employee and customer satisfaction. 

Happy employees tend to provide superior service to customers. Better service leads to happier customers. Happy customers are more inclined to become repeat shoppers, which means more money in the company’s pockets. 

This results in “… higher stock prices, bigger returns on investment, and happier shareholders. And (the smart companies) can turn that capital around to give employees bigger benefits, which in turn makes them, and their customers, even happier.”

Unfortunately, if happy employees equate to happy customers, the opposite is also true. Dissatisfied employees likely won’t offer top-notch service, creating unhappy customers who may take their business elsewhere. 

The proof is in the pudding

Sure, this concept makes sense, but where’s the proof it’s more just than a theory? Glad you asked.

A Glassdoor study set out to answer the following question: “Can companies help to achieve high customer satisfaction by investing in employees and ensuring that those who deliver goods and services are themselves satisfied with their jobs?”

Using Glassdoor employee reviews and American Customer Satisfaction Index (ACSI) ratings, the study found a “strong statistical link” between employee and customer satisfaction. According to the study, every one-star improvement in an organization’s Glassdoor rating correlated to a 1.3-point (out of 100) increase in customer satisfaction scores. 

 

Happier workers enhance an organization’s ability to offer better customer satisfaction. This was especially evident for retail, restaurants, travel, and other industries with routine interaction between worker and customer. At the time, Southwest and Hilton topped the list in the travel space, while Costco and Trader Joe’s stood out among retailers as having both high employee satisfaction and customer satisfaction. 

Currently, Southwest shares the number one customer satisfaction spot among airlines, while Hilton takes the lead outright among hotels, per our latest Travel Report. Meanwhile, Costco outpaces all department and discount stores in customer satisfaction for a fifth straight year with a score of 81 (out of 100), according to our most recent Retail Consumer and Shipping Report. Trader Joe’s also leads supermarkets and the entire retail sector with a score of 84.

Satisfying your employees will pay off

What does it take to make employees happier? 

Is it the money? Costco, Amazon, Wayfair, and more all increased minimum wage to over $15 an hour. What about focusing on employees’ mental well-being, cultivating a better work-life balance, or offering better perks like unlimited PTO?

Each of these elements is sure to entice employees. But just as one thing isn’t going to suddenly spark improved customer satisfaction, the same is likely true for employee satisfaction. 

What’s important is that, as you think of all the ways to improve customer satisfaction, you remember to keep your employees happy. Because if you don’t, it won’t be good for anyone. 

The Ever Given, the 220-ton cargo ship that can carry 20,000 containers, is no longer wedged in the Suez Canal. That’s the good news. The bad news? The six-day blockage of one of the world’s largest container vessels could have long-lasting ramifications.

According to Northeastern University professor of political science Stephen Flynn, “The disruption of a week of this size is going to continue to have cascading effects … it’s got to be at least 60 days before things get sorted out and appear to be a bit back to normal.” 

Ports will see added congestion, and ships will be thrown off their usual schedule. And worse, supply chains, which had already been heavily disrupted since the beginning of the COVID-19 pandemic from a worldwide container shortage, will be further compromised. Eventually, the consumer is going to bear the brunt of this dilemma in the form of higher prices. 

When this inevitably comes to fruition, customers, who have dealt with their fair share of goods shortages over the past year, are not going to be enthusiastic about the additional strain on their wallets.

It starts with freight costs

The reason consumers will be facing rising costs of goods stems from increased freight costs. 

Over 80% of global trade is transported by sea. And supply chain disruptions have made this process much more expensive. 

In June 2020, the average cost to ship a 40-foot container was $1,040. On March 1, 2021, that number soared to $4,570, per S&P Global Platts. This caused container shipping costs of U.S. imports to jump from $2 billion in February 2020 to $5.2 billion in February 2021, according to S&P Global Panjiva.

“At the moment a lot of these costs are within the supply chains,” said Chris Rogers, a research analyst at S&P Global Panjiva. “I think it’s inevitable that it will be passed on to consumers — it’s just going to take time.” 

Supply shortages already a problem

Peloton has experienced the double-edged sword of high demand. While customers crave the bike and exercise equipment, they get equally enraged when these products are delayed, or worse, don’t show up at all. According to a New York Times report, Peloton customer service can’t help much of the time.

But Peloton isn’t the only retailer feeling the supply chain squeeze.

Despite leading department and discount stores in customer satisfaction for the fifth straight year with a score of 81 (out of 100), per the most recent Retail and Consumer Shipping Report, Costco is having difficulty stocking imported cheese and patio furniture. Its customer satisfaction has also decreased 2% year over year.

Meanwhile, Dollar Tree, which also experienced slumping satisfaction, down 4% to 74, reveals its supply chains have “been stressed.” According to CEO Gary Philbin, the retailer has “$1 billion in the pipeline somewhere,” and more products are on their way. Foot Locker’s inventory was down nearly 24% at the end of Q4 because of port congestion. 

The list goes on and on.

The biggest loser in all this is going to be the consumer, who may be forced to pay more for high-demand products on short supply.

What can businesses do to soften the blow to their customers?

Manufactured goods like food items and appliances typically score higher for customer satisfaction than service-oriented businesses, like banks, airlines, or subscription TV. But delivery delays and rising prices threaten that favorable position. 

The last thing companies need in these trying times is for customer satisfaction to wane amid frustration with supply chain issues. The question is what can businesses do to soften the blow?

Peloton’s answer is to invest $100 million into air cargo in the hopes of speeding up delivery. Said Peloton CEO John Foley: 

“On average, in the coming months, we will be incurring a transportation and delivery cost that is over ten times our usual cost per Bike and Tread, including, in many cases, shipping them by air instead of by sea. We are making this investment because we are as frustrated as you are that you don’t have your Peloton Bike or Tread yet.”

While this investment might not be enough to curb the current crisis, it’s a step in the right direction. Customers want to believe their voices are being heard and businesses are taking steps to fix the problem. Organizations that fail to even address the issue are going to struggle to maintain the trust of their customers. This could cost them now and in the future.

Consumers should expect to see the price of goods go up. But businesses – especially retailers – have a responsibility to try to lessen the effect. Those that do will, hopefully, earn the patience, respect, and good will of their customers. Those that don’t, well, your brand reputation will be like that of the Ever Given in the Suez Canal: in need of a rescue.