What Is Good Customer Service For Retail?

In our previous blog post What is good customer service?, EdgeTier explored how digital customer support is executed across UK contact centres. EdgeTier analysed the digital capabilities of over 200 brands on their email and chat support channels and presented our general findings along with benchmarks and suggestions on how to achieve best-in-class.

In this blog post EdgeTier will look specifically at retail and how the UK retail industry compares with both its competition and the overall industry average. EdgeTier will also outline industry benchmarks and suggestions on what it takes to provide best-in-class customer support.

The retail industry has changed dramatically over the past 10 years thanks to new marketing and sales channels reducing the barrier for entry, with emerging companies actively competing with large behemoths. Online sales continue to grow, with 21% of total retail sales now coming from online purchases, despite widespread brick and mortar store closure in the UK. While the retail industry has consistently grown over the past 10 years, 2019 had the lowest rate of growth in the U.K. since 2010, mainly caused by an uncertainty over brexit. A potential recession on the horizon will further challenge an already low margin industry. 

The retail industry landscape is naturally quite competitive and constantly evolving. Providing good customer service is a key revenue driver both in terms of customer retention, as well as attracting new customers. As reported in the Harvard Business Review, companies at the top of their industries in Net Promoter Scores or satisfaction rankings grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over a 10 year period. McKinsey also highlight the importance of good customer care, stating that personalisation at scale delivered through customer service can drive between 5% and 15% revenue growth for companies.

Despite the clear importance of good quality customer service amongst retail companies, this report outlines some large disparities in the approach to digital customer service between the retail industry versus other industries, as well as between companies within the retail industry. 

What digital support channels do retail companies offer?

Email is by far the most popular method of digital support across the retail industry. 93% of the retail companies examined offer support over email. This is slightly higher than the overall cross-industry uptake in email, which is 86%. 

For live-chat, 32% of retail companies implemented live chat support on their customer facing pages. This is in line with the overall live-chat uptake across all industries of 31%.

how fast do retail companies respond?

There is a large disparity between response times of companies in the retail industry. Examining the email channel first, a large cohort of companies, corresponding to 37% of all retail companies, respond within 3 business hours of receiving an email.

A further 33% of companies responded within 24 hours, with the vast majority of those taking approximately 8 hours to respond. A small number of companies (4%) took between 24 and 48 hours to respond, while 26% of companies took longer than 48 hours to respond or did not respond at all. 

The fastest retail company took under 5 minutes to respond to an email, with an impressive 22% of companies responding within one hour. Indeed, high-achieving retail companies excel at delivering email support with 19% of companies responding within 11 minutes of receiving the query. 

The retail industry email response times compare favourably to the cross-industry email response times where, for example, only 14% of companies will respond within an hour. 

Of the companies who took over 2 days to respond, 38% are e-commerce fashion brands, indicating quite poor customer experience for customers purchasing clothes online. 

56% of retail companies answered a chat support query in under one minute (when compared to 55% of all companies), showing that the retail and distribution industry is in line with the cross-industry average when it comes to chat customer service. The longest response time for chat was over 10 minutes (coming from a technology retailer), while the fastest response time was 40 seconds (a homeware retailer). 

What does it take to be best-in-class for retail?

In order to determine best in class performance, the top 10% of retail companies were evaluated. On the chat channel, the top 10% of companies responded within 50 seconds of initiating a chat. Over email, the top 10% of companies responded within 10 minutes of the email being sent. 

The email response times in particular illustrate how competitive the retail industry is, and how some companies are successfully differentiating on the efficiency of their customer care. Regularly achieving email response times of less than 10 minutes is certainly challenging for many customer service organisations, yet that is the bar that is now set by the industry.  

final thoughts on the retail industry

In a high-volume and increasingly digital-based retail industry, efficient and high quality customer care is of utmost importance. A number of companies in the retail sector are actively competing on customer service and there is a widening gap between the haves and have nots. The high performing retail companies excel at delivering customer care, offering rapid responses to queries across both email and chat digital channels virtually instantly. The poor performing retail companies will take days to respond to a query. 

Differentiating based on customer service is one of the only ways for a retail company to stand out from competitors. Leaving a customer to wait for responses to their queries is a sure way to drive down customer satisfaction scores and push that customer towards an ample set of competitors. Customers have become used to receiving instant, high quality answers from many other industries and there are large gains to be made by retail companies who strive for this.

EdgeTier will continue to study companies in order to understand contact centre needs and improvements – if you would like to learn more you can get in touch through our website www.edgetier.com or email us directly on info@edgetier.com.

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