In the wake of the recession, retailers bent over backward to get customers into stores and opening wallets. Now they’re trying to pull back on perks that hurt the bottom line, but customers have noticed and they’re not pleased, according to a recent survey on customer satisfaction.
“As we see slow improvement, people aren’t quite as nervous about spending as they were, but they also have a little higher expectations. Companies know people are ready to spend, so they’re not as generous with discounts,” said David VanAmburg, director of the American Customer Satisfaction Index.
In 2013, customers reported greater satisfaction with retail sector businesses than in any year since the retail survey began in 1995, according to the ACSI report. In the two years since, sector wide marks dropped about 4 percent on ACSI’s 100-point scale.
The sole exception is gas stations, where cheap fuel prices made for happier customers in 2015, according to the ACSI.
But VanAmburg said the overall harsher ratings are really just a return to customers’ prerecession expectations.
“It looks like what’s really the anomaly is the past couple of years, when things were higher than ever before,” VanAmburg said. “There was a period where we said let’s all get along, and now things are returning to where they were.”
Over the past few years, companies have offered steep discounts to get people to spend. Employees nervous about layoffs and rising unemployment may have been trying to improve customer service. And customers, recognizing the tight times, may have been a little more forgiving, VanAmburg said.
Many retailers did end up offering big discounts over the shopping season, trying to draw in customers after a sluggish start to the season.
At Target, aggressive promotions boosted fourth-quarter sales, particularly online, but also took a toll on its gross margin rate, which was down to 27.9 percent from 28.5 percent during the same period last year, the company said in a report on quarterly earnings released last month.
Nordstrom executives said promotions hurt the company’s profit margins during a call with analysts to discuss fourth-quarter earnings earlier last month. The company would rather avoid storewide clearance discounts but feels pressure to compete with other retailers and match prices, Co-president Pete Nordstrom said.
Exclusive brands — including the company’s own labels — could help Nordstrom “control our own destiny” when it comes to offering deals, executives said.
Some stores earned high customer satisfaction marks without using sales to woo shoppers. L Brands — with, Bath & Body Works and Pink — tied with Costco as the ACSI survey’s top-rated specialty retailer despite resisting discounting products over the shopping season. L Brands reported a net sales increase of 8 percent for the fourth quarter of 2015.