Wednesday, April 23, 2008

Wal-Mart's poor customer service may threaten its future

The new quarterly results from The University of Michigan's American Customer Satisfaction Index (ACSI) have been released. Among the brokerages, Fidelity is tops, followed by Schwab, TD Ameritrade and E*TRADE. When it comes to online retail, Amazon is tops, followed closely by In banking, Wachovia remains on top, while CitiGroup and Wells-Fargo come in at the bottom of the heap. The department/discounter store field was dominated by Nordstrom. Wal-Mart came in last! In the specialty retail category, Barnes & Noble was No. 1, Costco was No. 2 and in last place came Circuit City. The supermarket category was dominated by Publix, while Wal-Mart came in dead last. One clear trend emerges: Wal-Mart faces a real challenge when it comes to customer satisfaction.

Wal-Mart is ranked as the worst retailer and worst grocer when it comes to customer satisfaction, according to the latest ACSI survey. The irony is that people still shop there in huge numbers despite all the complaints. But that may not always be the case.
I know a lot of people hate Walmart for their dirty business strategies.

Before Wal-Mart was the largest retailer in the world, that title was held by Sears and then by Kmart. Both Sears and Kmart are today owned by Sears Holdings, which has now reported that its profits are down by nearly 50%. Sears Holdings' sales are declining rapidly, while cash on hand has dropped from $4 billion a year ago to $1.5 billion now. The marketplace spoke and this is the result.

The Wal-Mart haters have to realize that the marketplace will speak again if Wal-Mart doesn't improve its customer experience. Look at any industry. In the car field, GM used to own this country. Today, they're struggling to survive because they had a tin ear to the customer. The message is clear: If somebody doesn't take care of you, you must use your feet and take care of yourself by taking your business elsewhere.

Other Customer No-Service Companies include Wendy's, Lowe's, Home Depot, Old Navy, Adobe Systems, McDonalds, Sears, Belk (which aquired Parisian {God help us}), and Target.


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