New Oracle Survey Says Customer Service Still Key to Retail

4 minute read
Dan Berthiaume avatar

Despite an industry emphasis on delivering a broad “customer experience,” personalization and the use of emerging sales channels like social, providing good customer service is still the most important driver of retail success. This is the main finding of Oracle's new survey -- The Evolution of Experience Retailing.


Combating the ‘Amazon Effect’

The Oracle survey identifies customer service, or direct interaction with a store associate, as the best means traditional retailers have to combat the “Amazon effect.” Amazon has become the world’s highest-grossing online retailer and is estimated to contribute 15-20% of global retail sales. Amazon enjoys significant advantages in assortment, delivery, convenience and product reviews and does not engage in traditional customer service.

Fortunately for traditional retailers, the survey identifies good customer service as the most important aspect of retail for consumers in all countries covered -- Brazil, China, Germany, Japan, Russia, UK and US. Virtually all (98%) consumers in Brazil and China listed good customer service as very or fairly important, with around 90% of consumers in all other countries except Japan (75%) saying good customer service is very or fairly important.

Generally speaking, bad customer service is seen as stemming from unfriendly, unhelpful and uninformed staff, as well as from not having desired products in stock. Good customer service includes quick and easy payment, an uncomplicated returns process, expert staff and product availability.

While good customer service can be an important differentiator in competing with the “Amazon Effect,” bad customer service can have disastrous results. For example, only 39% of respondents would give a company a second chance after bad customer service and 53% would switch to a competitor right away.

Customer Experience Perception Varies

Consumers generally view customer experience as less important than customer service, although that perception varies more by country than perception of customer service. Consumers in Brazil (96%) and China (90%) were most likely to rate customer experience as very or fairly important, while roughly 70-75 percent of consumers in most other countries besides Japan did so. Only 32% of Japanese consumers said customer experience is very or fairly important, which Oracle says, indicates customer experience is less important in established markets.

Online customer experience primarily means ease and convenience of navigation and shopping, while offline customer experience relates to product showcases and vibrant, engaging store environments. 

Learning Opportunities

Personalization Surprisingly Unimportant

Although the Internet is usually thought of as an agent for ultrapersonalized customer interactions, survey results show that outside of Brazil (94%) and China (87%), personalization is not seen as especially important. Less than 50% of consumers in the US, UK, Germany and Russia rate personalization as very or fairly important and only 24% of Japanese consumers do so. However, Oracle cautions these results may reflect a scarcity of retailers offering advanced personalization more than a lack of consumer interest.

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Consumers Will Share Info for Reward

Consumers are generally reluctant to share personal information with retailers, and when they do share information, they want to initiate contact. However, consumer interest in sharing information (even when retailers initiate contact) notably improves when they get something in return. Survey data indicates that lower prices are the most attractive reward for sharing information, followed by providing a safe/secure retail environment. Exclusive and relevant offers were of most interest to consumers in developed markets.

Social Still Emerging Trend

Survey results demonstrate that social media is not yet a major retail platform, but soon will be. Approximately half of respondents from Germany, Japan and the US do not use social networks and believe that recommendations via these channels are unimportant. Brazilian and Chinese consumers are more likely to use/rely on social networks in shopping, showing a lower dependence on emerging technologies for shopping in established markets.

However, Oracle cites data that Facebook fans of a brand spend up to 117 percent more than non-fans and the general exploding popularity of social media as signs pointing to a not-too-distant future where social media plays a major role in shopping behavior of consumers in all markets.

In August 2012, 3,577 male and female consumers between 18 and 60 years old from Brazil, China, Germany, Japan, Russia, UK and US were interviewed for the ‘Evolution of Experience Retailing’ survey on their views to fundamental retail principles, including customer service, overall experience, preferences and shopping trends and attitudes to technology in the retail process.

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