Shopper
Consumers Pick Their Top Stores
the 3rd annual
Chain Store Age / Cap Gemini Ernst & Young
report
How Stores
Measure Up
in Delivering
the Shopping
Experience
the 2003
consumer awards
regional and national winners
The
Shopping
Experience
Transforming
Shopper
the 2003
report
W
elcome to the 3rd Annual Shopper Report, a joint venture between
Cap Gemini Ernst & Young and Chain Store Age. The companies
honored in this year’s report understand what it takes to operate successfully in
an increasingly volatile and challenging retail environment, where consumer
satisfaction with the shopping experience is slipping and consumer loyalty is
ever more fickle. It’s an environment in which finding the right balance of key
retail attributes—access, price, product, service, experience—is critical
to success.
Read on to discover why dollar stores and other extreme-value retailers are
gaining ground, why many traditional retailers continue to struggle at the
hands of Wal-Mart and Target, and why companies may need to turn to new
tools to improve their connectivity to consumers.
We invite you to listen to feedback from more than 6,000 consumers from
across the United States, as we honor the chains that their customers most
enjoy. Learn why the efforts of these retailers to elevate the shopping experience have led to strong customer satisfaction and loyalty. Then use those
insights in your own execution and planning for success.
Sincerely,
Emiel van Schaik
Vice President
Global Consumer Products and Retail Leader
Cap Gemini Ernst & Young
Murray Forseter
Editor and Publisher
Chain Store Age
What are consumers looking for from
their shopping experience? Which
retailers are delivering the right kind
of experience? And what will it take
for the laggards to transform their instore experience to meet the needs of
today’s demanding shoppers?
performance standards in the areas of
access, price, product, service,
experience and trust. Some of their
answers may be expected—but others
may surprise you, as consumers search
for stores that deliver the right
shopping experience.
The editors of Chain Store Age and
the leaders of the Consumer Products
and Retail practice of Cap Gemini
Ernst & Young (CGE&Y) teamed with
Leo J. Shapiro & Associates to ask
more than 6,000 consumers which
retailers best meet shoppers’
This article examines consumers’ picks
for the regional and national retail
winners of the 2003 Consumer
Awards, and chronicles survey findings
that help give companies insights into
the demands of today’s shoppers and
how to keep them coming back.
Customer loyalty often hinges on a
retailer’s ability to provide differentiated
service or a unique shopping experience.
C
ustomer satisfaction and
customer loyalty—they
represent the twin Holy Grails
for retailers struggling to maintain both
top-line and bottom-line growth in
today’s volatile marketplace.
Clearly, the winning retailers in this
year’s Shopper Report understand
what it takes to keep their customers
happy—and loyal. Yet, evidence
exists that consumer satisfaction with
the in-store experience is not all that
it should be, making loyalty more
fleeting than ever.
Consider, for example, that a
number of new winners rose to the
surface this year, while others faded,
demonstrating that customer loyalty
is up for grabs. Signs of consumer
migration were apparent in the high
grades awarded to companies such as
L.S. Ayres, Fashion Bug, Wegmans,
Family Dollar, Savon and Big Lots,
all newly minted winners this year.
3a
OVERALL CATEGORY WINNERS
Department Stores
Nordstrom
Clothing Stores
Old Navy
Discount Stores
Family Dollar
Drug Stores
Savon
Electronics Stores
Target
Grocery Stores
H-E-B
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
EASY TO SHOP
Best-Performing Chain
Department
Clothing
Discount
Drug
Electronics
Grocery
The 2003 Shopper Report, based
on more than 6,000 household
interviews conducted for Chain
Store Age and Cap Gemini Ernst &
Young by Leo J. Shapiro &
Associates, revealed a number of
key trends:
(access)
Northeast
Channel
The awards captured by smaller local
and regional retail chains make it
clear that size and excellence are not
necessarily related. They also
demonstrate the challenge that
retailers face as they become multiregional or national chains. And they
may point to the emergence of a few
hairline cracks in the armor of
perennial winner Wal-Mart.
Midwest
South
West
New England
Mid-Atlantic
East North
Central
West North
Central
South Atlantic
East South
Central
West South
Central
Mountain
Pacific
U.S.
Wal-Mart
(Kohl’s)
Kohl’s
Meijer
(L.S. Ayres)
Target
(JCPenney)
Dillard’s
Kohl’s
Foley’s
Dillard’s
Nordstrom
Nordstrom
Fashion Bug
Old Navy
Target
Big Lots
Brooks
Wal-Mart
(Circuit City)
Price Chopper
Old Navy
Fashion Bug
Sam’s Club
Target
Wal-Mart
(Duane Reade)
Rite Aid
Circuit City
H.H. Gregg
Weiss
Aldi
Gap
Foot Locker
Target
Target
Wal-Mart
(Osco)
Walgreens
Wal-Mart
(Circuit City)
Wal-Mart
(Circuit City)
Shop ’n Save
Cato’s
Foot Locker
(Payless ShoeSource)
Nordstrom
Nordstrom
(Old Navy)
Big Lots
Target
Big Lots
Target
Kmart
(Rite Aid)
Walgreens
Wal-Mart
(Osco)
Savon
Savon
Wal-Mart
(RadioShack)
Circuit City
Fry’s
Best Buy
Harris Teeter
IGA
Albertsons
WinCo
WinCo
Target
(Circuit City)
Save-A-Lot
Winning stores in each region were chosen based on evaluations submitted by each store’s customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or WalMart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
4a
• Dollar stores and other extremevalue retailers are gaining
ground as consumers search for
fair and honest prices in an
uncertain economy.
• Traditional retailers in channels
such as electronics and
department stores continue to
face an uphill struggle against
general merchants.
• Kmart’s narrow window of
opportunity to build on a small
but loyal core customer base that
was identified in last year’s report
appears to be closing, as the
discounter fades from the ranks
of winning retailers.
• Growing frustration with the
in-store experience is causing
consumers to search for
shopping alternatives.
• With labor shortages continuing
to plague the industry, retailers
may need to turn to technology
tools that can help them improve
the in-store shopping experience.
Extreme-Value
Retailing Comes
of Age
This year’s study shows that
excellence is never out of reach for a
retailer. Three-fourths of the awards
were captured by stores that did not
win last year. While many of these
retailers were in second or third
position previously, others were
barely on the radar screen.
Take the case of dollar stores and
other extreme-value retailers.
Family Dollar, Dollar General,
Big Lots and Sam’s Club all rose
to the top in the discount channel
this year. While the number of
customers shopping these stores
was smaller than those shopping
giant discounters such as WalMart and Target, their grades were
consistently strong. Family
Dollar’s high ratings made it the
overall winner among discounters.
Not surprisingly, the strength of
many of these retailers was
particularly pronounced in the
price category, likely reflecting
consumers’ concerns about the
economy. In fact, the dollar stores
and Big Lots all received higher
grades than Wal-Mart and Target
in the area of price.
Yet, these stores are not only
about price. They also received
solid grades for secondary
attributes such as trust and access,
perhaps reflecting some signs of
consumer weariness with
cavernous supercenters. In
addition, many of the dollar store
chains have made efforts to
expand their mix of both products
and prices, thereby broadening
their appeal to consumers.
Survey Methodology
Chain Store Age and Cap Gemini
Ernst & Young commissioned Leo J.
Shapiro & Associates to interview
6,000 households by telephone,
using a pre-recorded questionnaire,
during January and February 2003.
The survey covered six trade classes:
department stores, specialty
clothing/shoe stores, discounters,
drug stores, electronics stores and
grocery/supermarkets. For each
trade class, respondents identified
the store in which they shopped
most and then graded it on the basis
of “A” to “F” on six attributes that
comprise the shopping experience—
access (ease of shopping), price,
product assortment, service, making
shopping enjoyable (experience)
and trust.
The regional and national retailer
awards are based on the percentage
of a store’s customers who graded it
an “A,” with mean scores used to
break a tie or narrow gap. Regional
awards conform to the nine census
regions of the continental United
States. Awards went to retailers that
scored best on each of the
aforementioned shopping
The emergence of the dollar store
chains can also be attributed to
their recent growth in store
numbers. In most cases, dollar
stores have been adding new units
at a faster pace than have mass
merchants. According to research
by ACNielsen, dollar stores have
shown gains in both the
percentage of households that
shop in the channel and in the
experience attributes.
Interviews were stratified by region
to ensure a statistically sufficient
base for even the smallest regions.
The interviews were conducted with
a cross-section of U.S. households.
In each household, an adult who
had shopped at a retail store within
the past 30 days was interviewed.
5a
Could the growing strength of these
extreme-value retailers signal a hint
of potential vulnerability on the part
of titans such as Wal-Mart and
Target? It’s probably too early to
tell, but the presence of many
smaller retailers among this year’s
winners reminds us that when a
store stands still, even in the case of
a strong performer, aggressive
competitors will attempt to raise the
bar of excellence.
Discounters Continue
to Take Market Share
Despite the headway being made
by dollar-type stores, the strength
of the mass merchants should not
be underestimated. In last year’s
Shopper Report, channel
descriptions were kept open-
ended, allowing consumers to act
essentially as “free agents,”
defining stores based on their
needs and their use. The results
demonstrated the significant
impact of “channel blurring,” with
discounters dominating many
channels. The impact was
particularly pronounced in the
department store and specialty
clothing/shoe categories, where
over and over consumers identified
Wal-Mart and Target as the stores
in which they shopped most often
in these two channels.
As part of the evolution of the
Shopper Report, the definitions of
these two channels were made
more specific this year in order to
test the strength of the channel
blurring that had stood out the
prior year. The result was an
increase in the percentage of
consumers pointing to traditional
retailers in these channels. Of
PRICE
Northeast
Channel
Department
Best-Performing Chain
number of trips consumers take
to them each year.
Clothing
Discount
Drug
Electronics
Grocery
Midwest
South
West
New England
Mid-Atlantic
East North
Central
West North
Central
South Atlantic
East South
Central
West South
Central
Mountain
Pacific
U.S.
Wal-Mart
(JCPenney)
Wal-Mart
(JCPenney)
Meijer
(L.S. Ayres)
Sears
Kmart
(Macy’s)
Kohl’s
Foley’s
Target
(Sears)
Wal-Mart
(The Bon Marché)
Wal-Mart
(Kohl’s)
Kohl’s
Kohl’s
(Old Navy)
Old Navy
Old Navy
Cato’s
Gap
Old Navy
Payless ShoeSource
Family Dollar
Big Lots
Dollar General
Wal-Mart
Dollar General
Dollar General
Big Lots
Costco
Big Lots
Dollar General
Brooks
Duane Reade
Rite Aid
Osco
Rite Aid
Kroger
(CVS)
Eckerd
Savon
Wal-Mart
(Savon)
Savon
Wal-Mart
(Best Buy)
Wal-Mart
(Best Buy)
Wal-Mart
(H.H. Gregg)
Wal-Mart
(Circuit City)
Wal-Mart
(Best Buy)
Wal-Mart
(Circuit City)
Wal-Mart
(Circuit City)
Fry’s
Fry’s
Wal-Mart
(Best Buy)
Market Basket
Weiss
Aldi
Shop ’n Save
Wal-Mart
(Kroger)
Save-A-Lot
H-E-B
WinCo
WinCo
Save-A-Lot
(Payless ShoeSource)
Payless ShoeSource Payless ShoeSource
Winning stores in each region were chosen based on evaluations submitted by each store's customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or
Wal-Mart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
What a Difference Demographics Make
from this year’s Shopper Report
is smallest for electronics stores and grocery
stores, and greatest for department and clothing
stores.
provides important insight into how
Age: Older customers (ages 50 and up) give
consumers from different segments of
higher ratings for trustworthiness across all retail
channels with the exception of electronics stores,
for which they are on par with those younger
than 35. Older customers award the highest
grades on all attributes for drug stores, while
younger shoppers give the highest ratings on all
attributes for electronics stores.
A deep dive into the demographic data
the population view retailers.
Gender: Women across all channels and attributes
tend to rate retailers higher than do men. That was
especially true in the areas of shopping enjoyment
and trustworthiness. The gender difference in ratings
6a
Ethnicity: Overall, the data indicate that
Hispanics are generally more satisfied with stores
than are African-Americans. Collectively, these two
segments are more satisfied with retailers than are
Caucasians, except when it comes to clothing and
department stores.
Education:
As education level increases, store
ratings decrease. Without exception, customers who
are college graduates give the lowest ratings across
all retail channels for all attributes.
Type of area: Customers who live in suburban
locations tend to award lower grades than do
residents of cities, small towns or rural areas. The
differences in ratings between city and suburban
residents are greatest for clothing and drug
stores, and smallest for department and grocery
stores.
One general theme underlying the demographic
findings is that consumers with the most access
to and choice of retailers tend to be the least
satisfied with their stores. This demonstrates
the ability of competition to raise the standard
by which consumers evaluate stores. Consumers
who have many stores from which to choose are
generally less impressed by any single one than
are those with a limited selection of stores.
7a
The strength of many of the
extreme-value retailers was
particularly pronounced in
the price category, but they
also received solid grades
for secondary attributes
such as trust and access.
These results demonstrate the
tenacity of the consumer’s mindset
and make it clear beyond any
doubt that channel blurring has
simply become a fact of life in the
retail business.
While the discounters continue to
chip away at the department store
channel, several traditional
retailers in this trade class
performed well in the eyes of
consumers. Nordstrom held onto
its overall top spot, and Kohl’s
came on strong, capturing 15
awards this year, compared with
none the prior year. Nordstrom’s
strong focus on service and
experience has proved to be a
winning formula, as the chain
leads the department store channel
in both of those attributes.
Kohl’s emergence is not surprising
given the chain’s recent growth.
The company’s well-focused
strategy, strong differentiation and
price emphasis has given it the
ability to challenge discounters
such as Wal-Mart in the
department store arena.
In the electronics channel this year,
several regional chains, including
H.H. Gregg and Fry’s, received
high grades in certain areas of the
country. At the same time, mass
merchants posted a strong showing,
with Wal-Mart capturing many
regional awards in the electronics
channel and Target dominating on
an overall U.S. basis. Both
discounters are no doubt benefiting
from their heavy promotional
activity, including using CDs and
videos as loss leaders.
It’s important to keep in mind,
however, that while consumer
PRODUCT ASSORTMENT
Northeast
Channel
(always having the product you want)
Midwest
South
West
New England
Mid-Atlantic
East North
Central
West North
Central
South Atlantic
East South
Central
West South
Central
Mountain
Pacific
U.S.
Wal-Mart
(Kohl’s)
Kohl’s
L.S. Ayres
Target
(Sears)
Kmart
(Sears)
Kohl’s
Foley’s
Dillard’s
The Bon Marché
Nordstrom
Clothing
Fashion Bug
Kohl’s
(Old Navy)
Old Navy
Old Navy
Old Navy
Cato’s
Gap
Nordstrom
(Old Navy)
Old Navy
Discount
Family Dollar
Target
Dollar General
Wal-Mart
Family Dollar
Target
Wal-Mart
Wal-Mart
Wal-Mart
Wal-Mart
Brooks
Wal-Mart
(CVS)
Rite Aid
Wal-Mart
(Osco)
Wal-Mart
(Rite Aid)
Kroger
(Eckerd)
Eckerd
Wal-Mart
(Rite Aid)
Wal-Mart
(Savon)
Savon
Wal-Mart
(Circuit City)
Circuit City
H.H. Gregg
Circuit City
Wal-Mart
(Best Buy)
Wal-Mart
(Circuit City)
Circuit City
Fry’s
Fry’s
Wal-Mart
(Circuit City)
Big Y
Wegmans
Giant Eagle
Shop ’n Save
Wal-Mart
(Publix)
Food Lion
Kroger
Wal-Mart
(Smith’s)
WinCo
Hy-Vee
Department
Best-Performing Chain
greater note, however, is the fact
that the change was far smaller
than expected. In the case of the
specialty clothing/shoe channel,
while retailers such as Old Navy
and Payless ShoeSource received
high grades this year, threequarters of respondents still named
either a full-line department store
or a discounter as their store of
choice. And in the department
store channel, close to half of
consumers still identified a
discounter despite the more
explicit definition.
Drug
Electronics
Grocery
Payless ShoeSource
Winning stores in each region were chosen based on evaluations submitted by each store's customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or
Wal-Mart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
satisfaction with the mass
merchants in the electronics
category is high, traditional
retailers such as Best Buy and
RadioShack still grab a larger
number of electronics shoppers.
But that could slowly change as both
Wal-Mart and Target begin to add
The awards captured by smaller local
and regional retail chains this year
make it clear that size and excellence
are not necessarily related.
Kmart: A Study in Lost Loyalty?
One of the truest tests of customer loyalty
comes when a retailer faces severe challenges
such as bankruptcy and store closings. Judging
from this year’s Shopper Report, Kmart is
struggling to pass this test.
Last year’s findings uncovered a small, but loyal
8a
base of core Kmart customers. While the number
of shoppers in the survey claiming Kmart as the
discount store in which they shopped most
often last year was only about one-sixth that of
Wal-Mart, the percentage of Kmart shoppers
who graded it an “A” sometimes equaled or
even surpassed Wal-Mart.
What a difference a year makes. Kmart’s highly
publicized corporate struggles, as well as its
inability to strongly differentiate itself and live
up to shopper expectations in the store have had
an impact on customer satisfaction. While the
company showed a few scattered signs of
lingering strength, the overall grades awarded to
Kmart by shoppers dropped off this year. The
result is a significant gulf in ratings between
Kmart and its primary competitors Target and
Wal-Mart. Closing this gap may prove to be
difficult at this point, given the challenge of
convincing consumers that there’s a reason to
come back to Kmart.
9a
SERVICE
Northeast
Channel
Best-Performing Chain
Department
Clothing
New England
Mid-Atlantic
JCPenney
Kohl’s
Fashion Bug
Old Navy
Midwest
South
West
East North
Central
West North
Central
South Atlantic
East South
Central
West South
Central
Meijer
(L.S. Ayres)
Yonkers
JCPenney
Kohl’s
Foley’s
Old Navy
Payless ShoeSource
Gap
Old Navy
Cato’s
Mountain
Pacific
U.S.
Kmart
(JCPenney)
Nordstrom
Nordstrom
Old Navy
Payless ShoeSource
Old Navy
Discount
Target
Big Lots
Dollar General
Target
Family Dollar
Dollar General
Big Lots
Wal-Mart
Big Lots
Family Dollar
Drug
Brooks
Duane Reade
Rite Aid
Wal-Mart
(Walgreens)
Walgreens
Kroger
(Eckerd)
Eckerd
Wal-Mart
(Rite Aid)
Wal-Mart
(Savon)
Savon
Wal-Mart
(RadioShack)
RadioShack
H.H. Gregg
Circuit City
Wal-Mart
(RadioShack)
RadioShack
Circuit City
Circuit City
Wal-Mart
(RadioShack)
Sears
(RadioShack)
Big Y
Wegmans
Giant Eagle
Shop ’n Save
Harris Teeter
IGA
H-E-B
Safeway
Vons
Publix
Electronics
Grocery
Winning stores in each region were chosen based on evaluations submitted by each store's customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or
Wal-Mart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
higher-end electronics in selected
stores, allowing them to expand their
customer base in the electronics area.
The good news is that new
technology that can
elevate the in-store
experience is available
today and more is on the
horizon, and consumers
have indicated a
willingness to use it.
10a
In the drug store channel, Albertsons’
Savon chain takes top honors as the
overall winner, supplanting last
year’s leader Wal-Mart. Savon
received particularly high grades
from consumers in the areas of
experience and access. The
company’s access play is bolstered
by a multichannel approach that
includes its Savon.com program.
Emphasis is also placed on in-store
events such as health screenings,
diabetes classes and Hispanic health
in most markets, with Texas
powerhouse H-E-B as the overall
U.S. winner in grocery. Other
strong performers included
Wegmans, Aldi, Shop ’n Save,
Save-A-Lot, Hy-Vee, Publix, Piggly
Wiggly, IGA and WinCo.
fairs. The strong performance of
Savon also can be attributed at
least in part to the fact that
Albertsons has recently put
emphasis and resources against its
drug store operations overall.
Traditional retailers showed their
greatest strength in the grocery
channel. While Wal-Mart has
justifiably been the subject of
much strife among food retailers,
consumers continue to award the
higher grades to traditional
supermarket operators. In this
year’s Shopper Report, as in last
year’s, regional chains led the pack
Year-to-year fluctuation among the
winners’ ranks is quite apparent in the
grocery channel, which may be
attributable to the high degree of
competition and heavy emphasis on
marketing and promotional efforts.
A new marketing campaign can easily
cause customer loyalty to shift
from one supermarket to another.
Yet, even in this volatile environment,
grocery chains that deliver a consistent
strategy that is meaningful to
consumers are able to keep their
customers happy year after year. Take
Publix, for example. The Florida-based
chain has been the overall U.S.
supermarket winner in the service
category for three years running, one
of the few consistent award winners in
the grocery channel.
How to Make
the Grade:
Understand Your
Customers
While this year’s Shopper Report
honors a wide range of dynamic
retailers, other stores struggle to
maintain their shopper base.
What will it take for those
companies to make the grade in
today’s demanding retail world?
The first step is understanding the
consumer climate that exists and
acknowledging the frustrations
that consumers face when they
walk through the doors of many
retail stores. What’s most
important to consumers in their
shopping experience? Some key
factors were identified in recent
consumer research conducted for
Extended Retail Solutions (ERS),
a joint initiative from Cap
Gemini Ernst & Young, Intel and
Cisco Systems, designed to help
retailers improve flexibility and
customer service through a new,
open standards-based in-store
compute model. The leading
factors, cited by at least half of
consumers as “very important,”
were:
This year’s results
demonstrate the tenacity of
the consumer’s mindset and
make it clear beyond any
doubt that channel blurring
has simply become a fact of
life in the retail business.
• Having products priced the same
at checkout as on the item or shelf.
• Getting respectful treatment
from employees.
• Having prices visible on products
or shelves.
• Having the products you want to
purchase be in stock.
• Being able to return products to
the store without difficulty.
• Being able to communicate
with employees.
• Being able to find employees
to answer questions or assist
in purchase.
• Being able to get through
the checkout quickly and/or
without hassles.
• Being able to locate items in
the store.
• Having employees who are
knowledgeable about products
and/or the store.
The results confirmed earlier
11a
In-Store Frustrations
Cause Consumers to
“Walk”
It’s clear, however, that shoppers are
often not getting what they’re
looking for from the stores in
which they shop. Our ERS
research uncovered a high degree
of consumer frustration with the
shopping experience. The most
frequently cited frustrations were:
difficulty getting through the
checkout; lack of visible prices on
products or shelves; and difficulty
finding employees to answer their
questions or assist in a purchase.
Other top frustrations include a
lack of employee knowledge about
products and the store, out-ofstock products and difficulty
locating items in the store.
Nearly two-thirds of
consumers said frustrations
with the in-store experience
had caused them to stop
shopping or to shop
less frequently at a
particular store.
Given the importance of these
factors to shoppers, it’s no wonder
that customer loyalty is in
jeopardy. One of the most
significant findings of our ERS
research was the fact that nearly
two-thirds of consumers said
problems like these had caused
them to stop shopping or to shop
less frequently at a particular
store.
Further complicating matters is
the reality that consumers can find
virtually any product they want
from a wide range of retailers in
multiple channels, as evidenced by
12a
MAKING SHOPPING ENJOYABLE
the channel blurring so apparent
in this year’s Shopper Report
study. As a consequence, customer
loyalty often hinges on a retailer’s
ability to provide differentiated
service or a unique shopping
experience.
But in the face of chronic retail
labor shortages and razor-thin
margins, improving customer
service is a challenge for many
chains. How retailers address this
issue can be the key to transforming
the shopping experience.
Elevating the
Experience: Putting
Technology to Work
The good news is that new
technology that can elevate the
in-store experience and allow
employees to spend more time
helping customers is available
today and more is on the horizon,
including:
• Tools that can provide sales
associates with new product
information, customer interaction
techniques and access to general
information without taking them
off the sales floor.
• Mobile devices for accessing
customer information, product
location and count, product
information and sales suggestions,
performing POS transactions,
inventory spot checks and receiving.
• Customer self-service terminals,
both mobile and fixed, for those
Northeast
Channel
(experience)
Midwest
South
New England
Mid-Atlantic
East North
Central
West North
Central
South Atlantic
Kohl’s
Kohl’s
Meijer
L. S. Ayres
Target
(Yonkers)
Clothing
Fashion Bug
Old Navy
Old Navy
Discount
Family Dollar
Big Lots
Brooks
Department
Best-Performing Chain
findings uncovered during the course
of our Consumer Relevancy research,
as chronicled in previous years’
Shopper Reports.
Drug
Electronics
Grocery
West
East South
Central
West South
Central
Mountain
Pacific
U.S.
Kmart
(Dillard’s)
Kohl’s
Dillard’s
Dillard’s
Target
(Nordstrom)
Nordstrom
Payless ShoeSource
Fashion Bug
Old Navy
Foot Locker
Cato’s
Gap
Nordstrom
(Old Navy)
Nordstrom
(Old Navy)
Sam’s Club
Target
Target
Target
Big Lots
Target
Big Lots
Target
Wal-Mart
(Walgreens)
Rite Aid
Wal-Mart
(Osco)
Eckerd
Kmart
(Eckerd)
Eckerd
Wal-Mart
(Rite Aid)
Savon
Savon
Wal-Mart
(Circuit City)
Circuit City
H.H. Gregg
Circuit City
Wal-Mart
(Circuit City)
Sears
(Circuit City)
Wal-Mart
(Circuit City)
Fry’s
Best Buy
Target
(Circuit City)
Market Basket
Wegmans
Dominick’s
Shop ’n Save
Harris Teeter
IGA
Kroger
Safeway
WinCo
Piggy Wiggly
Winning stores in each region were chosen based on evaluations submitted by each store's customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or
Wal-Mart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
consumers who prefer to manage
their own experience.
Self-service may provide retailers
with the greatest opportunity to
improve the shopping experience.
For a number of years, retailers
have attempted to incorporate instore self-service solutions, with
varying degrees of success.
However, our ERS research makes
it clear that consumers today are
very open to using devices such as
rich-media customer service
terminals, smart screens and
dynamic, interactive signage. For
example, about two-thirds of
consumers surveyed said they
would use self-checkout, as well as
in-store technology to order a
product not available in the store.
Consumers also had a positive
response to self-service
applications throughout the store.
Almost three-quarters of those
surveyed would use devices
providing location of products in
the store, and more than twothirds would use devices showing
products needed for a specific project
and displaying product information.
13a
Surprisingly, this acceptance even
crossed age barriers. For example,
about half of those aged 65 and
older said they would use self-service
computer screens, if available, to
locate products in the store and to
display product information.
The research findings also indicated
that the presence of such features and
tools would impact consumers’
shopping habits in a variety of ways.
Close to half said they would be
more likely to shop in a store that
offered these kinds of services, and
more than half would spend more
time in the store during each visit.
And almost 50% said these features
might lead them to spend more
money in the store.
The key for retailers, of course, is to
make the most of consumers’
willingness to use these new types
of technology. Such technology, when
based on an open-standards
foundation, can have the added
benefit of allowing retailers to take
advantage of rapidly emerging
developments like Radio Frequency
Identification (RFID) and wireless
networking, as well as new industry
standards such as 14-character
product codes, Global Data
Synchronization and better encryption
for credit card transactions.
The extent to which retailers
are able to deliver a positive
shopping experience will
determine the degree of
customer satisfaction and
customer loyalty that they
engender—and will be the
ultimate driver of improved
sales and profitability.
Executive Takeaway: Critical Success Factors
TRUST
Northeast
Channel
New England
Mid-Atlantic
Midwest
East North
Central
West North
Central
South
South Atlantic
East South
Central
West
West South
Central
Mountain
Pacific
U.S.
Winning retailers such as those honored in this year’s Shopper Report understand that success begins with strategic
intent coupled with the ability to deliver the right in-store experience. If there’s a common denominator among
many of these operators it’s their capacity to translate a focused consumer-centric strategy into their operations.
To achieve this goal, chains must recognize that:
JCPenney
Kohl’s
Kmart
L. S. Ayres
Clothing
Fashion Bug
Old Navy
Old Navy
Payless ShoeSource
Gap
Sears
(Old Navy)
(Payless ShoeSource)
Discount
Family Dollar
Big Lots
Sam’s Club
Target
Sam’s Club
Sam’s Club
Brooks
Walgreens
Rite Aid
Wal-Mart
(Osco)
Eckerd
Electronics
Wal-Mart
(RadioShack)
RadioShack
H.H. Gregg
Wal-Mart
(Circuit City)
Grocery
Shop ’n Save
Wegmans
Aldi
IGA
Best-Performing Chain
Department
Drug
Yonkers
Kmart
(Dillard’s)
Kohl’s
Foley’s
Dillard’s
Nordstrom
Nordstrom
Gap
Old Navy
Gap
Big Lots
Costco
Costco
Sam’s Club
Kroger
(Rite Aid)
Walgreens
Wal-Mart
(Osco)
Wal-Mart
(Savon)
Savon
Wal-Mart
(Circuit City)
Wal-Mart
(RadioShack)
Wal-Mart
(RadioShack)
Fry’s
Wal-Mart
(Best Buy)
Target
(RadioShack)
Harris Teeter
IGA
H-E-B
WinCo
WinCo
IGA
JCPenney
• Consumers have become increasingly demanding and frustrated with their in-store shopping experience.
• Consumers will reward retailers that help them save time, make the in-store experience easier and treat them with respect,
honesty and fairness.
• Increased competition is driving the need for higher service levels and greater differentiation.
• Labor issues continue to plague the retail industry and impact service.
• A major shift is beginning with consumers showing willingness to use in-store technology that can improve the shopping
experience and reduce labor costs.
• Aligning strategic intent with technology deployment can create capabilities that consumers notice and appreciate.
Which brings us back to the twin Holy Grails. The extent to which retailers are able to deliver a positive shopping experience will
determine the degree of customer satisfaction and customer loyalty that they engender—and will be the ultimate driver of improved
sales and profitability.
About Cap Gemini Ernst & Young
Winning stores in each region were chosen based on evaluations submitted by each store's customers. Retailers were placed in various classes of trade in each
U.S. Census Department geographic region by the way consumers defined a store. For example, some consumers considered Nordstrom a clothing store, or
Wal-Mart an electronics store. If a store not fitting the traditional industry classification won a regional or national award, the name of the closest-ranking
traditional store was included in parentheses. Based on its overall U.S score, a company could win a national award even without winning any region. In the
case of a tie, both winners are listed in bold black type.
Source: Leo J. Shapiro & Associates LLC for Chain Store Age/Cap Gemini Ernst & Young
14a
Cap Gemini Ernst & Young (CGE&Y) has one of the largest global practices focused on helping companies in Manufacturing,
Retail and Distribution (MRD) industries transform their businesses by driving revenue, margin and shareholder value while
helping them adapt to market volatility. CGE&Y’s retail practice helps companies address critical industry issues such as Global
Data Synchronization and collaborative business processes and take advantage of technology opportunities through initiatives
like Extended Retail Solutions (ERS) and Radio Frequency Identification (RFID). To learn more or to access previous years’
Shopper Reports, click on “industries” at www.cgey.com.
15a