I know my ranting about the pending demise of the big box retail format sounds crazy, but the facts are getting harder and harder to ignore.
The National Retail Federation just released the preliminary results of a survey where 8,500 respondents where asked about the customer service provided by retailers.
The retailer with the best service? Amazon. In fact, 7 of the top ten retailers don’t even have stores.
Details, such as they are, are here:
http://www.thestreet.com/story/10627227/1/amazon-kohls-top-for-customer-service.html?cm_ven=GOOGLEFI
None of the top ten are big box stores and I don’t yet know where they fall on the list, the full results won’t be released until January.
So just how important is customer service?
The top two retailers on the list, Amazon and Kohls, both posted great third quarter results in what may be the worst retail environment of the modern era. Amazon had a 69% increase in profits while sales rose 28%. Kohls posted a 20% increase third quarter profits and a 2.4% increase in same store sales.
Meanwhile, back in the big box, Lowe’s saw a 30% decrease in profits, Home depot was down 8.9%, Target held on with an 18% gain and Wal-Mart answered back by pledging to cut prices, yet gain, on 60 hot selling items for the holidays.
Holidays which, by the way, have started even earlier than ever. Black Friday sales started this week, a week before Black Friday, in Wal-Mart and Sears. Other big boxers are expected to follow suit.
What will the effect of this increase in price cutting have on future earnings? We’ll have to wait and see, but it just can’t be good.
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