EYE on RETAIL: The top shops for customer satisfaction | HBS Dealer

Retailers are preparing for a spending splurge this holiday season. New data from the American Customer Satisfaction Index’s (ACSI) Retail Holiday Preview offers helpful guidance and insights for those keen on cashing in.

Over the past nine months, retailers that have leaned into strategic discounting and seamless omnichannel experiences are thriving, while those that haven’t are not.

"In a climate of economic uncertainty, consumers are laser-focused on finding the best deals, whether they're shopping online or in-store,” said Forrest Morgeson, Associate Professor of Marketing at Michigan State University and Director of Research Emeritus at the ACSI. “The retailers that can deliver on both convenience and savings will be the ones that capture the most consumer dollars in the weeks ahead.”

Learning from winning retailers

Online sales are expected to surge between 7 and 9.5 percent this holiday season, yet customer satisfaction with the industry is steady with an ACSI score of 80.

The top online retailers include:

Chewy, up 1 percent since January when the annual 2024 retail study was released, headlines the group. Customers are satisfied with the company’s mobile app and both service and product quality. They are loyal to the brand and likely to recommend it to others.

Amazon is buoyed by its strong mobile app, website experience and merchandise variety and availability. Still, the e-commerce giant continues its quest to improve the shopping experience by integrating new technology to speed up delivery times and help customers make quicker buying decisions.

Best Buy is striking the right balance between quality and value, which has enabled it to climb to the top of the technology and office segment. Meanwhile, Home Depot’s plan to expand supply-chain facilities, increase technology expenditures, and improve the digital experience through its “One Home Depot” investment plan — a move that has also seen it partner with Instacart for same-day delivery — appears to be paying off. Customer satisfaction is up 3 percent to 79 since the 2024 study.

Pet Supplies Plus becomes specialty retail leader

Customer satisfaction with specialty retailers, specifically the brick-and-mortar shopping experience, maintains its 2024 score of 79. Segment winners include:

More than 65% of U.S. households have a pet, and Pet Supplies Plus has reaped the rewards, experiencing exponential growth in 2024. The specialty retail leader — with the highest overall retail score — receives glowing marks for staff courtesy and helpfulness as well as checkout speed.

Tractor Supply Company has established itself among the top specialty retailers because of its burgeoning in-store experience. The company receives high marks from customers for its store hours and locations, as well as its layout, cleanliness and in-store pickup. In addition, Tractor Supply Company has been gaining market share in part by focusing on popular brands for younger consumers and rolling out artificial intelligence (AI) technology to improve in-store operations.

Sam’s Club surges past prior leaders Costco and Macy’s to top general merchandise retailers

General merchandise retailers are the only ones to see improving customer satisfaction, up 1 percent to an ACSI score of 78.

Top performers include:

In the competitive world of warehouse clubs, Sam’s Club has usurped Costco — at least from a customer satisfaction standpoint. The checkout process and in-store pickup advantages are key factors. Sam’s Club has been piloting new technology to improve the receipt checking process and get customers out the door faster. It also offers a Scan & Go service so customers can skip lines altogether and curbside pickup regardless of membership tier ($4 fee each time for Club members, free for Plus members).

TJX has become a go-to spot for shoppers who want to purchase new clothes on a budget. This has helped the company cut into the market share of competitors like Macy’s and Target. It’s also become a hot spot for Gen Z, “who tend to be more concerned with snagging good, high-quality deals than shopping at high-end names.”

That’s not to say Target has lost its luster. It’s leaning heavily on discounting to attract and satisfy customers. Not only has the company lowered prices on over 5,000 popular items, “it introduced a new private-label basics line called dealworthy, with most of the 400 items priced under $10,” while also expanding the Good & Gather and Favorite Day brands.

The American Customer Satisfaction Index Retail Holiday Preview is based on 25,085 completed surveys from January 2024 to September 2024.