ANN ARBOR, Mich.--(BUSINESS WIRE)--The holiday season will be here before you know it, and retailers are preparing for a big year.
All signs point toward burgeoning consumer spending. Retail sales were up 0.4% from August to September — increasing for the third straight month — and holiday spending is projected to reach anywhere from $979.5 billion to $989 billion in November and December — up 2.5% to 3.5% year over year.
Year to date, customer satisfaction with the retail sector overall is 78.6 (out of 100), according to the American Customer Satisfaction Index’s (ACSI®) Retail Holiday Preview. 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.”
Chewy chews up online retail competition
Online sales are expected to surge between 7.0% and 9.5% this holiday season, yet customer satisfaction with the industry is steady with an ACSI score of 80.
The top online retailers include:
- Apparel and shoes: Nordstrom (79)
- Home improvement and décor: Home Depot (79)
- Multimarket: Amazon (83)
- Specialty: Chewy (85)
- Technology and office: Best Buy (77)
Chewy, up 1% 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% 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:
- Apparel: American Eagle Outfitters (79)
- Automotive: O’Reilly Auto Parts (80)
- Hardware and home improvement: Tractor Supply Company (85)
- Hobby and home: Hobby Lobby (82)
- Personal care and accessories: Ulta Beauty (83)
- Pet care: Pet Supplies Plus (86)
- Sporting goods and sports apparel: Dick’s Sporting Goods, Foot Locker (80)
- Technology and office: Best Buy (81)
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 store hours and locations are super convenient, the layout and cleanliness are top notch, and the in-store pickup is best in class. 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.
While American Eagle Outfitters and O’Reilly Auto Parts continue to lead their respective segments, both have slipped since the January retail study.
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% to an ACSI score of 78.
Top performers include:
- Department stores: Macy’s (82)
- Discount stores: TJX (Marshalls, TJ Maxx) (82)
- Hypermarkets: Target (80)
- Warehouse clubs: Sam’s Club (Walmart) (85)
In the uber-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. Follow the ACSI on LinkedIn and Twitter at @theACSI.
No advertising or other promotional use can be made of the data and information in this release without the express prior written consent of ACSI LLC.
About the ACSI
The American Customer Satisfaction Index (ACSI®) has been a national economic indicator for over 25 years. It measures and analyzes customer satisfaction with approximately 400 companies in about 40 industries and 10 economic sectors, including various services of federal and local government agencies. Reported on a scale of 0 to 100, scores are based on data from roughly 200,000 responses annually. For more information, visit www.theacsi.org.
ACSI and its logo are Registered Marks of American Customer Satisfaction Index LLC.
