Woolworths tops 2016 Customer Satisfaction Index with most satisfied customers
Issued by Tribeca PR on behalf of Consulta - Apr 20th 2017, 14:00
Supermarket loyalty tested in tough economic times
The latest South African Customer Satisfaction Index (SAcsi) for Supermarkets, conducted by Consulta, reveals customers remain highly satisfied with the supermarkets they visit despite a decline in loyalty compared to 2015.
With a substantially higher score than the industry average of 76.2, Woolworths has the most satisfied customers with a score of 82.1 on the index and is the only supermarket with a marked increase compared to its 2015 average of 80.7. Checkers, with a score of 77.2, and Pick n Pay at 76.5 both remained above average while Shoprite and Spar trailed with scores of 75.5 and 75.2 respectively.
The 2016 SAcsi for Supermarkets benchmarks customer satisfaction using an internationally recognised model. The Benchmark provides unbiased insights into the South African Supermarket industry by blending a Customer Expectations Index, Perceived Quality Index and a Perceived Value Index to achieve an overall result out of 100. It provides a weighted statistical index score of various aspects of a customer’s experience with the brand, the degree to which the product or service has met, fallen short of, or exceeded their expectations, and how well it compares to the respondents’ anticipation of their experience.
While South African customers appear to be generally happy and overall customer satisfaction is still high, scores for customer loyalty declined across all supermarket brands analysed in 2016 compared to scores in 2015. Overall customer loyalty decreased from 76.4 in 2015 to 74.2 in 2016, yet Woolworths held steady with the most loyal customers and a score of 77.3 followed by Shoprite (74.9), Pick n Pay (74.6), Spar (73.5) and then Checkers (72.5).
“In tough economic times, the price of goods is likely to influence consumers’ loyalty even though they are satisfied customers,” says CEO of Consulta, Professor Adré Schreuder. “But price-motivated ‘loyalty’ is not permanent so while customers may display less brand loyalty now, supermarkets cannot afford to stop investing in positive shopping experiences.”
Customer expectation refers to the total perceived benefits a customer expects from a company's product or service. If the actual experience customers have with a supermarket exceeds the expectation, they are typically satisfied.
The 2016 industry average for customer expectation is 78.3. “This number shows us the extent to which customers demand value from their preferred brands,” says Schreuder. “This is a tough position, as the brand must work extremely hard to maintain the standards it has established.”
A related study by Nielsen showed that when selecting a supermarket, South African consumers are highly influenced by convenience of location (71%), speed (61%), high-quality fresh produce (71%) and product availability (68%) more so than price (56%) and promotions (56%).
It appears customers believe that they receive great value from Woolworths, as is seen in its unmatched perceived quality score of 87 and perceived value score of 80.6, compared to the industry average of 80.3 on perceived quality and 76.5 on the perceived value.
“Woolworths has succeeded in providing high-quality products, convenience and fast service while growing its footprint rapidly, including a growing presence in petrol station forecourts,” Schreuder adds. This is testament to the fact that customers are willing to pay for quality products when they can afford to.
Supermarkets continuously look for ways to diversify themselves with some offering premium products or fresh deli goods, while others introduce customer loyalty programmes and till point promotions aimed at their children. Some incorporate digital channels such as Woolworths and Pick n Pay’s comprehensive online shopping services.
“A shopping experience is determined by so many factors and supermarkets need to demonstrate their ability to meet their ever-changing customer needs, consistently and reliably”, says Schreuder.
The SAcsi for supermarkets includes a Net Promoter Score (NPS) that measures the percentage of customers who would recommend a supermarket to their family and friends minus the percentage of those with a low likelihood to recommend (called detractors).
The highest Net Promoter Score was attained by Woolworths at 50%, scoring 18% higher than the industry average, and 24% higher than Checkers at the opposite end of the scale.
“A high likelihood to recommend demonstrates that customers appreciate supermarkets that deliver on their expectations and continue innovating to address evolving needs,” concludes Schreuder.
Massmart braces for bleak interim earnings
25/05/2018 - 09:06
Interim profit could fall by nearly 70%, thanks to restructuring costs, the Walmart-owned retailer says.
Balenciaga overtakes Gucci as Kering's fastest growing brand
24/05/2018 - 09:03
Luxury fashion retailer Balenciaga has become Kering’s fastest growing asset thanks to increasing interest from millennials.
Kohl’s reinvents its loyalty strategy
23/05/2018 - 14:52
Kohl’s is reinventing its loyalty strategy by taking the best elements of its three rewards programs and rolling them into one.
Shoprite introduces new mobile transactional banking service
23/05/2018 - 11:25
Access to banking services just got easier and more inclusive with Shoprite Money - a new mobile transactional banking service which is available to everyone, even those without existing bank accounts.
Verimark delivers excellent growth performance
23/05/2018 - 08:36
South Africa’s market-leading direct retail group, Verimark, today announced that notwithstanding the challenging economic environment in South Africa, the company has delivered one of its best performances to date, as reflected by growth in sales and profitability for the year ended 28 February 2018.