Study: Kmart leads discount department store satisfaction
The study shows that customer satisfaction with Kmart in August 2017 was 87.6 per cent, which now places it ahead of its major competitors. This is an improvement from a year ago when it was ranked fifth, behind Target, Best&Less, Harris Scarfe and Costco.
The latest findings from Roy Morgan’s ‘Discount Department Store Satisfaction Report’, which is based on over 9,000 interviews per annum with people who have shopped at a discount department store in the last 12 months, showed Kmart improved its customer satisfaction rating by 1.0 per cent points, while its major competitors all showed declines, except for Big W which remained unchanged.
The biggest declines were for Best&Less (down 2.8 per cent points), Target and Target Country (both down 2.2 per cent points). These changes in satisfaction have now moved Kmart to the top satisfaction rating with 87.6 per cent of its customers satisfied, followed by Costco (87.1 per cent), Target (86.5 per cent), Harris Scarfe (85.9 per cent), Big W (85.3 per cent), Best&Less (84.7 per cent) and Target Country (81.2 per cent).
Roy Morgan stated satisfaction levels are an indication of how well retailers meet the needs of their customers. The first step to achieving this for discount department stores is to understand some of the top level differences in customer profiles between the majors. There are for example some major generational differences that need to be considered.
The following chart highlights that around half of Harris Scarfe’s customers belong to the ‘pre-boomer’ and ‘baby boomer’ generations, much higher than all their competitors. Kmart and Costco have similar profiles, with major strengths in ‘millennials’ and ‘generation Z’ that make up around half of their customers. Target Country has a strength with ‘baby boomers’, while Target, Big W and Best&Less have broad appeal across all generations.
Norman Morris, Industry Communications director, Roy Morgan Research said discount department stores are facing increasing competition in a difficult retail market.
“They have many competitors, not only from other discount department stores but from the big two department stores, specialist retailers and new online players such as Amazon,” Morris said. “Because discount department stores are generally aiming at serving a wide range of consumers, it is important for them to understand how they are performing in terms of satisfaction across segments within their customer base.”
“We have seen here that there are considerable generational differences in the customer profile of the major discount department stores which must be taken into account when assessing needs and as a result, improve customer satisfaction.”
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