Dissatisfied customers leave $3b in goods at the checkout because …

Customer service is never more important than in the lead-up to Christmas, and this year retailers –whether bricks and mortar or online – will be looking to claw back some of the losses suffered during pandemic lockdowns. But a new study puts a cost on poor customer service.

It estimates that retailers lost $3.17 billion in sales in the past 12 months when customers ‘walked away’ at the checkout.

The LivePerson Customer Conversation Report found that more than one-third (38 per cent) of customers were dissatisfied with their most recent retail customer service experience and seven out of 10 (71 per cent) had abandoned an online purchase at checkout in the past 12 months.  

The report, based on a survey of 3012 consumers – 1004 in each of Australia and Japan and 502 in each of Singapore and New Zealand – asked about customer service experiences in 2020, what had changed for them and what they wanted businesses to do differently or better.

Unsurprisingly, 63 per cent of Australians missed retail shopping a lot or a little during COVID-19 and 86 per cent said physical storefronts were still important when making retail purchases. Less than half (48 per cent) believed shopping would be ‘normal’ by this time next year. Almost three-quarters (72 per cent) said they were worried about shopping instore due to the virus – though obviously not the tidal wave of shoppers who descended on some stores when restrictions eased in Melbourne on Wednesday – and 82 per cent now rated ‘contactless shopping’ as important.

Asked specifically about their online shopping experiences and why they abandoned purchases at the checkout, the key issues were:

• unhappy with delivery details or options – 42 per cent
• wanting to do more research before making a purchase – 34 per cent
• unhappy with the price – 30 per cent
• not being able to find everything they needed – 20 per cent
• not having simple questions answered easily online – 17 per cent.

Customer engagement executive at LivePerson, Kate Sterling, said that COVID-19 had disrupted the retail sector and increased customer expectations.

“Customers now hold much more power,” she said. “They are more judicious about what they buy, they are buying more online and they expect their questions to be answered in real time, wherever they are and through whatever channel they prefer.”

The research found that Victorians, who experienced Australia’s toughest lockdown measures, were the most positive about the future of customer service with 47 per cent – as opposed to 39 per cent nationally – saying they believed the pandemic would lead to a better retail service experience.

When asked what they had become more comfortable with during the pandemic:

• 47 per cent of Australians said shopping online (compared to 54 per cent of New Zealanders)
• One in five (21 per cent) Australians said using messaging channels to speak to brands (compared to 50 per cent of Singaporeans)
• 18 per cent said speaking with an AI agent (the average across all four countries was 15 per cent)
• 17 per cent said using QR codes (compared to 49 per cent of New Zealanders and 56 per cent of Singaporeans).

And what did survey participants want more of?:

• locally based customer service agents with local knowledge – 41 per cent
• an improved range of communication channels – 34 per cent
• curbside pick-up options – 25 per cent
• technology to allow questions to be answered instore by virtual assistants – 24 per cent.

“Businesses can’t control the pandemic, but they can improve their approach to customer care,” said Ms Sterling.

“The retailers who will do well this Christmas and, in the years to come, are those who care about customer experience and use technology to augment a personal approach.”

Has customer service been an issue for you this year? Or was it an issue even before the pandemic? What are your main complaints?

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