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April 8, 2025
Customer Service Satisfaction Reaches Near-Decade Low, Report Says: How Can Retailers Improve?
Customer service appears to be a dying art — at least according to a recent report from Retail TouchPoints. Citing data from Forrester’s 2024 U.S. CX Index, the outlet indicated that customer service had reached its lowest point since 2016.
According to Forrester, a mere 3% of businesses are “truly customer-focused in their approach,” and the report indicated that it is now, more than ever, time to drill down to the fundamentals of the retail business: to “[show] customers you know them, understand them and are
equipped to serve them.”
The report quoted Melissa Minkow — global director of retail strategy for CI&T and RetailWire BrainTrust member — to reinforce this point.
“The motto I live by now is that ‘with greater customer experiences comes greater responsibility,’” Minkow told Retail TouchPoints. “Customers have had a taste of some incredible experiences by now, and they now expect them from every retailer.”
The report then proceeded to outline three distinct pain points common to the contemporary retail consumer.
‘I Can’t Find What I’m Looking For’
Filed under this headline, the study pointed toward CI&T data suggesting that 19% of consumers would return to a store, e-commerce site, or app based on how quickly they can locate and purchase a desired item. Perhaps contrary to a common belief, customers prioritize efficiency over experience.
“Consumers don’t want to spend a lot of time on sites or apps — they want to be in and out,” Minkow said. “That’s what would raise NPS [net promoter scores] and, in my opinion, get consumers to keep coming back.”
The report underscored statistics stating that nearly three-quarters (70%) of shoppers found it difficult to find an associate to help them locate an item — a finding backed up by another statistic stating that 83% of store associates found it difficult to prioritize tasks when working in increasingly complex roles.
One solution discussed by the report was the introduction of technology to assist, with “store modes” in apps for retailers such as Tractor Supply and Dick’s Sporting Goods allowing shoppers to view real-time inventory counts and product locations.
‘I Feel Like This Brand Doesn’t Understand Who I Am or What I Need’
In this instance, the report sketched out the necessity of providing a personalized — but not overly personalized — customer experience.
“The experience customers today are looking for is seamless and personalized enough to be of value to them,” Brandon Rael, director and consult partner at Kyndryl and another BrainTrust member, said. “It’s a way to build a community where all channels drive the discovery process, and then customers can either engage with an employee or engage in that self-service experience.”
However, “Highly personalized experiences are not good for the user experience,” James A. Weiss, managing director of Big Drop Inc., argued. “That’s not good for brand recognition.”
The sweet spot could be in leveraging generative AI agents to provide a relatively inexpensive and highly efficient experience, according to the study. Gesturing toward success stories in this vein as evidenced by Best Buy and The Home Depot, the report further indicated that 58% of customer service managers saw GenAI as a “game-changer” in the industry — and 84% plan to use generative AI assistants in a customer-facing role in 2025 (up from just 42% in 2023).
‘Why Do I Have To Keep Repeating Myself?’
Finally, Retail TouchPoints’ report highlighted the irritation many customers face when they have to engage with several different channels to have questions answered or reach a specific goal.
Be it via telephone, email, visiting a store, engaging in text chat, or a variety of other points of contact, shoppers quickly become frustrated when having to restate the ask.
“Retailers are perpetually playing catch-up with their data strategies,” Rael noted. “We’re talking about GenAI and personalization, but without the proper amount of data and insights foundationally, how can you even do that? Legacy retailers have legacy architecture. They don’t have a robust data-centric way of thinking, and maybe they’re cobbling together integrations and solutions.”
One way to reduce this issue is to ensure that all teams are privy to as much relevant customer information as possible, at every potential point of contact. Armed with this data, customer service specialists in a variety of roles can immediately address shoppers’ concerns, removing the headache (and time wasted) of having the customer repeat themselves.
“It’s about knowing who they are and providing the offers, promotions and services that will resonate with the customer where it feels like there are no channels. The retailers have visibility into how [customers] engage across multiple platforms,” Rael concluded.
Discussion Questions
Are retailers currently doing enough to ensure that customers are subjected to a seamless, frictionless shopping experience? Which retailers are succeeding in this manner, and which are failing?
Is GenAI really a cure-all for many customer service issues facing the retail business, or are there unspoken problems with relying too heavily on AI agents and tools?
What other customer service failings are currently proliferating in the retail industry? What solutions can be deployed to curtail these?
Poll
Loading …BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Lisa Goller
B2B Content Strategist
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What can they do to improve customer service? Try offering it!
Now that’s a little harsh – and simplistic – isn’t it? Many retailers offer excellent service, but in most cases the customer has to pay for it. Ever since the rise of discounters, and the demise of the whole armada of fair trade practices, showrooming has been a growing menace. That can’t change until the customer acknowledges the inequity of free-ridership. ( Let me know when that’s likely to happen.) There’s also the problem of competition for retail talent: generations ago women had limited employment options beyond retail and teaching. That’s no longer true, and the need to pay higher wages, while bringing in less revenue creates a doom loop for the full service model; I don’t see that changing much either.
In so many instances, the problem is that there aren’t enough people working in the store. Until this can be addressed, customer satisfaction can’t be achieved, and shrink will rise.
Customer satisfaction reaches near-decade low. How can we improve? How about actually focusing on customer service, because in many stores it’s either non-existent or really bad. And technology isn’t the answer, associate training is.
I have spent the week in and out of stores in the Seattle area, all kinds of stores. I have experienced lovely and attentive service, but have been ignored in far more. Nothing will fix that except training and a focus on the customer from the time they enter the store until they walk out the door.
I’m with Craig. We keep talking about how cool AI is but you sure don’t see it in service. If you’ve got an issue, the first step in all phone calls is “most problems can be solved on our web site. Would you like me to send you a link?” After continuing elevation of the word NO, finally, you get to a highly scripted, poor English speaking CSR. Every time I have to call I have to steel myself for the process.
and the real kicker? The companies always ask if you want to participate in a survey after the call. I’ve learned now that the survey is about the poor, under educated CSR, rather than the process itself. So I don’t take the surveys anymore. I have better conversations with Chatgpt. I understand change is hard and retailers (and other service organizations) took forever to outsource to various other countries. I have no interest in criticizing people who aren’t given the right tools.
Hey, I have an idea….we should add a tariff to companies that outsource their customer service to other countries or penguins.
hahahahaha
Some retailers need to get back to basics. When displays look like they’ve been hit by an atomic bomb and shoppers have to sift through mountains of dreck – that’s poor customer service. When you have 1 register open and a line that seems to stretch from Phoenix to Portland – that’s poor customer service. When you have more out of stocks on your shelves than you do products – that’s poor customer service. Sometimes poor systems and technology plays a role (especially in poor stock levels), but usually the causes are more mundane: penny-pinching and a lack of focus!
I prefer “customer delight” to customer service. I service my vehicle, but expect to be delighted by retailers, in person & online. Unfortunately, the lack of delight is usually manifested by a poor interaction with an associate.
However, what appears as a people problem is more often a system problem – understaffing, lack of training, products unavailable or out of stock, non friendly or inefficient return policies, long waits on the phone or chats, policies which make no sense.
I would begin by identifying every occasion in which a customer has to compromise, determine the rationale for the need for such a compromise & change those that make no sense.
Don’t expect or wait for AI to solve problems that are systemic in nature.
Retailers who fail to provide seamless shopping experiences should focus on optimizing their online platforms for user-friendliness and speed.
The implementation of personalized recommendations and efficient checkout processes can significantly improve the satisfaction of customers.
Investing in customer service training and utilizing data analytics to understand the behavior of shoppers can also be helpful in resolving pain points.
The use of artificial intelligence (AI) can handle routine inquiries and provide quick solutions, however, the use of human agents is essential for addressing complex issues and providing empathetic support.
Although AI tools are capable of analyzing data and predicting customer needs to personalize interactions, human intuition and emotional intelligence are irreplaceable.
In order to deliver a more balanced and effective service experience, retailers can combine AI with skilled customer service representatives.
A solution to this problem is the use of augmented reality (AR) to allow customers to view products in their own environment before making a purchase.
Additionally, retailers can implement chatbots that employ advanced natural language processing in order to provide instant customer support and guide them throughout the shopping process.
Creating a customer feedback platform will also enable you to gather insights and quickly address recurring issues, thereby improving your overall shopping experience.
I think Melissa’s report nails it. Will any retailers take it seriously or even read it? “Gee, to do that, I may have to hire and train more people.” Not likely. I don’t think retailers understand retail.
“The report underscored statistics stating that nearly three-quarters (70%) of shoppers found it difficult to find an associate to help them locate an item.” Why would you go to a store when you can find whatever you want in moments online?
The corollary to that is why you would go to a store to deal with AI when you can do it online. Technology is just an excuse for not hiring more associates.
Years ago, I was meeting with an executive from an autoparts retailer who was new in position. The executive commented that there were many opportunities for his new company to improve margins. “We sell car batteries and install them in the customer’s vehicle for free. We could easily charge $20 for that, and no one would bat an eye.”
In a nutshell, that’s where we are today. Many retailers are trying to cut expenses, and providing great service, in many cases, is a target. All the usability testing in the world won’t measure the psychological impact of consumers feeling like they’re no longer getting something that once was assumed to come with the purchase. Add to this the different ways a few companies obscure access to return or cancel features on their sites, forcing their customers through onerous phone menus, and you have a recipe for disconent.
Generative AI agents WILL impact customer service and experience – it is “when” not “if” on this issue. Some will be designed and deployed well and some won’t, just like some employees are trained well and some aren’t. So it isn’t a panacea but in some cases will exceed the service (or lack of it) in play today. Given that there aren’t enough employees in many stores today, alternative tools have to be considered. I’d rather have a knowledgeable chatbot than an employee with a bad attitude and no idea what product to recommend!
Store teams have been stretched thin for years. Associates want to give customers the attention and care they deserve but they lack the resource capacity, as they’re expected to do more with less.
Most retailers get very low grades on customer service these days. And that’s a major factor in poor overall customer experience. These failed opportunities to satisfy customers add up daily to major hits to the bottom line. Yes, staff shortages and employee burnout hurt customer service. But lack of good training and clear guidelines on how to serve customers can mean that even those who are working tend to be far from effective.But there are usually deeper problems. Disconnects among work processes—and management—lead to lack of customer success in the stores and online, too. Existing tech can help or hurt the cause as well. There is no quick fix. But there is a quick pivot: focus on the customer experience from the customer’s point of view and make sure that all your systems and processes support their needs. Invest in those changes that can eventually elevate the customer experience, and don’t forget the change management piece. You’ll see the results in more engaged staff, happier customers, and a more robust bottom line.
I’d rather take the approach of what retailers can do to create a better customer service experience. Here’s a short list.
That’s just a start!
Most retailers are still failing at the basics. Customers can’t find products, can’t get help, and have to repeat themselves every time they switch channels.
That’s sloppy and only few are doing it right, like Target and Best Buy. Many others are just throwing AI at the problem without fixing their broken systems.
GenAI is not a magic fix if your data is a mess and your teams aren’t aligned. Retailers keep chasing trends instead of fixing what’s obviously broken.
Solve the basics first, then scale the tech.