• Retail Dive

Athleta, Lululemon score big on in-store experience


Dive Brief:

· Physical stores have a lot to lose in an era of growing e-commerce, with added pressure at the holidays to draw in customers, who are looking for clean stores, available and well-versed staff, easy parking, price, value and in-stock merchandise, according to an analysis of more than 400,000 online customer reviews from Reputation.com chief scientist Bradley W. Null and CMO Mark D. Lange.

· The LEGO Store took the top spot in their study, with locations that earned an average rating of 4.53 stars. Toy and baby stores in general took four of the top ten slots in the study, with the Disney Store (4.49 stars) a very close second, Carter's (4.31) in sixth, and OshKosh B'Gosh (4.22) in ninth, according to the report.

· Among apparel retailers, Gap Inc.'s Athleta led with 4.39 stars, due largely to consumers' ratings of its staff, product availability, parking, facilities and amenities, the study found. Lululemon (4.38) and Nordstrom (4.32) were close behind, largely due to their teams' abilities, though they both got more complaints about wait times. Hugo Boss (3.63) did extremely well on staff competence, but consumers did complain about store managers. Leading the off-price retailers were TJ Maxx, with 4.13 stars, followed by Nordstrom Rack (4.06), Burlington (3.98) and Ross Dress for Less (3.96).

Dive Insight:

Despite the fact that 92% of millennials still plan to spend money in stores this holiday season, the growth of e-commerce — demonstrated by early Black Friday weekend shopping statistics — is putting pressure on retailers to beef up their physical store experiences.

"[T]he pivot toward online shopping means that brick-and-mortar retailers have to find ways to deliver experiences that web outlets alone can't match," Null and Lange wrote.

Reputation.com used machine learning and sentiment analysis of more than 400,000 reviews posted by consumers on Google and Facebook about their in-store experiences at more than 8,000 locations of 28 major retailers.

Winners in "price and value" weren't just off-price retailers, the study found. TJ Maxx did take the cake with 4.3 stars, followed by Carter's, Burlington, Ross Dress for Less and OshKosh B'Kosh (all 4.2), but retailers that often tout their prices and value didn't score as well. Consumers felt they were getting less of a bargain at home improvement outlets Lowes (2.8) and the Home Depot (2.7), cosmetics boutiques Ulta (2.6) and Sephora (2.3), and men's fashion stores Express (2.7) and Hugo Boss (2.1), according to the research.

For overall service experience, Disney (4.6 stars), LEGO (4.4) and Nike (3.9) outperformed Nordstrom's legendary service (3.7) in consumers' reviews, according to the report, as athletic wear stores Athleta (3.6), Lululemon (3.6) and Adidas (3.0) scored better than average. Among discount retailers, T.J. Maxx (3.4) was rated particularly strongly. Beauty retailers Sephora and Ulta (both 2.6) were often criticized for their service, which Null and Lange said could be because their customers may have higher expectations than the typical shopper. No matter the expectations, though, having to wait in line to buy something invites online scorn, they warned.

"Stores staffed and efficient enough to avert that risk and be rated highly for short wait times include LEGO (4.5 stars), Lululemon (3.6), Disney Store (3.4) and Nordstrom Rack (3.4)," the report said. "While Lowes, Sephora and Home Depot had the greatest share of negative reviews about waiting, customers at American Eagle Outfitters were the most aggravated."

Out-of-stocks are another pain point in stores. Disney (4.5 stars), Carter's and Express (both 4.4) scored the highest ratings for product availability, but T.J. Maxx (4.1), which recently worked to overcome merchandising problems, ranked number one among off-price retailers. Leaving some opportunity for the departments stores that have lost market share to it, Sephora did much less well (2.1) while home improvement leader Lowes (2.4) also has room to improve inventory management.

In-store workers provide physical retailers with a way to impress shoppers in a way that is much more personal and spontaneous than online, and many retailers in the study came through. Staff competence was one of the most highly-variable aspects of consumer experience, according to the report. Hugo Boss scored a perfect 5.0 stars in that measure, followed closely by LEGO (4.9) and Disney (4.5). "The significant majority of retailers delivered better than 3.0, suggesting they're making ongoing investments in training," according to Null and Lange.

"Consumers are living and shopping in an age of near-perfect transparency now, as they post and read reviews about the service they're receiving at retailers," Null and Lange wrote. "The perfect shopping experience, far from being a matter of chance, happens when a retailer fully understands — and has the information to fully manage — every facet of the consumer's journey, from the web to the four walls."


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