Forbes
Retailers Are Hurting Their Reputation Scores By Not Responding To Online Reviews
By: Joan Verdon
At a time when retailers are obsessed with customer experience, a lot of retailers aren’t don’t seem to be paying much attention when a customer complains about a bad experience.
That’s one of the conclusions of the 2020 Retail Reputation Report created by reputation management firm Reputation.com.
The retail industry, according to Reputation.com, has a lower average reputation score than auto dealers, hospitality, dining, and real estate. (But retail does perform significantly better than the healthcare and finance industries.)
One of the biggest reasons why retail has a bad rep is the extremely low rate of response to complaints, and bad online reviews, or as the report describes them, “negative feedback” from customers.
Auto dealers, with the highest average reputation score of 607, had a 69% response rate to negative feedback posted online. Retailers, with an average score of 500, had a response rate of only 2.8%.
Not responding to negative reviews or comments online, or – even worse - being unaware they exist, are the worst mistakes retailers make in terms of their reputation score, Joe Fuca, CEO of Reputation.com, said.
“You would think retail would be forging ahead here just because of what’s happening in the industry,” Fuca said. “Service is what will really set you apart in retail in 2020 and 2021.”
Responding to reviews, whether positive or negative, is such a powerful customer engagement tool that it is surprising that retailers have such a low response rate, said Claudia Gerbasi, Managing Director, Retail at Reputation.com.
“You can thank customers for positive feedback, or take corrective action to improve an experience,” Gerbasi said. Both of those actions “are important to be successful in a very competitive retail age.”
Reputation.com, for the first time, had a booth at this year’s National Retail Federation convention and trade show, where it had a chance to show some of the nation’s top retailers how they fared on the company’s reputation score ranking.
Gerbasi, who staffed the booth at the retail show, said it was a chance to educate retailers about the existence of reviews and comments they weren’t aware existed.
“A lot of retailers are engaged on social media, or engaged on their own app or their website, but they’re not really addressing this data in the wild that is incredibly public and powerful,” she said.
“Anyone with a smart phone can impact your brand,” she said during a meeting at the retail show.
Reputation.com was born in 2012 as the business-to-business arm of ReputationDefender.com, which was launched in 2006 as a way for individuals to monitor and improve their online reputations. In 2018, Reputation.com sold off the ReputationDefender branch and is now solely focused on business clients.
Reputation.com scours the internet for reviews, social media comments, corporate replies, and online listings, and uses that data to create a reputation score for companies, in order to product the report.
In the 2020 retail report, it lists the scores of the 100 top-ranking retailers in the United States. Trader Joe’s ranked No. 1 on this year’s list, with a score of 642, followed closely by The Lego Store at 640.
The volume of reviews posted over the last 12 months, the average star rating given to a retailer, and the response rate to complaints all factor into the score. A retailer with more reviews ranks higher, even if that higher volume also means a greater number of negative reviews.
Most of the 100 retailers in the report had pretty good star ratings, with almost all averaging four stars or greater. Drugstores had the lowest scores on the list, with Walgreens, CVS, and Rite Aid landing in three of the last four spots on the list, along with supermarket chain Kroger.
Jewelry stores also failed to shine, with Signet Jewelers, Kay Jewelers, Jared, and Zales, all ranking among the lowest 20 scores.
But the category where nearly all of the retailers look bad is “Average review response to complaints.” Many of them, even some of those with the best scores, had a zero response rate.
One exception was Nordstrom. It had a 51% response rate for its department stores, and a 79% rate for Nordstrom Rack, the highest response rates on the list.
Reputation.com’s biggest client group is auto manufacturers and dealers.
The auto industry has made seeking customer feedback, and responding to it, a priority, linking it to pay and other incentives, Fuca said.
“It’s part of the culture in auto and I think it will be in other industries as well,” he said.
Car dealers have a better reputation than retailers? It’s time for retailers to take a look at what the auto industry is doing right.
