The Best and Worst Customer Service Among Department Stores

Retail

Published: September 28, 2017 12:30 pm

Last Updated: January 12, 2020 7:41 am

The struggles among retail stores in the past year are well known. Less store traffic, stagnant same-store sales and severe pricing pressures are just a few of the hurdles the industry has to deal with. And no segment of retail has been harder hit than department stores.

Department store sales are down 0.8% between August of 2016 and August 2017, as well as down 3.3% year over year for the first eight months of this year. Retailers have been forced to close stores and reduce staff, which typically hurts customer service ratings

In our recent survey on customer service conducted by Zogby Analytics, the top-ranked department store placed 45th among all 150 companies and 17 industries included in the survey. The lowest ranked store was 145th among all 150 companies, and three ranked in the bottom 10 for customer service.

The survey included a telephone interview with 1,500 randomly selected U.S. consumers. Respondents were asked to rate their satisfaction level with a company’s customer service on a scale of “excellent,” “good,” “fair,” and “poor” for each company.

We reported our overall findings in our Customer Service Hall of Fame and Customer Service Hall of Shame stories published in August. We have also broken out and taken a look at the pay-TV industry, the mobile network carrier industry, the airline industry and banking and their poor customer service ratings.

Here is a listing of nine department stores ranked from best to worst based on the percentage of “excellent” ratings they received in the survey. Also included are the percentage of “poor ratings” and the revenues generated by the stores in their most recent fiscal year.

Nordstrom Inc. (NYSE: JWN)
> Overall rank: 45th
> Pct. “excellent” ratings: 33.63%
> Pct. “poor” ratings: 8.43%
> Revenue last fiscal year: $14.76 billion

Nordstrom did not close any stores in 2016 and has not announced any plans to close stores this year. The company plans to open 17 new stores in 2017.

Kohl’s Corp. (NYSE: KSS)
> Overall rank: 56th
> Pct. “excellent” ratings: 32.14%
> Pct. “poor” ratings: 5.63%
> Revenue last fiscal year: $18.69 billion

Kohl’s has no store closures planned for 2017, planning instead to open four new stores this year. The company closed 18 stores in 2016.

Target Corp. (NYSE: TGT)
> Overall rank: 82nd
> Pct. “excellent” ratings: 30.01%
> Pct. “poor” ratings: 8.80%
> Revenue last fiscal year: $69.5 billion

Target has not indicated that it plans to close any stores in 2017. It did not close any stores last year either.

Macy’s Inc. (NYSE: M)
> Overall rank: 87th
> Pct. “excellent” ratings: 29.69%
> Pct. “poor” ratings: 5.77%
> Revenue last fiscal year: $25.78 billion

Macy’s has announced that it plans to close 100 stores this year after closing nearly 70 in 2016.

Dillard’s Inc. (NYSE: DDS)
> Overall rank: 111th
> Pct. “excellent” ratings: 26.88%
> Pct. “poor” ratings: 4.61%
> Revenue last fiscal year: $6.42 billion

Dillard’s has not closed any stores to date in 2017 and did not close any stores in 2016.

J.C. Penney Co. Inc. (NYSE: JCP)
> Overall rank: 123rd
> Pct. “excellent” ratings: 25.61%
> Pct. “poor” ratings: 4.77%
> Revenue last fiscal year: $12.55 billion

J.C. Penney has announced that it plans to close 138 stores this year. About 100 have already been shut down. Last year the company closed nine stores.

ALSO READ: The Best and Worst Customer Service in the Banking Industry

Sears Holdings Corp. (NASDAQ: SHLD)
> Overall rank: 140th
> Pct. “excellent” ratings: 22.68%
> Pct. “poor” ratings: 11.94%
> Revenue last fiscal year: $13.49 billion

Sears and Kmart have closed 138 stores to date this year as the holding company tries to staunch lower revenues and same-store sales by closing poorly performing locations. In 2016, Kmart closed 206 stores and Sears closed 37.

TJX Companies Inc. (NYSE: TJX)
> Overall rank: 142nd
> Pct. “excellent” ratings: 22.48%
> Pct. “poor” ratings: 7.60%
> Revenue last fiscal year: $33.18 billion

TJX did not close any T.J. Maxx or other of its stable of stores in 2016 and has not closed any in 2017. Last year the company opened 146 new stores and is slated to open 111 stores in 2017.

Kmart (subsidiary of Sears Holdings)
> Overall rank: 145th
> Pct. “excellent” ratings: 21.27%
> Pct. “poor” ratings: 14.61%
> Revenue last fiscal year: $8.65 billion

Kmart and Sears have closed 138 stores to date this year, as the holding company tries to staunch lower revenues and same-store sales by closing poorly performing locations. In 2016, Kmart closed 206 stores and Sears closed 37.

Data on store openings and closings comes from Fung Global Retail and Tech’s “Store Opening and Closing Tracker” and from retail research website Clark.com.

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