It may well be the calm before the Amazon retail apocalypse, but a new study by research firm Roy Morgan has revealed Kmart shoppers are the most satisfied of Aussies that shop at discount department stores.
According to the study, based on the responses of 9000 shoppers, customer satisfaction with Kmart in August 2017 was 87.6 per cent, which now places it ahead of its major competitors. This is an improvement from a year ago when it was ranked fifth, behind Target, Best&Less, Harris Scarfe and Costco.
Interestingly, the study also revealed Gen Z’s and Y’s penchant for discount stores (more on that below).
Over the last 12 months, Kmart improved its customer satisfaction rating by one percentage point, while its major competitors all showed declines, except for Big W which remained unchanged.
The biggest declines were for Best&Less (down 2.8 per cent points), Target and Target Country (both down 2.2 per cent points). These changes in satisfaction have now moved Kmart to the top satisfaction rating with 87.6 per cent of its customers satisfied, followed by Costco (87.1 per cent), Target (86.5 per cent), Harris Scarfe (85.9 per cent), Big W (85.3 per cent), Best&Less (84.7 per cent) and Target Country (81.2 per cent).
Discount Department Store Customer Satisfaction
Satisfaction levels are an indication of how well retailers meet the needs of their customers. The first step to achieving this for discount department stores is to understand some of the top level differences in customer profiles between the majors. There are for example some major generational differences that need to be considered. The following chart highlights that around half of Harris Scarfe’s customers belong to the ‘pre-boomer’ and ‘Baby Boomer’ generations, much higher than all their competitors. Kmart and Costco have similar profiles to each other, with major strengths in ‘Millennials’ and ‘Generation Z’ that make up around half of their customers. Target Country has a strength with ‘baby boomers’, while Target, Big W and Best&Less have broad appeal across all generations.
Discount Department Store Generational Customer Profiles
Commenting on the study, Roy Morgan’s communications director, Norman Morris, said: “Discount department stores are facing increasing competition in a difficult retail market. They have many competitors, not only from other discount department stores but from the big two department stores, specialist retailers and new online players such as Amazon.
“Because discount department stores are generally aiming at serving a wide range of consumers, it is important for them to understand how they are performing in terms of satisfaction across segments within their customer base. We have seen here that there are considerable generational differences in the customer profile of the major discount department stores which must be taken into account when assessing needs and as a result, improve customer satisfaction,” he said.