Today the magic in the warehouse is real and it’s getting some recognition. Costco is known for the value it provides to the customer, for its innovative business model, its humble servant-leadership and company culture – but we rarely think that Costco could go head to head with Amazon. However it was announced that Costco scored top marks for online shopper customer satisfaction in the recently released American Customer Satisfaction Index (ACSI) Retail and Consumer Shipping Report 2018-2019. The updated score knocks Amazon down to second place after holding the top spot since 2010. The score validates Costco’s customer-first culture and proves once again that customers love Costco.
Behind The Score
To get its results, ACSI asked more than 62,000 consumers to choose their favorite stores in a number of categories. The satisfaction rating is based on product quality and is measured on a scale of 0-100. Costco scored an 83 in its first year in the internet retailer category.
Amazon dropped 4% from last year to a score of 82 and second place, but still above the average internet score of 80. Other retailers include Target with a score of 80 and Walmart towards the bottom of the pack with a score of 74. Customers still prefer shopping online, but overall ecommerce scores dropped 2.4% last year. Customer satisfaction was down across all six categories in the ACSI survey. A large contributor to lower overall scores was underwhelming customer service and staff shortages, which stretch employees thin so they can’t serve customers well.
Why Are Costco Customers Satisfied?
Costco is known for having loyal customers and a culture focused on value. Clearly, it’s paying off. The survey found that customers love the low prices and high quality of Costco’s private Kirkland brand. Costco also recently partnered with Instacart to offer same-day grocery delivery for its customers, which capitalizes on modern customers’ need for convenience and value. The popular new service allows customers to get Costco’s bulk prices without having to step foot in the warehouse.
It shouldn’t really come as a surprise that Costco took top honors considering its history of loyal customers. Costco has a customer-first culture and works to meet customers’ needs quickly without any bells and whistles. The company’s famous return policy is just one example of how customers come first—even if they want to return a used grill they bought years ago. In Costco warehouses, customers are central, and employees are happy to answer questions and provide a pleasant shopping experience.
The same principles transfer online. Costco utilizes technology to conveniently provide great products and prices for customers. Costco sells high-quality items at reasonable prices, which is enough to win over many customers. What takes it to the next level is the customer experience. Customers can easily find what they’re looking for and track an order. If there’s an issue, customers can access information on the website or call the contact center to quickly get a human. The combination of value, technology and a human touch puts Costco in the top spot for customer satisfaction. While Costco doesn’t have the amazing quantity of items like Amazon, it excels in personal and convenient service. And apparently, that matters with customers enough to give Costco the edge.
Ecommerce is a competitive space, and Costco’s new position as top dog shows that focusing on customers and delivering value can pay off with satisfied and loyal customers.