Target Satisfies but Macy's Sells

Customer service ratings don’t always pick who will succeed in retailing, and that seems to apply to online retailing, too.

The American Consumer Satisfaction Index, a study that comes out of the American Society for Quality, gave Target a rating of 77 in the fourth quarter of 2008, near the top of the pack in the department and discount stores category and on par with the year-earlier period, while Macy’s rating was lower, 74, and in fact down 1.3% from the 2008 fourth quarter.

Yet, in that time frame, Macy’s online sales advanced by 24%. Macy’s CFO Karen Hoguet was positively enthused about the results during the retailer’s year end conference call Tuesday, saying that Macy’s is experiencing, as SeekingAlpha reports, “terrific synergy between the Internet and our stores. Customers shop in stores and then buy on line or the reverse. Or, they buy online and return in the stores and do other shopping while they are there. Or, if they can’t find what they want in the store, we order it online for the customer. The small tight channel integration is going to continue to help the company as we go forward.”

Gregg Steinhafel, Target’s chairman and CEO, wasn’t so jazzed about the online business in that retailer’s year end conference call on Tuesday. In fact, he said it suffered a “precipitous” decline beginning in September and only began to recover in January, with modest growth the rule since versus the “strong double-digit increases” Target experienced earlier in 2008.

Given what the holiday season was like, maybe not buying stuff was the more satisfying shopping experience for some consumers.