Stay ahead of the curve and future-proof your business with Mintel’s UK Customer Service in Retailing Market Report 2024. Our full report is packed with consumer-led market intelligence, the latest retail market research, trends, and consumer behaviours affecting your business. This report tracks the support and assistance a retailer provides to its customers before, during and after a purchase.Â
Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.
Key Topics Analysed in the Full Report
- Consumer use of customer service in retail, including types of customer service and reasons for use.
- Use of customer service by categories, and important factors of customer service that consumers look for in each category.
- Issues experienced with customer service.
- Consumer attitudes towards customer service , with a focus on AI and the ‘human’ element of customer service.
- Key innovations in customer service in retail during the past year.
- Customer service examined isn’t restricted to interaction with employees, but also includes non-human support including online chatbots, self-service kiosks in-store.
Overview of Customer Service in Retail
The cost-of-living crisis means consumers are looking for value more than ever, raising the bar on customer service expectations. While future technology solutions such as AI have been increasingly used to reduce wait times and boost efficiency, there remains significant scepticism towards the technology, with the potential for AI to replace humans and the quality of AI support being key barriers to usage.
- Cutsomer service in retail statistic: 69% of consumers used customer service from a retailer.
- Customer service in retail attitudes: 73% of consumers who used customer service encountered problems with the service they received.
Opportunities for Customer Service in the Retail Sector
A growing number of consuemrs are interested in seeing more technologies that allow for providing personalised customer support, indicating a key area retailers should focus on to improve the customer experience. The prevalence of tech-powered solutions also gives opportunity to reassert the quality of human interactions, with this particularly appreciated by younger and affluent shoppers who lead purchasing activity in most categories.
- Opportunity for retailers: 42% of customer service users are interested in seeing more personalised support via new technologies.
Readers of this report may also be interested in our UK Customer Loyalty Market Report 2024, or our range of Retail Market Research.
Meet the Expert
Sam joined Mintel in November 2022 as a Retail Analyst with a focus on Home Retail. Her previous work experience includes working as a Research Manager for The Insights Family – a market research agency specialising in the kids and family ecosystem. She holds an MSc in Marketing from Nottingham Trent University.
Customer service is a key factor when shopping with a retailer, yet high levels of dissatisfaction with service show an area under-invested in by retailers.
Sam Nguyen
Retail Analyst
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Executive Summary
- Opportunities for customer service in retailing
- Good customer service is not a luxury but a necessity
- Leverage technology to elevate the role of staff…
- … while enhancing customer service
- The human element can set a retailer apart
- Market dynamics and outlook
- Consumer sentiment: wellbeing is up but the recovery has slowed
- Graph 1: the financial wellbeing index, 2016-24
- Physical retail remains the primary channel for non-food demand
- Graph 2: estimated share of total non-food sales, store versus online and other non-store, 2022-24
- What consumers want and why
- Most consumers use customer service from a retailer
- Graph 3: types of customer service used, 2024
- Resolving problems the most common reason for using services
- Graph 4: reasons for using customer service, 2024
- Fashion buyers the most active customer service users
- Graph 5: categories where customer service is used, 2024
- Information quality is the priority for most category
- Graph 6: most important factors of customer service by category, 2024
- Nearly three quarters experience an issue with customer service
- Graph 7: issues with customer service, 2024
- Poor customer service leads to consumer churn
- There is much scepticism towards AI
- Graph 8: attitudes towards technology-powered customer services, 2024
- The human touch can shape how consumers interact with retailers
- Graph 9: attitudes towards human customer service interactions, 2024
- Strong interest in solutions that give quicker access to customer service
- Graph 10: interest in services, 2024
- Retailer activity
- Harness AI for personalised services
- Amping up the in-store experience
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Market Dynamics
- Retail environment
- Retail experiences a prolonged period of volume decline
- Graph 11: all retail sales (excluding fuel), non-seasonally adjusted year-on-year performance by value and volume, 2023-24
- The retail market will remain challenging in 2024
- Online demand rebalances after the pandemic…
- Graph 12: all online sales, value non-seasonally adjusted, year-on-year performance, 2023-24
- …although online penetration remains heightened
- Graph 13: internet sales as a percentage of total retail sales, 2019-24
- Store-based retailers claim a majority of online sales
- Graph 14: share of online sales, by type of retail operation, 2020-24
- High street remains the primary channel for non-food demand
- Graph 15: estimated share of total non-food sales, store versus online and other non-store, 2022-24
- Consumer sentiment
- Consumer sentiment: wellbeing is up but the recovery has slowed
- Graph 16: the financial wellbeing index, 2016-24
- Consumer confidence continued to trend upwards
- Graph 17: the financial confidence index, 2016-24
- Wages have risen ahead of prices for almost a year
- Graph 18: real wage growth, annual % in wage growth vs inflation, 2020-24
- Interest rates expected to fall in 2024, but borrowing pressures will remain
- Caution in the market continues
- Graph 19: “Do you think the UK cost of living crisis is….”, 2024
- Consumer expectations of spending
- Graph 20: spending expectations for 2024 compared to 2023
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What Consumers Want and Why
- Types of customer service used
- Over two thirds use customer service
- Remote support is heavily used
- Graph 21: types of customer service used, 2024
- Younger shoppers are more open to experimenting different methods
- Graph 22: types of customer service used, by age, 2024
- Use of customer service rises with household income
- Graph 23: types of customer service used, by household income, 2024
- The majority use more than one type of customer service
- Graph 24: repertoire analysis of types of customer service used, 2024
- Reasons for using customer service
- Resolving problems the driver of customer service use
- Graph 25: reasons for using customer service, 2024
- Motivation for seeking support varies by gender
- Graph 26: reasons for using customer service, by gender, 2024
- Younger consumers are motivated to seek support for a wider array of reasons
- Graph 27: reasons for using customer service, by age and household income, 2024
- In-store staff is most used to help decision making
- Email is more used for most purposes
- Graph 28: reasons for using customer service, by types of customer service used, 2024
- Beyond Techspectations
- Categories where customer service is used
- Fashion buyers the most active users of customer service…
- Graph 29: categories where customer service is used, 2024
- … closely followed by buyers of food and drink
- Drivers for engagement varies by categories
- Graph 30: categories where customer service is used, by reasons for using customer service, 2024
- Usage of service falls in line with frequency of purchase
- Graph 31: categories where customer service is used, by age, 2024
- Half use customer service for one category
- Graph 32: repertoire analysis of categories where customer service is used, 2024
- Important factors of customer service
- Information quality is the priority for most categories…
- Graph 33: most important factors of customer service by category, 2024
- …with the exception being when shopping for baby products
- Accessibility of service another priority
- Self-service support for BPC is just as crucial in-store as it is online
- Issues with customer service
- Nearly three quarters experienced an issue with customer service
- Graph 34: issues with customer service, 2024
- Accessibility to customer service is a key issue
- A quarter of users are dissatisfied with chatbot results
- Graph 35: issues with customer service, by age, 2024
- Generative AI is a key topic for chatbot social media posts
- Owning up to mistakes can make a difference
- Graph 36: number selecting they have faced a lack of acknowledgement of mistakes, by age, 2024
- In-store support delivers higher satisfaction
- Graph 37: issues with customer service, by services used, 2024
- Amping up the in-store experience
- Younger consumers encounter more issues
- Half have encountered at least two issues with customer service
- Behaviours towards customer service
- Poor customer service caused over half to stop shopping with a retailer
- Busiest shoppers are the most likely to do so
- Scepticism towards AI-based service is high
- Nearly three in five worried about the potential for AI to replace humans
- Trust towards AI remains low
- Graph 38: attitudes towards technology-powered customer services, 2024
- Harnessing AI for personalised services
- Losing human connection is a key concern for older shoppers amid AI advancements
- Graph 39: “The increasing prominence of AI concerns me because I’m worried about…”, 2023
- AI regulations on the horizon?
- Human interaction is a key buying motivator
- Over two thirds are encouraged to shop in-store because of the human element
- Time-pressed shoppers are interested in slow checkout lanes
- Graph 40: “I would be interested in using a slow checkout lane that allows me more time to interact with staff”, 2024
- Interest in quicker access to customer service
- Quicker support could be a USP add-on for loyalty programmes
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Retailer activity
- Launch activity and innovation
- Leveraging technologies to simplify in-store shopping…
- … and boost staff efficiency
- Investing in the human element
- Serving the underserved
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Appendix
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Methodology
- Consumer research methodology
- Infegy Atlas
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