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Retailers on warpath as customer loyalty disappears

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More than a quarter (27 per cent) of consumers have switched their usual supermarket in the last six months, and a significant amount have switched food and household goods (41 per cent) and clothing brands (27 per cent).

This is a trend that has grown significantly in the last three years, retailers say. As a result, retailers say they fear a war for customers.

The research, by the Institute of Customer Service, shows that two-thirds of retailers fear a “significant” threat of revenue loss as a result of this increased customer churn, while a third see customer churn as the “greatest” threat to their business.

In this context, the differentiator will be customer service, a majority of retailers believe. Yet 94 per cent of retailers admit to having cut customer service back in the last year – and half admit to having “significantly damaged” customer service.

“In a fiercely competitive high street, where all retailers are slashing prices, service will be the critical differentiator,” says ICS chief executive Jo Causon.

“Yet half of retailers have placed themselves at an immediate competitive disadvantage by not safeguarding their customer service operations. Service has always driven bottom-line performance, and will be a key battleground in the war for customers this year.”

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