Clothing retailer Abercrombie & Fitch is no stranger to controversy. In 2013, the company’s questionable marketing practices alienated consumers by openly stating that their women’s clothing is made exclusively for skinny women. Two years later, the Supreme Court ruled against Abercrombie & Fitch’s illegal hiring policies that bar Muslim women from wearing a hijab on the job. With such a spotty recent history, it is no wonder that consumers are fighting back. As a result, the company now holds the unenviable position as the most hated retailer in the United States.
Abercrombie & Fitch’s customer satisfaction score of a 65 is a whopping 10 points less than the average rating for the retail category. Additionally, Walmart executives are most likely excited about this news because their company has finally crawled out of first place in the most hated competition. Of course, Walmart’s widespread history of controversies has not been forgotten, and they are still number two on the list.
The annual American Customer Satisfaction Index survey involves more than 9,300 consumers, and it provides people with the opportunity to assign a score to stores in six different categories. Unsurprisingly, investor confidence in Abercrombie & Fitch temporarily faltered after the news of their first place finish was made public. However, the company slowly began to bounce back up throughout the afternoon of February 25. This can probably be attributed to the main reason that the clothing retailer is still making money: controversy equals free media attention, which in turn can drive sales upward.
Interestingly, though, there are many retail experts who believe that Abercrombie’s new designation as the most hated specialty retailer in the U.S. is a sign that consumers are ready to completely move on from the brand. This comes amidst the retailer’s attempts to become less exclusive and more open to people of all sizes, but it appears that their efforts may be a case of too little, too late. After all, many of the customers and potential employees who were burned in the past due to any number of minute physical characteristics are not likely to be very forgiving of the company now.
Meanwhile, Walmart may no longer be the most hated retailer in the country, but they still hold the number one spot for discount and department stores. This is a distinction that Walmart has held since 2006, but they are a much bigger company with a larger revenue stream than Abercrombie & Fitch, which has helped them retain their hold on consumers.
Even with these factors on Walmart’s side, there will be at least 269 store closings this year. Walmart’s stock prices also slid by 30 percent in 2015. Abercrombie & Fitch does not have nearly as much wiggle room as Walmart, so the odds are high that this latest sign of customer dissatisfaction is a prime indicator that the end is near.
Although Walmart and Abercrombie both face challenges due to poor customer satisfaction rates, some companies have proven that fair business practices will be rewarded. For example, Costco is well-known to pay a livable wage, and they were rewarded with one of the highest satisfaction scores. Amazon also fared well with an 83, which puts the online retailer at the top of all eCommerce sites.
These numbers highlight a basic fact of business life: if a company fails to pay attention to the needs and wants of consumers, then its profit margin will suffer. On the flipside, people feel good about supporting companies that offer top-notch customer service and steer clear of unnecessary controversy.