UK customer experience dips for first time in four years

Customer experience in the UK has dipped for the first time since 2017, registering a 1% fall in 2021 despite rising during the height of the pandemic last year.

KPMG’s Customer Experience Excellence Report had registered year-on-year improvements in customer experience over the past four years, including during the first period of Covid-19 lockdown.

However, the research finds that digital-first brands and those offering a clear focus on environmental, social and governance (ESG) issues are bucking the trend.

The survey of almost 10,000 UK consumers puts Starling Bank in first place for customer experience, followed by cosmetics brand Lush, John Lewis, QVC UK and American Express. This is the second time Starling Bank, a purely digital brand, has ranked in the top five.

There are 10 new entrants to the top 100 companies this year, all of them digital-first businesses. According to KPMG, these companies have succeeded in making digital connections feel human and emotional, allowing these brands to offer market-leading experiences that cost less than the service of traditional rivals.

The developments taking place are leading to permanent behavioural change among consumers, with KPMG calculating that 56% of brand interactions now take place using technology.

“For the leading brands, all customer experiences are now ‘digital first’,” says KPMG UK head of customer consulting Tim Knight.

“Technology advancements means engaging with consumers no longer just means ‘lowest cost’, but also ‘most human.’ These digital businesses are faster, more agile and more emotionally engaging, which sits at the heart of their growth.”

However, simply spending on tech does not guarantee better experiences. Knight points to other brands which are spending significantly on technology and failing to deliver similar results.

“This points to structural issues in how they understand the customer, how they have adapted to the new market and their focus on real value, rather than rolling out platforms and chasing efficiencies,” he adds.

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Grocery, restaurant and fast food sectors were ranked highly by consumers for their customer service despite, or perhaps because of, facing disruptions during the Covid-19 crisis.

“Grocery retailers were a lifeline throughout the pandemic, rising to the challenge of keeping people fed and focusing intently on consumer needs,” says KPMG UK head of consumer, leisure and retail Linda Ellett.

“The question now being grappled with is how they can transform this into long-term loyalty – most people shop at multiple grocers and continue to do so. With the growing preference from consumers for online shopping, supermarkets are having to rethink their physical offering in earnest if they want to maintain footfall in their stores going forward.”

Furthermore, the research finds that customers are increasingly concerned about the environmental and sustainability agenda of brands. The survey suggests that Cop26 has raised the profile of such issues with consumers and they impact on their buying decisions.

According to KPMG, more than two thirds of customers (68%) under the age of 34 say they will pay more for goods from companies which demonstrate a strong commitment to sustainability principles, compared to just 37% of those aged over 55.

In second place on the ranking, Lush was praised for its long-term social and environmental commitments, demonstrated across every customer touchpoint.