UK customer experience dips, but digital brands with clear ESG focus rally, finds new KPMG research

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UK plc has seen year-on-year increases in customer experience over the last four years, even amid the challenging circumstances of lockdown. However, the latest research from the KPMG Nunwood Excellence Centre, now in its twelfth year, has revealed the first dip in customer experience in the UK since 2017 – falling one per cent1 vs last year.

Almost 10,000 British consumers voted that the brands with the best customer experience are:

1) Starling Bank

2) Lush

3) John Lewis

4) QVC UK 

5) American Express.

This is the second time Starling Bank has been in the top five – rising two places from number three last year.

This year’s KPMG UK report emphasises the critical importance of technology across customers’ relationships with brands. The pandemic meant most consumers were forced online last year, yet despite easing restrictions digital engagement is still favoured, with 56 per cent of interactions taking place via a digital channel in 2021, compared to 55 per cent during the 2020 lockdown and just 50 per cent in 2019.

There are 10 new entrants to the top 100 ranking who are all “digital-first” businesses. Indeed, the new number one company in this year’s research is Starling Bank, a pure-digital business. These brands succeed in making digital interactions human and emotionally connective, using the most advanced technology to be efficient, joined-up and engaging. This is delivering market-leading customer experiences, often at significantly lower costs than traditional rivals.

Commenting on the findings, Tim Knight, head of customer consulting at KPMG UK, said: “For the leading brands, all customer experiences are now ‘digital first’.  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, many other brands are spending significantly on technology and failing to deliver 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.”

In the wake of COP26, the report also shows the critical importance of the environmental and sustainability agenda as part of buying decisions. Two thirds (68 per cent) of customers under the age of 34 say they will pay more for goods from companies who demonstrate a strong commitment to environmental and sustainability principles, compared to just 37 per cent of over 55s. Second place leaders, Lush, are an example this: their long-term social and environmental commitments are demonstrated across everything they do.

Grocery Retail and Restaurant & Fast Food are the leading sectors for best customer experience, ranking first and second respectively. The Logistics industry saw the biggest fall in customer experience, with a drop of five per cent because of enduring supply chain issues which are expected to continue.

Linda Ellett, UK head of consumer, leisure & retail at KPMG, added: “With the grocery sector continuing to face a disrupted and difficult environment, retailers have done well to maintain their position as customer experience leaders.

“Grocery retailers were a lifeline throughout the pandemic, rising to the challenge of keeping people fed and focusing intently on consumer needs. 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 have to rethink their physical offering in earnest if they want to maintain footfall in their stores going forward.”