Rising customer expectations have dominated headlines over the past few years, with the consensus across sectors being that people are getting pickier. It’s not surprising. Today’s shoppers have seemingly endless options to choose from when deciding how and where to make a purchase. It’s only natural that, when they decide where they’d like to go, they expect the brand to hold up its end of the deal. When the retailer doesn’t deliver, why wouldn’t a shopper take note for next time?
Retailers have spent countless hours and dollars on targeted fixes designed to improve experiences, cultivate loyalty and establish trust with their customers. Streamlined checkouts, personalized promotions, exclusive perk programs, relaxed return policies and other in-store initiatives have all been popular strategies in the digital era.
These tactics do move the needle. ACSI’s 2026 Retail and Consumer Shipping Study showed modest improvement in satisfaction scores in several categories early this year. However, the study illustrated that customer experience (CX) strategies that start and end with customer-facing touchpoints inevitably hit a ceiling.
The CX Ceiling
Later ACSI analysis noted something critical. The distance between top and bottom performers in specialty retail is compressing—and it’s not because everyone is moving up. Quite the opposite; the floor has moved up and the ceiling has fallen over the past decade and change. No brand has scored above 88 since 2013. In the preceding 13 years, high-scorers routinely scored up to 91.
These findings clearly illustrate the dynamics at play for CX in retail. Former leaders plateaued while laggards caught up on the visible gaps. Essentially, everyone has adopted the same consumer-facing playbook, and few pushed beyond it. In the meantime, shoppers became accustomed to those surface-level improvements; streamlined interactions and improved floors no longer boost sentiments in the ways they once might have.
At the same time, another shift in consumer behavior has been happening. Expanded omnichannel access, a decline in online-only purchasing and ongoing economic volatility have come together to encourage a new kind of intentionality among American consumers.
Sensormatic Solutions data shows year-to-date U.S. store traffic down 2.7% year-over-year. Conversion rates this summer, though, are up 5.2%. Simply translated: Shoppers are making fewer trips, but they’re buying more reliably when they choose to make a visit.
This is a bit of a double-edged sword for retailers. On the one hand, it means that shoppers who come through the door are more likely to make a purchase. They arrive knowing what they want, they trust that you have it, and they’ve already decided to buy.
But that also makes failing to stick the landing more costly. A shopper who used to visit weekly gave retailers several chances to get it right. When they visit only once a quarter, the math changes considerably.
Finding the Fix Upstream
Adapting to this new dynamic may be more straightforward than retailers think. In fact, the challenge at the intersection of these factors has a fairly clear-cut solution: make sure your inventory is accurate.
It’s somewhat of a left-field suggestion. Inventory management and supply chain issues are traditionally regarded as loss prevention or logistics problems, but their impact on CX cannot be denied now that we can connect the dots from source to store.
A recent consumer report found that 78% of American shoppers encountered an out-of-stock or low-stock item in the 90 days preceding the survey. More than half (57%) said items marked available online were not in stock when they arrived at the store. That’s a problem when shoppers research ahead and expect the store to hold up its end of the bargain.
Another report gives a sense of just how big a problem it is. Just under half (45%) of respondents say they purchase from an alternative retailer if they hit an out-of-stock at a preferred brand. Most (82%) respondents said frequent out-of-stocks with a go-to brand would make them try a competitor; nearly two-thirds (62%) said they have already switched from a preferred brand. One-quarter say stockouts damage their trust in the brand.
The good news is that this isn’t a call for an overhaul of systems. Most retailers already own the tools that solve this; they just need to change how they use them. The first step is moving tagging upstream. Applying RFID and EAS labels at the point of manufacture folds supply chain data into the same systems retailers already run in stores.
This allows retailers to integrate and centralize data across sources to get a better sense of where traffic, inventory, sales and the rest intersect. A stockout that only shows up as inventory shrinkage illustrates just part of the impact. The item cost is only the baseline price. Retailers need to translate that missing item into the lost sale and the lost consumer confidence that comes with it.
These changes enable retailers to address four major CX challenges that have been traditionally siloed into operational categories:
- Inventory accuracy. Knowing what’s en route is as valuable as knowing what’s on hand, particularly as in-store pickup options continue to gain popularity.
- Labor allocation. Associates who aren’t hunting for stock can spend more time helping customers. The same goes for associates who aren’t hand-counting items or tagging merchandise.
- Supply chain performance. A demand planning miss, a receiving error and an associate who can’t find the stock all land the same way: the retailer didn’t deliver. Seeing source-to-store movement enables retailers to evaluate partner performance so they can address shipping issues before they become customer misses.
- Total retail loss. Losses that originate at the manufacturer, in transit or in the storeroom tend to be counted against operations, but the full impact is much bigger.
A New Point of View
The past few decades have seen retailers adapt and change alongside their customers. Expectations rose, retailers answered— and it worked. But, with time, those improvements became table stakes. What was once a differentiating advantage became the floor.
Now, retailers must reinvent CX once again, and this time, the headroom sits upstream. It sits in the places that shoppers never see but certainly feel. The solution is to see what the shopper sees. They don’t distinguish between a supply chain miss and a service miss, so the scorecard shouldn’t either.
AUTHOR BIO
As President of Sensormatic Solutions, Tony D’Onofrio is responsible for strategic planning initiatives that support the brand’s ongoing innovation and industry-leading solutions. He has spent over three decades in the retail industry, and his work has played a prominent role in retail’s journey into the digital era both as a business leader and a consultant.
Tony’s work is informed by a passion for retail and a deep knowledge of the power of technology to transform operations. Of his more than 30 years in the retail industry, Tony spent more than 20 of those years at Sensormatic Solutions, most recently as the Chief Customer Officer in 2018. Since that time, Tony was an advisor and board member of leading computer vision and Internet-of-Things companies, led a global security business, and mentored multiple companies in Silicon Valley. His career has included executive roles in both security and information technologies including NCR, Midsouth (IBM Integrator), and more recently Prosegur Global Retail.
Tony holds an MBA from Cleveland State University and is a graduate of Case Western University’s undergraduate program. He is also CEO of consulting and advisory group TD Insights, one of Thinkers360’s Top 10 Global Thought Leaders for Retail, and a recognized global top 100 retailer and technology influencer. Tony is also a recognized global social media influencer in retail, security and emerging technologies, hosting long-standing podcasts, webinars and speaking regularly on new retail technology and futurist retail trends.
