Retail Industry Throws $2.4B Down the Drain by ‘Ghosting’ Customers

There is a significant gap in customer engagement and responsiveness within the retail industry, as over 50% of customers who provide feedback, ask questions, or leave reviews online are being ignored, a phenomenon referred to as "ghosting." Comarketing cloud provider SOCi has released findings from its 2023 Local Visibility Index (LVI), shedding light on the trend of "ghosting" observed among retailers. This failure to engage with customers online is estimated to cause a huge financial impact, resulting in an annual loss of $2.4 billion for the U.S. retail industry.

The findings revealed that, on average, brands tend to disregard 54% of online feedback, reviews, and questions across popular platforms like Google, Facebook, Instagram, and Yelp. Specifically, a staggering 92% of customer inquiries posted on retailer Google profiles, including important questions like store hours on specific occasions or product availability, remain unanswered.

"Retailer 'ghosting' is an alarming phenomenon with serious implications for brand reputation, customer loyalty, and online visibility. When retailers ignore their customers online, they inadvertently send a message that the customer experience isn't a priority. It's akin to retail employees ignoring shoppers in-store, and this type of behavior has a significant impact on revenue and sales," said Monica Ho, CMO, SOCi.

"Invisibility" on search engines  

SOCi's research uncovered that neglecting customers leads to a diminished online presence on search engines. Search engines like Google take into account engagement indicators, such as responses to inquiries, feedback, and reviews, when determining the ranking of online listings. By proactively engaging with customers and responding to their needs, retailers can enhance their search engine rankings, which in turn boosts brand visibility and contributes to increased in-store sales.

In addition, the study indicates that ghosting customers has significant financial implications, with multi-location retailers losing an estimated $58,000 in sales per location, highlighting the importance of actively addressing customer feedback and reviews to maximize online performance and revenue potential.

"Addressing online customer feedback – ranging from questions to reviews – should be an integral component of a retailer's overall omnichannel digital marketing strategy. Thankfully, AI and automation present a game-changing opportunity for retailers and marketers to tackle the issue of ghosting customers online. By implementing these technologies, they can deliver timely and personalized responses to feedback, reviews, or questions, at scale, while enhancing customer satisfaction and fostering a more positive online experience," added Ho.

According to the research, responsive retailers achieve nearly double the year-over-year revenue growth compared to their less-engaged counterparts. Furthermore, they can drive four times the number of consumer actions through online channels and generate an impressive 149% more engagement on social media platforms, further enhancing their brand presence and customer interactions.