Having produced an excellent display to defeat Fiorentina last time out, Inter were slow out of the blocks at Stadio San Paolo, falling 2-0 down inside six minutes as Piotr Zielinski and Marek Hamsik scored.
They never looked likely to get back into the match and now sit seven points behind their fifth-placed hosts, leaving Pioli to rue a poor showing that was compounded by Lorenzo Insigne's second-half goal.
"It is a step backwards compared to recent matches, as above all the initial approach made all the difference against a quality side like Napoli," he told Mediaset Premium.
"Conceding two goals at the San Paolo so early means it is difficult to get back into the game. We did have opportunities to score, but we failed to convert them.
"We need more care and determination in defence, so that will take time. Napoli have quality players and moved the ball well. I think Jose Callejon was perhaps offside on the first goal, but even then we should've covered Piotr Zielinski's run better.
"We are working on the tactical, physical and psychological levels. We lost our balance and took the wrong approach. I also saw positioning errors on the goals we conceded."