Customer service – a key differentiator in retailing

We have all felt the growing frustration of waiting unnecessarily, being ignored or facing inefficiency when shopping. In these tough times, customers are more and more likely to reject bad service when a competitor can offer the same products and price without the hassle. Retailers can no longer view customer service as an option and providing a positive retail customer experience is vital. A coherent and successful retail service model is the differentiating factor between a successful and unsuccessful business.

Based upon research conducted by Customer Champions, on behalf of Skillsmart Retail, and utilising interviews with a range of retailers such as Waitrose and Marks & Spencer through to outstanding independent retailers, this article begins to cover some of the findings when it comes to retail customer service. You can download a fuller executive summary here.

The full report is available for purchase from the Retail Week website.

Key findings

In terms of the key findings from the research these can be summarised as:

• customer service is a vitally important differentiator across the retail industry. Regardless of whether the customer proposition is higher value or basic/simple, the challenge is to develop a retail service model that treats each customer as an individual and maintains satisfaction and loyalty levels.
• retail customer service strategies vary between larger chains and the smaller independents. As you would expect larger retailers tend to have a more formal strategy for the retail customer experience in place, although the overriding factor for both was the general ethos of key senior management / business owner.
• the challenge of directly linking retail customer service to the bottom line was for many an on-going one, with few believing they could now provide that direct link. However, there was a common belief that customer service would remain a key battle ground for many retailers going forward and benchmarking customer service would become a more common process when developing a retail service model.
• customer service training is encouraged by many retailers with the larger operating more formal training programmes that were supported by strong shopfloor observation and feedback. A significant number of retailers also operate some form of reward and recognition scheme based around the retail customer service experience.
• customer service measurement was often gathered through conducting mystery shopping but many retailers were now looking to supplement this with more direct voice of the customer input.

Retail Customer Service Model

Through a combination of desk research and Customer Champions’ industry experience a retail specific customer service model has been developed. This was then widely tested with retailers, who agreed it provided a very strong framework from which to deliver an excellent customer service experience.

In outline, the model, focused on traditional ‘bricks & mortar’ retailing, breaks down into three key layers:

1. Leadership

Many organisations reflect the drive of an individual and their personal focus on the importance of customer service. If this individual is senior within the retail business, it will greatly impact the culture and the emphasis placed on the customer experience. In small companies this will tend to be driven by the owner.

2. Enablers

The way that the retailer’s customer service vision is translated through policies and processes onto the shopfloor.

3. Customer Journey

The customer journey is described through a variety of touch-points which will vary from business to business. Starting with background research through to complaints handling, it provides a comprehensive checklist for any retailer to use and benchmark its customer service performance.

Recognising the increasing trend for customers to have relationships with retailers through multiple channels, the Customer Journey part of the model was enhanced by the development of a supplementary online version.

Future

This report draws on the experiences and opinions of 27 retailers, both large and small and the report features several customer service case studies of retailers both large and small. The findings have been combined with a review of the current thinking in customer service literature and other original research sources.

• Some retailers question whether the term “customer service” is in fact too narrow. It does not start and end with in-store experience it has to be owned by all employees.
• A frequent challenge was that retailers were struggling to provide consistent levels of retail customer service across all of their traditional outlets, and also the growing number of multiple channels, e.g. in store / online / mobile.
• The importance of linking the customer service approach, and the actual retail customer experience to the organisation’s brand values.
• Particularly during tough trading conditions the need to provide a strong link between a customer service focus and bottom line delivery was vital.

Some of the retailers interviewed have proven, and prize-winning, customer service processes. The most common recommendations were:

• customer service is a key competitive differentiator and should be seen as a long-term commitment and will not succeed if it is viewed only as a short-term tactic
• ownership of the customer service offer and the need for continuous improvement has to be driven from the top of the organisation – whether the owner-manager or the board
• measure from a customer’s perspective to get a true understanding of the retail customer experience
• customer knowledge has to be updated constantly as their views and behaviours change, and that knowledge should be used to drive retail customer service levels forward
• communicate effectively to all colleagues what they individually need to do and what the benefits will be to all

In the past, it seemed retailers had to make a trade-off between models of high-service or low-cost; convenience or high assortment/ranges (Oxford Institute of Retail Management, 2010, Productivity and Skills in Retailing commissioned by Skillsmart Retail). In the new retail marketplace, it seems they will have to forge more integrated solutions by developing a retail service model. So, their future offer might well have to be both high-service and value driven.

The full report goes into the issues surrounding retail customer service in much greater detail, and covers many other issues as well as the step by step Customer Service Retail Model. It also contains ten case studies of successful customer service approaches within retailing.

• The management summary of the report can be downloaded here. (needs a link)
• The full report can be purchased through Retail Week here (Needs a link)

Take the next step

For advice on how to use your customer service as a key differentiator, please contact us.

Share this