Disrupting Retail – Lets Start with Customer Service

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Sometimes we need to get back to basics.  I remember a day last winter when I sat in the shoe department of a large retailer in Toronto.  I had at least five pairs of boots to try on but I couldn’t find a single person to help me. It was close to lunch time on a Saturday. The store was busy and sales associates were trying their best to serve everyone.  I took a seat and decided to see how long it would take before I received assistance. 20 minutes. I sat down relaxed but fairly bored as I waited and waited for the sales associate to notice me.  When she did, 20 minutes after I sat down, she checked the stock for each pair of boots I had with me then she told me that none were in stock in my size. Sigh. Not the best use of a Saturday afternoon.  

With so many new technologies disrupting the retail sector, from artificial intelligence to augmented reality to fancy mobile apps, providing great customer service still matters. Everyone knows this but it doesn’t always feel that way as a customer.  How many times have you walked into a store, couldn’t find what you were looking for and walked out?  Or what about when you spent a lot of time researching online only to find when you arrive at a store that the sales associate has not heard about the product you were talking about? Retail is an exciting place to be right now but it is still difficult to properly execute on the dizzying amount of details that matter to the customer experience.  While digital is the way of the future, perhaps great customer service is still the way to get there.

A retailer that has done a really good job with customer service is Best Buy.  After Hubert Joly, took over as Best Buy’s CEO in 2011 he faced a long list of problems.  The company was struggling to compete with Amazon and was finding it difficult to combat showrooming. One of the first things that he prioritized was customer service.  He increased the quantity and quality of Best Buy’s store labour and trained employees in new categories such as virtual reality and smart home appliances in order to provide better service. This strategy has paid dividends for Best Buy. In 2017 Best Buy’s comparable sales were strong, up 5.6% over 2016 and in the second quarter of 2018 comparable sales were up 6.2%.

Oversized stores have a negative impact on the customer experience.  It is one of the reasons it took so long for me to be serviced that day last winter. The store was understaffed relative to its size.  What should retailers do with all of that excess space?  Perhaps Sears’ recent bankruptcy is a reminder that you need to disrupt yourself before someone else does it to you.    A good example of this is Netflix.  I am not referring to what it did to Blockbuster but what it did to itself when it moved from mailing content to streaming.  Or when Amazon created its Kindle business to compete with its print book business.  The retail sector is ripe for more disruption but in what area? Customer service is a great place to start.

Check in weekly for articles on digital transformation and customer experience innovation to learn what strategies businesses are using to accelerate their sales growth.

Sources

https://hbr.org/2018/07/to-see-the-future-of-competition-look-at-netflix?utm_campaign=hbr&utm_source=twitter&utm_medium=social

http://investors.bestbuy.com/investor-relations/news-and-events/financial-releases/news-details/2018/Best-Buy-Reports-Better-than-Expected-Second-Quarter-Results/default.aspx

http://www.businessinsider.com/best-buy-ceo-hubert-joly-interview-2018-3

Tricia McKinnon