More than 1,600 retail workers lost their jobs on Jan. 31, as Sears Canada laid off employees and Best Buy Canada closed 15 big box stores. Retail experts quickly blamed the increase on Internet shopping and the imminent arrival of Target in Canada for the job losses. But Best Buy and Sears wouldn’t be vulnerable to these threats if not for a more fundamental problem: Lousy customer service. The big story in Canadian retail right now isn’t really about the rise of e-commerce or a new competitor. It’s that one of the central tenets of shopping—the customer is always right—is once again a life or death commandment.
Customers, of course, are not infallible. But the “customer is always right”—coined either by Marshall Field or Harry Selfridge—suggests shopkeepers must always remember that they exist to serve consumers, not the other way around. But shopping at a Best Buy, or one of the company’s Future Shop locations, is most often an exercise in annoyance rather than respect. Customers complain that sales staff were difficult to find and unknowledgeable or pushy when they did materialize. Sears suffered similar problems; in some locations, you are more likely to spot a Yeti than a sales associate. Both Best Buy and Sears trailed far behind competitors like Costco and Sam’s Club in pleasing their patrons, according to the American Customer Satisfaction Index (ACSI), an annual survey of 70,000 shoppers. More tellingly, they also scored far behind Amazon. And so, yes, customers are fleeing big box stores because shopping online is more convenient and cheaper. But they’re also switching to a competitor that’s actually treats them better.
Target also received exemplary grades from customers. As Richard Warnica explained in a recent issue of Canadian Business, the American chain has built its brand on offering a pleasant, enjoyable shopping experience. Each aisle in a Target store is wide enough to accommodate two shopping carts side-by-side and there’s no annoying Muzak. Marketing professor Robert Kozinets told Warnica: “Department stores aren’t known for being pleasant, but Target manages to do that.”
This is where the opportunity is now for brick-and-mortar retailers. They may not be able to compete with e-commerce for inventory, convenience or cost, but they can offer atmosphere, service and expertise. Consider Apple stores, with their Genius Bars dedicated to helping Luddites navigate technology, or Lululemon, where friendly staff ease first-timers into their yoga pants. Neither the Internet nor Target killed Best Buy and Sears. They just gave consumers a chance to flee to stores where they were, once again, always right.
Friday, February 1, 2013