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Strategy and Transformation

Are Retailers Service Companies?

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Many retailers would say, “of course, we serve our customers.  In fact we provide very high-end service.”  Many others though would say, “We sell products to our customers.  We provide service when they ask for it either when they are in our stores, or when something goes wrong after they buy it.”
In a discussion on the trends in retail, and the oncoming challenges that all retailers face, a client after discussing the concept of “clientelling” – said to me “Are you saying we must become a ‘service company’?”,with a certain amount of cynicism.  I hesitated.  Was that what I was really recommending?  It struck me, “YES” I said, “yes that is exactly what I’m saying.”
But, it goes way beyond “clientelling” – that is, providing technologically aided means of either aiding the sales associate, or the customer themselves, with their in-store shopping process.  It means that you attempt to “serve” your customer throughout their shopping process.  Where does that start?
We use the following process cycle to describe the steps of the shopping process – with the consumer in the middle of course – perfectly connected (nirvana).shopper-journey_20140411095823_211506 (6)
The reality is most of us really do not “serve” the customer through this journey, or if we do, we do it in-store, not out of the store, or perhaps not even then.  For example, most of us go through our daily lives as anonymous beings in the world.  And, nowhere is this more true than most in-store shopping experiences.  How many times have you gone into a store, and they know your name?  Even in higher end retailers – do they know you?  Do they serve you?
As a retailer, what if you took this journey with your customer?  What would you think?  And, perhaps more importantly, how would you feel at each stage of this journey?  Would you feel like you’ve been served at every step?
Awareness Phase
For example, how do you think your customer feels when they’re made aware of your store offerings?
Are they made aware by seeing some form of advertising – TV, billboards, ad circulars?  Or, advertising by the consumer products company making the products?  Do they watch the advertising – it used to be the adage that we know 50% of what we spend on advertising is effective, just not which 50%.  But, now?  The effectiveness is much less than 50%, and even less the younger the customer.
And, promotions, how does it make them feel to be offered a discount without much, if any information on the product itself?  What does that say about value, other than “cheap”?  It often degrades the value of both the store and the product.
Engagement Phase
Leading retailers have already begun to “get to know” their customers allowing their customer to “opt in” to letting you, the retailer, have information on them – perhaps they signed up in a loyalty program (otherwise we now get into a “creepy” factor discussion).  By collecting and refining the right information about them, you are able to gain intricate insight about your customer and then offer them relevant information on products that they would be interested in.  You can make them aware due to their interest, instead of pushing coupons or email promotions at them for things they’ll never be interested in.  Customization of promotional efforts towards the individual consumers due to their interests will help the customer feel heard and most importantly, valued.  In turn, this creates loyalty for you across multiple channels.
Creating customer profiles, and then working to enhance the profile, is one way of getting to know your customer.
This can be augmented, as cosmetics retailer Sephora does, by using additional ways of serving – communities for example.Beauty Boards - Sephora
Beauty retailer Sephora is launching its own take on social shopping with Beauty Board, a Pinterest-meets-Instagram photo-heavy platform that encourages users to share and tag their “beauty looks.”
Folks who like dabbling with different looks can upload images, tag products and offer tips on how they made it all come together. It’s available at, Sephora’s mobile site and via its iPhone, and Android apps. You can also share your looks on Facebook, Pinterest, Twitter, and Google+.
You can also tag products used in posts, “love” a photo to save it for later and, of course, you can endlessly browse images as you dream up your latest look.
All of this information can help Sephora serve their customers better, but can also enlist the community to serve each other – there by helping everyone, including Sephora in the process.
Retail Equals Service
By putting yourself in your customer’s shoes, you can then start to imagine how you would like to be served at every step of the shopping journey.
Sound like hard work?  Big change from the way you do things today?  It may be, but starting with the mindset of viewing yourself as a service company, then putting pieces in place to truly serve the customer through every step of the journey – will earn you true customer loyalty and even more importantly, if done right the permission to engage.
With the technology now available today – from being able to build a 360 view of the customer, to social listening/engagement, to clientelling, to mobile shopping carts, mobile check out, to integrated customer service – all of these steps can be technically enabled to provide the service that customers want.
And, by the way – there is a very good chance if you do not serve your customer – someone else will.  Amazon?  Target? Walmart?  Many retailers are moving in this direction – will you be there to serve in the future?

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Peter Brandt

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