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Home > Computers and Information Technology > Software > CRM & Customer Service
Customer Service in Retailing - UK
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- ISSUES IN THE MARKET
- Main issues addressed
- Main themes
- Abbreviations
- INSIGHTS AND OPPORTUNITIES
- MARKET IN BRIEF
- Customer service as a source of competitive advantage
- A good service experience is an essential element of a strong customer proposition
- Retailers are underdelivering on service - human factors a key culprit
- Best and worst - M&S ahead, electrical goods retailers underperforming
- The costs of delivering a bad experience - reversing the damaging ripple effect
- Leveraging complaints into business changing feedback
- Point of sale technology can create a more satisfying experience
- INDUSTRY INSIGHTS
- Service issues rising up the differentiation agenda
- Low service standards provide an opportunity to establish differentiation
- Tackling queues through self-scanning
- Tackling queues through workforce management systems
- Feedback strategies to include staff as well as customers
- Conclusion: Raising proposition awareness in staff contributes to service culture
- EMPHASISING SERVICE TO ESTABLISH AN ADVANTAGE
- Competitive environment creating pressure to raise service standards
- Key Points
- Service standards a key differentiator
- Key Points
- Low service standards create an opportunity
- Key Points
- TOWARDS AN INTEGRATED SALES/SERVICE CULTURE
- Service culture sits comfortably alongside a sales culture
- Key Points
- Engagement and interaction with customers stimulates both service and sales
- Key Points
- Good service should be delivered instinctively
- Key Points
- HOW ONLINE SERVICE STANDARDS DIFFER
- Managing a multi-stage process
- Key Points
- Personal contact versus automated responses
- Key Points
- Putting it right when things go wrong
- Key Points
- OVERCOMING WEAK SERVICE DELIVERY
- Bad attitude cannot be tolerated
- Key Points
- Intolerance of queuing
- Key Points
- Positive response to self-checkout technology
- Key Points
- Information delivery a vital area for attention
- Key Points
- No alternative to face to face contact
- Key Points
- DEVELOPING STAFF TO DELIVER GREAT SERVICE
- Employing the right people
- Key Points
- Accurate assessment of training needs
- Key Points
- Effective communication strategies
- Key Points
- Measuring performance
- Key Points
- Use of motivational and incentive schemes
- Key Points
- DEVELOPING THE CUSTOMER EXPERIENCE
- Focus on human factors
- Key Points
- Structured change
- Key Points
- Harnessing the power of complaints
- Key Points
- Delivering satisfaction for staff and customers
- Key Points
- INTERNAL MARKET ENVIRONMENT
- QUALITY OF ENGAGEMENT DEFINES SERVICE STANDARDS
- Degree of emphasis on engagement is a prime indicator of a retailer’s commitment to service
- Identifying critical engagement points provides the opportunity to deliver great service
- Pre-purchase information gathering
- Staff engagement in-store
- Gaining information and getting help once in-store
- Discussing needs and using staff to help assess the options
- Completing the sale
- After-sales service
- RISING OPERATING COSTS AND SERVICE STANDARDS
- Delivering better service experience without increasing staff costs
- Integrated sales and service ethos
- Cutting service standards a risk
- USING TECHNOLOGY TO IMPROVE SERVICE EXPERIENCE
- Self-scanning delivering service improvements
- Pre-pay terminals option
- In-store access to product information databases
- Improving staff levels through back office technology
- BRAND VALUES AND PROPOSITION DEVELOPMENT
- Service ethos of growing importance
- Establishing brand values and reputation
- Monitoring the dynamics of change
- BROADER MARKET ENVIRONMENT
- SERVICE STANDARDS IN THE WIDER CONTEXT
- Is retail better or worse than other sectors?
- Are UK consumers tolerant of bad service or demanding of good service?
- National Customer Service Week - raising the profile of good service
- ICS launched a UK Customer Satisfaction Index in June 2007
- COMPETITION AND GROWTH OF ONLINE LEAVES NO ROOM FOR COMPLACENCY
- Tightening economy likely to make it harder to win spend
- Growing presence of online shopping increases customer options
- AGEING POPULATION AN OPPORTUNITY FOR SERVICE-CENTRIC RETAILERS
- Main source of population growth is the over 45s
- Figure 1: UK population, by age, 2001-11
- Older people appreciate good service and will pay a premium for it
- Older people less inclined to use the Internet and will remain store-focused
- WHO’S INNOVATING
- Tesco “one-in-front” queue busting cameras keeping it ahead
- Predictive monitoring by Tesco will assist queue management
- Asda’s Smiley Squad
- Bhs using customer feedback to recognise staff performance
- Lloydspharmacy automating dispensing services to create staff time for consultation
- Healthy advice
- Selfridges’ Wonder Bar
- Mamas & Papas bumping ahead
- Shopping centre acknowledging good service provision
- MARKET IN CONTEXT
- TESCO
- Customer first ethos at the heart of its proposition
- “One in front” delivered through new technology
- Queues remain a target for attention
- J SAINSBURY
- Principles of recovery
- Recent turnaround based on improving service levels
- Leading by example
- ASDA
- “Common sense” retailing winning new customers
- Warm and Friendly way to service
- Asda’s Smiley Squad
- Self-scan driving service improvements
- MORRISONS
- “The food specialist for everyone”
- Recovery phase being driven by operational efficiency improvements
- Business review highlights in-store service as key attribute
- MARKS & SPENCER
- Service standards an integral element of its brand culture
- Carried away by good service
- Healthy advice
- JOHN LEWIS PARTNERSHIP, INCLUDING WAITROSE
- Unique ownership structure contributes to service culture
- Setting and maintaining high service standards
- Passion for selling
- HOME RETAIL GROUP, INCLUDING ARGOS AND HOMEBASE
- Aiming for high customer service standards within a multi-channel operation
- Leader in use of point of sale technology
- Find & Pick Up and Instant Alert Service
- B&Q
- Lost in space
- Service squads targeting customer queries
- Recognition of its inclusion policies
- WOOLWORTHS
- Self-selection minimal staff contact operating model
- Faith in conga queuing
- Range extensions delivered through in-store ordering
- DSGI (INCLUDING CURRYS.DIGITAL AND PC WORLD)
- Technical focus of these businesses creates strong need for sales and service skills
- Reserving items online for collection from a local store
- PC World launches fourth shopping channel in 2007
- Tech guys go national in July 2007
- Altering the mind set
- COMET
- Best price, best choice, best service
- Deliberate Customer Journey service initiative a key element of brand relaunch
- Advertising campaign focusing on staff training and service standards
- Comet on Call
- BOOTS
- Trust in Boots
- Longer opening hours to deliver enhanced pharmacy services
- Till receipts trigger customer feedback
- IKEA
- Product-led proposition
- Customers remarkably tolerant of low service standards
- Margin for improvement
- Market pressure creating change
- AMAZON
- Pioneer of online retailing and continuing to set high service standards
- Paying for convenience
- Prime numbers
- WHAT CONSUMERS THINK OF SERVICE STANDARDS
- Satisfaction levels generally high but retailers not “wowing” many customers
- Results show extent of opportunities to develop the customer service experience
- Scope for “wowing” more affluent consumers
- Low levels of dissatisfaction characteristic of responsiveness of the industry
- Sizeable element of ABC1 shoppers up for grabs
- Conclusion - no room for complacency
- MAJORITY OF CONSUMERS SATISFIED WITH SERVICE RECEIVED
- Majority of high spending customers are “generally satisfied” with service standards
- Relatively low numbers of “very satisfied” shoppers
- Relatively low numbers of “dissatisfied” customers
- Figure 2: Satisfaction with customer service standards, June 2007
- Who are the most satisfied customers?
- Significant influence of peer group selling
- Stores’ influence on shoppers
- Who tolerates average service standards?
- Yet, more of those in affluent groups also gave negative responses
- Younger affluent shoppers open to persuasion
- Who are the least satisfied customers?
- WHAT CONSUMERS THINK OF SERVICE STANDARDS - DETAILED CONSUMER DEMOGRAPHICS
- Figure 3: Relative levels of satisfaction, by socio-demographic detail, June 2007
- THE MAKINGS OF A GOOD SERVICE EXPERIENCE
- Most desired attributes relate to interaction with staff
- Good product knowledge commands respect and wins sales
- Going the extra mile to answer queries
- Turning an out of stock into an opportunity
- Conclusion - targeting human factors will improve shoppers’ perceptions
- OBSERVING COMMON NICETIES APPEALS MOST
- Satisfaction starts with a smile
- Product knowledge defines staff’s role
- Helpfulness has to show through
- Going the extra mile
- Closing the sale properly creates impetus for repeat visit
- Online environment requires rapid response
- Figure 4: Elements of a good service experience, June 2007
- Good attitude and helpfulness has widespread appeal
- High expectations of product knowledge among the more affluent
- Going the extra mile can win sales from competing channels
- Stores with pleasant staff
- More affluent online users expect prompt reaction to queries
- THE MAKINGS OF A GOOD SERVICE EXPERIENCE - DETAILED CONSUMER DEMOGRAPHICS
- Figure 5: Most important factors contributing to a good service experience, by socio-demographic detail,
- June 2007
- Figure 6: Other factors contributing to a good service experience, by socio-demographic detail, June 2007
- THE MAKINGS OF A BAD SERVICE EXPERIENCE
- Enough of the right people, in the right place, at the right time
- Attitude is everything
- Developing product knowledge, people engagement and communication skills
- Breaking the cycle
- Frequent small initiatives help maintain customer-centric focus
- Conclusion - staff need to know how customers expect them to behave
- ACCURATE STAFF SCHEDULING WILL ADDRESS NEGATIVE ISSUES
- Unopened checkouts when queues are forming is main grievance
- Staff must project a sales as well as service ethos
- Staff need to be visible and accessible on the shop floor
- Access to back up needed to enhance staff knowledge
- Lack of responsiveness a factor for online shoppers
- Figure 7: Elements of a bad service experience, June 2007
- More affluent most sensitive to causes of bad experience
- Staff need to be attentive to older people…
- …but must not overdo it
- Men want staff that know about what they are selling
- More affluent families frustrated by lack of product knowledge
- THE MAKINGS OF A BAD SERVICE EXPERIENCE - DETAILED CONSUMER DEMOGRAPHICS
- Figure 8: Most important factors contributing to a bad service experience, by socio-demographic detail, June
- 2007
- Figure 9: Other important factors contributing to a bad service experience, by socio-demographic detail,
- June 2007
- Figure 10: Least important factors contributing to a bad service experience, by socio-demographic detail,
- June 2007
- SERVICE STANDARDS - BEST AND WORST RETAILERS
- Majority of retailers delivering adequate levels of satisfaction
- Modest numbers of satisfied customers suggests scope for improvement
- Marks & Spencer’s advantage likely to increase in future
- Electrical goods retailers have the worst reputation for service
- Conclusion - big impact with small changes
- OVERALL LEVELS OF SATISFACTION MODEST
- Research indicators employed
- Customers of leading retailers are underwhelmed by service standards
- Marks & Spencer marginally outperformed Asda and Tesco
- Marks & Spencer also has the strongest balance of responses
- A relatively small proportion of shoppers experience inconsistent or poor service
- Leading household goods retailers attracted most criticism for poor service
- Four companies have a negative balance
- Figure 11: Retailers rated for giving good and poor service, June 2007
- Those viewing standards favourably reflect regular user characteristics
- Value of further analysis lies in who is not attracted to specific retailers
- Good but not exceptional numbers of regular grocery shoppers rate the service they get as good
- Many are tolerant of indifferent service standards or do not attach importance to them
- Men not as enamoured of service standards of clothing and department stores as women
- Marks & Spencer underperforms among young affluent shoppers
- Women less impressed with household goods retailers’ service standards than men
- Women also less impressed with online retailers’ service standards
- Superdrug has it all to do to attract ABC1 shoppers
- ABC1 families most vociferous about inconsistent and poor service
- Some shoppers are tolerant of poor service
- SERVICE STANDARDS - BEST AND WORST - DETAILED CONSUMER DEMOGRAPHICS
- Figure 12: Grocery retailers’ ratings for consistently good levels of service, by socio-demographic detail,
- June 2007
- Figure 13: Clothing and department stores’ ratings for consistently good levels of service, by sociodemographic
- detail, June 2007
- Figure 14: Household goods retailers’ ratings for consistently good levels of service, by socio-demographic
- detail, June 2007
- Figure 15: Online retailers’ ratings for consistently good levels of service, by socio-demographic detail, June
- 2007
- Figure 16: Health and beauty retailers’ ratings for consistently good levels of service, by socio-demographic
- detail, June 2007
- Figure 17: Retailers’ ratings for inconsistent and poor levels of service, by socio-demographic detail, June
- 2007
- THE IMPACT OF BAD SERVICE
- Bad service changes shopping behaviour
- Strong ripple effect of bad service can be turned to positive effect
- Standards directly affect commercial success
- Conclusion - high business risk posed by bad service makes strong case for investment
- IMPACT SPREADS BEYOND THOSE DIRECTLY AFFECTED
- Direct impact of bad service is significant
- Bad service could cost a retailer half its customers…
- …but ripple effect also spreads to friends and beyond
- Considerable credibility gap
- Mixed reaction to online service standards
- Figure 18: Reaction to bad service experiences, June 2007
- More women might defect but more men have actually done so
- ABs and older people more reactive to bad service
- AB families’ extensive networks compound the ripple effect
- Slight bias to ABC1s among those perceiving a credibility gap
- Online attracting younger consumers but frustrating them as well
- THE IMPACT OF BAD SERVICE - DETAILED CONSUMER DEMOGRAPHICS
- Figure 19: Most likely reactions to bad service experience, by socio-demographic detail, June 2007
- Figure 20: Other reactions to bad service experience, by socio-demographic detail, June 2007
- CUSTOMER COMPLAINTS AND THE SERVICE EXPERIENCE
- Putting it right when it goes wrong
- Staff need to be empowered and encouraged to take responsibility
- Right response to right people required
- Conclusion - free feedback needs to be acted on
- PLENTY OF EXPERIENCE OF COMPLAINTS
- Only 20% of respondents have not made a complaint
- Generally good levels of satisfaction with response to complaints
- But many complaints not resolved at first time of asking
- Not all staff using complaints as an opportunity
- Negative approach by staff not widespread but neither is ownership of problem
- Figure 21: Experience of customer complaints, June 2007
- Nine out of ten ABC1 families have complained about a purchase
- ABC1 families have high levels of satisfaction having complained
- ABC1 pre-family and family adults are most dissatisfied with complaints
- CUSTOMER COMPLAINTS - DETAILED CONSUMER DEMOGRAPHICS
- Figure 22: Most common experiences of customer complaints, by socio-demographic detail, June 2007
- Figure 23: Other experiences of customer complaints, by socio-demographic detail, June 2007
- FUTURE AND CONCLUSIONS
- Always room for improvement
- Operational shortcomings main cause of annoyance to customers
- Customers have modest expectations of retail store staff
- Bad service is bad for business
- The future - empowering staff with technology
- The future - delivering good service in a multi-channel world
- APPENDIX: RESEARCH METHODOLOGY
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