Jeremy’s Journal

About this time every year the retail sector seems to have a bit of a meltdown. A few brands are visited by the Grim Reaper and the snow attempts to play as much havoc as possible. Station car parks are closed, trains run late, shops have gaps on shelves where deliveries didn’t get through, staff find it impossible to get to work and the general British attitude of ‘it’s all rubbish’ quickly surfaces. 

And every year we ask ourselves the same question: why are we not better prepared? In a similar vein to Christmas, we have had winter every year for as long as anyone can remember, yet we still seem startled when the snow falls and everyone decides to let our service industry take a few days off.

Due to the snow, we learn that the retail sector takes a financial hit that is increasingly dramatic. We lose a huge amount of much-needed cash that we simply shouldn’t accept will just disappear because a few inches of snow fell over the weekend. 

What would we do if our store and our family income depended on the daily income from having an open sign in the window at the expected times? Or what would happen if the CEO was due to visit our store on the snowiest day of the year and would not be too pleased to find we’d not made it in that day? 

My point is this. Of course the snow is dangerous and scary and cold and unpleasant. However, in the service industry, our job is to serve our customers, and think of them before we think of ourselves. Hotels don’t close in the snow. TV channels don’t stop broadcasting. Maybe with a bit of planning, forethought and the agreement that ‘customers really do come first’ would help stop our annual disappearance of the much needed winter revenue. 

Sometimes we need to put our customers’ needs before our own. It was heart-warming to see photos of Sainsbury's delivery staff dragging sledges uphill to ensure customers received their purchases on time (another example of how the online world can deliver an experience that matches up with the in-store customer journey). I applaud the convenience store chain One Stop who keeps a number of stores open for four hours on Christmas Day to ensure customers can get their last-minute bread sauce and brandy butter. This commitment to their customers does wonders for the community, enhances their brand reputation and in some locations makes more cash in these four hours than on any other day of the year. Now that’s smart retailing.

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We all know that trading in the retail sector is tough right now. Nobody is finding it easy, and we’ve seen this week yet another example of a retailer, JJB, struggling to survive.

However, at the Retail Conference in London last week, we saw examples of retailers who are demonstrating genuine success stories in this gloomy era, with the most noteworthy case study being Pets at Home. And while selling dog blankets sounds a million miles away from selling football boots, there are actually a good number of similarities between JJB and the pet retailer. Both claim to be experts in their field. Both focus on one specialist category. Both have a large portfolio of large stores across the UK. And both have their head offices in the north-west of England.

But maybe that’s as far as the similarities go. At the Retail Conference, Pet at Home People Director Ryan Cheyne talked with great passion about how they have made great efforts to engage their colleagues (yes, ‘colleagues’, not ‘staff’), listen to them and ensure they are fully trained and have all the necessary tools to do their job well. Conversely, a previous retail director of a sports retailer once told me ‘in our sector, our staff come in, nick a few pairs of trainers, wait until they get caught, then move onto another sports retailer…I don’t trust any of them’.

Ryan also talked about how colleagues are empowered, such that even the most junior team members are able to offer refunds and exchanges to customers without a fuss. At a similar sports retailer to JJB, a former training manager told me that staff are told to ‘watch out for any customers bringing shoes back, as they’ve probably stolen them in the first place’.

And finally, in addition to gathering constant feedback on the customer experience, Pets at Home are seriously considering measuring the service the shops receive from the Support Office (that’s ‘Support Office’, not ‘Head Office’). Who would dare imagine Dave Whelan giving this initiative a green light? Overall, with both staff and customers apparently being treated with contempt and distrust, there’s no great surprise that some brands in the sports retail sector are having a hard time. However, as Pets at Home has shown, if you engage and empower your colleagues, listen to the voice of your customer and ensure the whole business is prepared to work as one, then there’ll surely be a lot of light at the end of the tunnel.

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So, the success of the Jubilee and Andy Murray at Wimbledon, as well as England’s mildly respectable showing at Euro 2012, has made the first half of summer rather enjoyable despite the awful weather. With the Olympic and Paralympic games to come in London, the summer of 2012 looks set to be a successful one for the nation and retail in particular, despite European-wide economic despair.

This has been backed up by the British Retail Consortium’s latest figures that show sales, on a like-for-like basis, increased by 1.4 per cent compared with June last year. Total sales, taking into account new store openings, increased by 3.5 per cent.

Shops are selling Union Jack dresses, cakes, napkins and bunting like they’re going out of fashion.  The Olympic torch-bearers are coping with the comedy outfits and eBay temptations, and are leaving a fine trail of enthusiasm and positivity in their wake.  And there are street parties and Olympic-themed barbeques abound, thus ensuring we cannot fail to have a good time over the next couple of months.  This will all lead to additional spend in our stores, higher frequency of last-minute dashes to buy some Pimms at 10.45pm on a Friday night and, without doubt, a well-needed boost to our general mood and personal happiness.  

But what happens afterwards?  I’m not too concerned about the short-term, as late-August will most likely become an end-of-season hangover with half the population heading overseas for a couple of weeks.  No, I’m thinking about this time next year, the year after, and other years when we don’t have global events on our shores to boost our economy and bring in tourism.  Many other nations have annual events that, by default, lead to a significant uplift in spend as tourists (both homegrown and foreign) plan visits to these destinations.

A variety of examples spring to mind. The Rio Carnival. Queen’s Day in Amsterdam. The Nadaam Festival in Mongolia.  La fiesta del Pilar in Zaragoza, Spain.  The list goes on (I’m sure you can think of plenty of others – Michael Palin and Simon Reeve seem to stumble upon these every time they arrive at another port.)  But my point is this.  Isn’t it about time our nation had an annual event that spurred levels of tourism at a traditionally quiet time of the year?  

How about turning St George’s Day into an annual festival?  Seeing as we have little interest in St George himself, we could rename this ‘UK Freedom Day’ when we put on street parties, spend time actually talking to our neighbours and spend a little extra cash as a result?  All we would need would be some UK figureheads from all our respective nations to lend their support (think Ewan McGregor, Tom Jones, James Nesbitt and Gary Barlow) and we’re in business.

We could have the festival on the nearest weekend to 23rd of April so most of us would not need to take time off work, limiting reasons for the commercial sector to get nervous.  On the bright side, there would be something exciting for the public to look forward to that could generate much goodwill  as well as becoming an annual  ‘Launchpad for Summer’ that created extra revenue.  At the same time, we could bathe in the confidence that millions of extra tourists will be visiting our shores and putting additional pounds in the pockets of our hotels, restaurants and shops. 

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New research report analyses impact of customer service across the UK on brand loyalty and sales

12 June 2012, London, UK – Customers who experience positive staff interaction and assistance will spend on average 39 per cent more than those who are not helped or greeted.

At a retail conference last month, a senior operations director of a 300+ chain was talking to me about their long-term plan for ‘staffless stores’. Their vision is to make stores both visually appealing and incredibly easy to navigate, so they could function perfectly with a skeleton workforce in place on the shop floor.

Initially, this certainly sounded feasible and relatively clever. After all, we happily shop on Amazon without a member of staff showing us how to find the travel section, or where to go to find the latest box set of Downton Abbey.

However, the conversation then moved onto restaurants, as there are a surprising number of similarities with the retail sector. No, we can’t buy our Whoppers online, but we can go to self-service restaurants where service barely has a part to play, rendering them practically ‘staffless’ (think service station cafes or mid-range hotel breakfast buffets).

But, not once in 15 years of consumer research have I ever heard a customer say they were ‘delighted’ with a staffless restaurant. The operation may well be quick and efficient, but for most of us, a little personal interaction can have a very positive impact.

Turning back to retail, clear parallels can be drawn. Yes, we can find things on the shelves without help (most of the time). Yes, we are able to find the right section of the shop with a little bit of nouse and some helpful signage. But isn’t the whole concept of staffless stores simply missing the point of why we like going out to shop in the first place, rather than using the ever-so-easy internet?

If we’re going to have a bricks and mortar element of our brand, let’s make sure we do it properly. You never know, providing good and friendly service might actually create customer loyalty that leads to increased sales, rather than simply draining our resources….

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“With less than 100 days to the start of the Olympics, already we’re experiencing a mix of excitement and enthusiasm coupled with anger and anxiety. Being British, we take it upon ourselves to find a negative angle and have no difficulty imagining this huge UK-wide festival to be a downright disruptive influence on our summer traffic flows and an unnecessary drain on our GDP.

However, I have a very different view. Which retailer wouldn't want millions (yes, millions) more customers coming to their town in July, spending a total of more than £17 billion? How many other countries would jump at the opportunity of showcasing their brands to a global audience But here's the rub. Many of our retailers will be providing the same, if not worse, levels of customer service to all these millions of new customers, who will then go back to their respective homes and talk about their experiences. How often do we see appalling customer service at Christmas parties, with the common reply being 'we were too busy to cope'? (which in itself is bizarre...it's not as if Christmas is a new phenomenon nobody saw coming).

This is our chance to provide all customers, both regulars and first-timers, with an outstanding experience. In the advent of social media, the knock-on effect of word-of-mouth can make or break a business in over the next 24-36 months. Let's use the time now to ensure all staff are fully trained and get into the swing of the party that we fought tooth and nail to host. In a struggling economy, this is an opportunity we can't afford to pass up.”

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http://www.mycustomer.com/blogs/jeremy-michael/olympics-opportunity-retailers-cant-afford-pass

A recent study showed that over 50% of meals eaten outside of the home took place in a quick-service-restaurant.  Essentially, as this figure has increased over the past year, the message is that more often than not, we are now dining out on more fried chicken and nuggets than posh pasta and decent pub grub. 

Shocking?  Maybe.  It  certainly sounds surprising that more dining experiences take place at a fast-food outlet than in one of our many casual-dining high-street restaurant chains.  With so many people and families eating out on such a frequent basis, it is more crucial than ever to have happy, loyal customers.  When a business can turn a one-time transaction into a repeat customer, it’s preserving its place in this volatile economic point in time.

I travel around England talking to companies about what makes a customer come back to spend more money in their restaurants.  There isn’t a magic recipe that fits for all outlets, but by listening to the voice of the customer, a store can uncover what it is that brings visitors back time after time. 

A perfect example of a restaurant getting this right is T.G.I. Friday’s, who spend time and energy finding out which elements of the restaurant experience have the greatest impact on customer loyalty, and then agreeing which actions to take as a result (you can find out more about this in our case study here.)

For T.G.I. Friday’s, it’s about creating a fun and unique environment.  But for some brands the key driver of loyalty may be speed of service (especially in a QSR location), taste of food or an employee’s ability to build rapport on the shop floor.  It’s also important to appreciate that these drivers of Absolute Loyalty will vary by customer type (I particularly enjoyed the quote from Carrie Longton from Mumsnet who said ‘We often recommend somewhere simply because the staff were nice’).

There are a lot of reasons why shoppers shop and diners dine where they do.  Uncovering those reasons and delivering a consistent experience will certainly bring more customers into your business. 

Personally, I am looking forward to a positive year ahead. We have the Queen’s Jubilee in June, the Euro 2012 football championships (which will be a great chance for Poland and Ukraine to be viewed in a positive light), followed by the Olympics in the UK. With all of these great events, our restaurants and retail stores have the ability to show both their customers and employees a fantastic time.

One great example of superior customer service is my local Italian deli: the busier the place, the happier everyone is. Nobody minds waiting a minute or two longer, because the service is worth hanging around for. The staff feels the benefit of the buzz they have created themselves—which is very much in line with the FISH! Philosophy from Seattle. The employees are empowered to provide the customer with a memorable experience and enjoy their jobs while doing it. (As a point of note, I saw a friend yesterday who lives in Canada. He’d never heard of the FISH! Philosophy but was very familiar with the actual fish stall at Pike Place Market. I asked him what he thought of it. ‘Phenomenal’ was the reply, just showing how hard-earned reputations spread a long way.)

 We commonly find ourselves more accepting of poor standards when things are busy (As an aside … why is this? Retailers knew Christmas was going to happen in December; shouldn’t they have prepared for more traffic so service doesn’t have to suffer?), but I think it would be beneficial to take notice of my deli. This place is taking the time to make sure the attributes they can control—such as service and product—are worth the wait.  

 2012 is going to be a fantastic year with lots of positives already scheduled to take place in the UK. Let’s reap the benefits and enjoy the success coming our way. It’d be a shame to be too British about it and find reasons to moan before we’ve even got going.

A shoe retailer is trialing a new concept, whereby one of the walls in the store is a giant electronic flat-screen. This huge screen shows all types of shoes and the customer can simply touch on one to learn more about it, view similar designs and see the shoe in a multitude of colours and styles.

Very clever indeed.

At the end of the presentation, a female delegate asked one of the best questions of the day. Taking a bold step away from the general euphoria around the new technology, she bravely asked, ‘If only one person at a time can use this clever techno-wall, won’t that simply upset all the other customers that aren’t able to play on it…and surely that’s not a good thing for the retail industry?’

Silence in the audience. And, notably, silence from the speaker.

I was tempted to get up and applaud. Technology is a brilliant thing, don’t get me wrong. But surely it’s supposed to augment the experience, not cause an unwelcome distraction?

At the same time, the delegate next to me commented in a muffled tone, ‘This techno-wall sounds brilliant…it’s the perfect way to get customers to buy something without having to talk to any staff.'

And, despite nodding in agreement, I found this particularly upsetting. We now live in a culture where many retailers believe customers are better off if they can actually avoid interacting with their staff. Self-service tills? Yes, please. Techno-walls?  Sounds fantastic.

How did this happen? At what point did the retail industry become such a torrid place to work that our staff actually don’t want to be there? There’s been a lot of talk recently about Absolute Loyalty, but this has been primarily between customers and retailers. How about Absolute Loyalty from staff to the company they work for? Or, and here’s a crazy idea, how about Absolute Loyalty from employers to their hard-working and often under-appreciated employees?

Now wouldn’t that make a change? And surely a change for the better, where the resulting impact could be happier and better motivated staff. In turn, this could make interaction between staff and customers something to be proud of rather than something to shy away from. 

We frequently witness ‘staff friendliness’ being one of the key drivers of customer loyalty. And with customer loyalty being intrinsically linked to sales, surely we need to take this seriously? It’s just a pity we can’t get the techno-wall to make friendly chit-chat as well….now there’s something for the development teams to work on…

Last Saturday, as I watched my treasured football team (Watford) lose at home after an appalling 90 minutes in the cold, I turned to the bloke next to me with a resigned look on my face.  ‘Dire’, I said.  ‘Dreadful’, he agreed.  ‘Coming back next week?’ I rhetorically asked.  ‘Yup’, he said.  ‘See you Tuesday’.

This man and I have sat in the same seats at the same football ground for 26 years.  We have a type of loyalty that goes unquestioned, year after year, match after match, defeat after defeat.  Whatever happens on the pitch, however poor the entertainment and however much the prices go up, we remain committed.

Could this type of commitment be described as ‘Absolute Loyalty’?  Unchallenged, unquestioned, unrivaled.  No matter what happens, we’ll be there. 

We see Absolute Loyalty in sport, and also in religion.  I’m keen to know if it can be achieved in the retail and hospitality sectors.

Why is it that certain brands have achieved a customer base who would not consider any other options?  My father would not entertain anywhere but John Lewis when buying electrical equipment.  We all know people who believe Apple is the new religion.  Many customers will get their coffee from the same shop on the way to work without questioning other options.

So what is it that some brands have done to create Absolute Loyalty?  Despite the common trend of mass-discounting, nobody has ever gone to John Lewis believing that is offers the lowest prices on the high street.  Coffee shops certainly don’t pretend that a £2.50 skinny latte is a bargain.  And who would dare imagine Apple offering iPads as a two-for-one deal?

So if price is not a key factor of Absolute Loyalty, then what is?  Clearly, there’s a lot more going on in the heads of our customers.  I believe that the in-store experience has a far greater impact on creating Absolute Loyalty than most of us have given it credit for.  We shy away from it because a) we are not very good at creating memorable experiences and b) it requires time, commitment and some clever thinking.

We can easily implement large-scale discounts for some quick-wins.  However, understanding and improving the customer experience presents a far greater challenge.   In my eyes, and in the eyes of those aiming to achieve Absolute Loyalty, this is a challenge that cannot be ignored.