Dismal profits during the recent holiday shopping season and a continuing recession will be forcing many retailers, both large and small, to shut their doors in various locations, in some cases going out of business completely.
There is no question that an economy on the decline for several years along with rising unemployment rates plays a large part in the downfall of what were once department store giants. Consumers this past year have been especially cost-conscious, and will undoubtedly continue to look for sales, bargains, and discounted prices long into the New Year.
The heavy promotion of sales will likely play a large part in persuading consumers to continue shopping this year, but managers and store operators need to stop focusing on the economy as being solely at fault for low profits. There is another important factor to consider; it’s called customer service, and it seems to have been in a steep decline over the last few years, and severely lacking or virtually nonexistent in some stores.
Perhaps customer service has taken a long holiday, or maybe it has simply been devalued as an effective means of holding onto and increasing an established customer base. Regardless, it has been cast aside by retailers like last years inventory, and blaming the bad economy is the latest fashion.
But consumers desperately want to see customer service in the spotlight again. Consider my own holiday shopping experience during December, and shortly thereafter, when I was shopping for myself with the gift cards I acquired from family and friends.
I visited several large retailers, and though the stores were extremely busy and the lines were long, the prices were simply unbeatable, and there seemed to be a jovial spirit in the air. Sure, there were disgruntled shoppers aplenty, as is expected, but the employees were pleasant and courteous, a rare and welcome gift that made holiday shopping tolerable.
Reflecting upon that, it seemed as if most retailers, in an effort to secure decent profits this past holiday season, were practically bending over backwards to appease customers and increase sales. And then I had the pleasure of shopping in one major department store staffed by relatives of the Grinch.
I went to this particular department store on three separate occasions, in three different locations, and not a single trip resulted in a favorable shopping experience. The employees exhibited a lack of professional courtesy and showed no willingness to assist myself or other shoppers.
I also attempted to call various locations of the department store several times in order to check whether a particular item was in stock before making an unnecessary trip. I found myself waiting in that circle of hell called ‘hold’ for an unforgivable amount of time, disconnected, and transferred to other departments that could not help. My next set of calls were to customer service agents and managers, which also resulted in disconnections, more transfers, and the obligatory “I’ll have a manager call you back,” which of course never happened.
Were it not for the fact that my wife and I possessed gift cards to this store, we would not be shopping there, and we can say with absolute certainty that we won’t be in the future. My shopping experience may have been an isolated incident, but that seems unlikely.
Retailers need to consider that shoppers who shared similar experiences during the holiday season possibly not only accounted for lost sale opportunities, but will also account for continued decreased profits in the future, since it is probable that they will favor another retailer that provides better customer service.
The particular department store I choose to no longer shop at recently announced that they will be closing 11 underperforming locations. Is it the economy? Perhaps. Could poor customer service also be a contributing factor to an overall decline in sales in these locations? Definitely.
Consider the comparison between two pizza places in New York City. One establishment sells pizza at $2 a slice. The pizza is good; nothing to complain about, and nothing to rave about. But employees behind the counter seem more concerned with carrying on conversations with each other than assisting customers. There is never a smile to greet you; rather, employees wear disdainful expressions that display a clear message. They’d rather be anywhere than here, helping you.
The other pizza place sells pizza at $4 a slice. In this economy, $4 for a slice of pizza seems excessive, even for pizza that customers tend to swoon over. At this establishment, employees are friendly, courteous, and eager to make your pizza experience, even if its only five minutes long, an enjoyable one. In fact, some customers travel more than halfway across the city just to purchase a slice of pizza there, not just because the pizza is good, but because the service is very good.
Clearly, in that particular comparison, customer service is the definitive factor, not the bad economy. Retailers large and small could learn a lesson here. The question is, do they care?