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New Thinking on the Old Topic of Retail Customer Service

New Thinking on the Old Topic of Retail Customer Service

By David Orgel

Customer service shouldn’t be a complicated matter. The more you invest in it, the more you’ll attract shoppers. End of story.

But today supermarkets are looking at customer relationships through a new lens and asking more questions. This week’s edition of SN examines new approaches to building consumer connections. Stories on this topic appear throughout the magazine, designated by the “Consumer Touch Points” logo. The upshot is that retailers are embracing new insights, which include the following:

Service carries a halo: Installing even a little service can have a halo effect on an entire retail department, even an entire store. For example, many retailers find that having an in-store pharmacist boosts sales beyond the prescription drug area. That makes sense at a time when consumers have lots of questions about diets and health.

No service is service too: It’s not usually popular when a store switches a department from service to self-service, but letting shoppers fend for themselves isn’t always a bad thing. Supermarkets are increasingly debating how much service they need. If a store’s shoppers prefer case-ready meats, for example, then retailers don’t need a big service investment in that department. But retailers that go completely self-service, while saving money, lose out on opportunities to interact with consumers. Finding the optimal balance is more crucial and trickier than ever.

Eliminating loyalty cards can boost loyalty: Once, loyalty cards were seen as a retail differentiator. That’s no longer true. Albertsons LLC recently canceled loyalty cards in its Rocky Mountain-area stores in order to set itself apart from the local competition, all of which carried such cards. Reports indicated that consumers were pleased they no longer needed loyalty cards to obtain discounts. Other savvy retailers are still using loyalty cards but doing more than just offering discounts. They are embracing a wide variety of programs to engage shoppers.

A consumer is defined by his cluster: That’s increasingly true for stores buying into clustering and segmentation strategies. Thinking about consumers as segments might seem impersonal, but the practice is enabling unprecedented customization for individuals and groups. This week’s Retail section profiles a number of operators making big investments in segmentation, including Wal-Mart, A&P and Spartan Stores.