Sir Charlie Mayfield, chairman of the British Retail Consortium, warned last week that the retail sector is facing the loss of up to 900,000 jobs and thousands of shop closures in the coming decade. This in part due to the new apprenticeship levy and the rise in the National Living Wage. Over in Europe things aren’t much different, with Swiss retailers in particular feeling the pinch due to the strong franc and the ease of buying the same product in the Eurozone at much lower prices. 

So is it all doom an gloom for the retail sector? Well, we think that depends on how it responds. If things continue the way they are, Sir Charlie may well be right. But if retailers respond by making a strong move to improve customer experience, they could well rise above these challenges. Note, not just a small improvement: a significant one. 

To illustrate the point, here are a few of my recent retail experiences:

Our washing machine finally bit the dust, so I walked into the local electrical goods store as a very hot prospect. The 3 team members at the store were more interested in talking among themselves than serve the one customer in their section. I finally managed to tear one of them away from their conversation only to be warned that the machines I was looking at typically took 3 hours to complete a cycle, so my wife might not be happy. I then had to ask for options with a short cycle. After a lot of searching the team member recommended a couple and then walked back to the conversation I’d interrupted. Result: no sale.

In a ‘remote’ retail experience, I needed to buy my son some specialist sports clothes. There’s only one retailer that stocks what he needs, and we live 3 hours’ drive away, so I decided to order via their website, like so many people do these days. The trouble was their website consistently wouldn’t load, timed out, and then finally when it started working (a few days later) the product didn’t show up when I searched for it. I couldn’t find it anywhere on their site. And then the site went down again. When it did work, it didn’t adapt to mobile or tablet screens, and with the growing number of people accessing sites via mobile devices, this is not good enough. Overall not a great experience.

So I called them to place the order. The lady who took my call was very pleasant and sent the goods out the same day. Great I thought. Except when the clothes arrived the sizing was way too big (despite them being the same size as all the other clothes that fit him perfectly). 

A quick check on sizing at the manufacturer’s website showed the cause of the problem. The manufacturer equates size 12 to 151cm tall, but in their wisdom, the retailer converts it to 140. Go figure. This is a value subtraction, not value add.

Now the retailer has been very good in dealing with the return, but what a hassle. If this is the sort of experience customers have, is it any wonder there’s a strong tendency to do your own research and then simply buy online.  I could most likely have sourced the product from far away overseas more quickly and precisely than via a local specialist, and sadly this seems to be all too common.

In another situation I had to take some equipment into a shop to be adjusted. The guy complained that the screws had been tightened too much. When I pointed out that it was him that had tightened them in the first place, he swore blind that it couldn’t have been him. Oh please! I shan’t be going back there again.

 “Retail – and other service sectors – must recognise that the future winners will be those businesses that differentiate on Customer Experience, not on product or price.” Stephen Spencer

All this is not to say that there aren’t some great customer experiences out there. Rather that it’s not consistent enough, and the general trend drives customer expectation. With the digital age, consumers are more free and able than ever before to choose where, how and from whom they buy, so as Customer Experience expert Stephen Spencer says, “Retail – and other service sectors – must recognise that the future winners will be those businesses that differentiate on Customer Experience, not on product or price. ”

So what does this require of retailers - and indeed the service sector in general? 

Not, we suggest, the current general trend, which seems to be to cut costs, squeeze margin from suppliers and link up with other complementary retail providers (for example Sainsbury’s + Argos). We’d argue that retail productivity (increased sales, long term) is led by improved customer experience, which is best created by businesses whose business model is centred on customer experience (not just a bolt on) combined with engaged employees with the skills needed to do the job. 

Thankfully there are some companies that are bucking the trend: 

• ‍Sharp (the furniture retailers) have a new customer experience-led store design which is generating 30% increase in sales.
• Samsung has a new flagship ‘digital playground’ in Manhattan where consumers can try out Samsung products and experience the brand. People who already have Samsung Galaxy phones can use them as tickets for entry to special live events there (nice to see existing customers getting a bonus, rather than the all too typical “offer only available to new customers only”).
• Rather like Value Stream Managers in Six Sigma-focussed organisations, businesses that are forging ahead with creating great customer experiences have a ‘Chief Customer Champion’ whose job is to maintain an unrelenting focus on the customer throughout the organisation.

The key here is that the shift towards creating great Customer Experiences is a strategic one. If you’re not already thinking about this now in your organisation you’ll soon be playing catch up, so do get in touch if you’d like to know more about how to prepare to meet future customer expectations.