Customer Service in Retailing

 | March 25,2014 02:21 pm IST

Customer service remains an enigma to many retailers, who pursue various routes in their quest to keep customers coming back through their doors. Few retailers can claim to have reliable measures of customer satisfaction, and fewer still can claim to have an entirely satisfied and loyal customer base.

Until recently merchants were plying their wares to consumers who had few options, it didn't matter how the products were displayed; it didn't matter how the store looked; Customer service was not yet born. Just having goods available guaranteed business.

But, today the potential customer is a savvy shopper with a keen eye for price, service and convenience. They expect a lot & if the store fails to meet their expectations, they won't hesitate to shut their wallet and take their business elsewhere.

Service at the point of purchase has been often written about and discussed in great detail. A contemporary dimension associated with retail service is the nature of the service, which is expected by consumers in a specific retail setting, and the nature of the product category itself. Service in retail context is the overall attention given to the consumers, which would enhance the retail experience. This retail experience could also extend to certain services beyond the point of purchase in the case of durables.

Any retailer whether small or large is concerned with the store's image and service, as it is a vital aspect which, directly affects the image of the retailer. The direct result of service provided at the retail outlet could be observed in the word of mouth publicity which consumers carry among their friends and peer groups. Positive word of mouth is the best advocate for the store while negative word of mouth will spell disaster. The importance of word of mouth is reflected in the fact that large brands in developed markets conduct research studies to quantify the impact of word of mouth in terms of sale's gained or lost. Service also helps the store to become known for a specific proposition. This is important as it functions as a differentiator, one could appreciate a service which ensures faster billing with distinctive counters for less than five items bought in a large store.

Leading brands such as Videocon, BPL, LG or Samsung deal with a number of product categories (audio, TV, refrigerator, microwave and so on) and word of mouth (discussed earlier) has an even greater impact with regard to durables. A consumer of a black and white TV may be a prospective consumer of a refrigerator or an audio system. Millions of households may use at least one product of a brand such as BPL or Videocon and service at the retail outlet could be a potent tool for creating a base of loyal consumers. While pointing out to service with regard to these durables, there are two aspects to be considered - service provided by multibrand outlets which may be small or large and the service provided by the exclusive outlet. This approach is important as a leading brand is likely to be present in about 3,000 to 4,000 outlets in the country and all of them can't be exclusive outlets. Such a differentiation would also help the brand improve its infrastructure and locational considerations apart from enhancing customer satisfaction.

Service varies with the type of product and the type of retail outlet. The basic aspect of providing service is concerned with the identification of consumers who need service after entering a large retail outlet. Sales personnel should be trained to provide appropriate and not unwanted service. Service, unfortunately, is mixed up with over-enthusiasm, which is reflected in artificial hospitality at the retail outlet, which certain consumers may not like. The attention given to a consumer should always be perceived as warm, spontaneous and appropriate. It should never be associated with unnecessary intrusion of privacy. Moreover consumers should never be let down on this proposition. Complaints about lack of quality, improper packaging and cheating with weights should be immediately attended to. The consumer should never get a feeling that the store is doing them a favour by replacing the product. It should be borne in mind that product-service interface at the point of purchase enhances the relationship between retailers and consumers just as structured in-store and off-store service enhances the customer-retailer interface.

As retail paradigms in India undergo a change, as already evidenced by the emergence of stores like Littlewoods and Shoppers' Stop, retailers need to define their concept of service. The success of supermarkets (success from the viewpoint of creating the habit among consumers to enter supermarkets) was felt after the entry of Food World. The perception that supermarkets are shopping places for the middle class is of recent origin and this was based on the variety and quality associated with the assortment of goods, which are of interest to the middle class.

Looking from another perspective, as the boundaries between "brick and mortar" and "pure play" disappear, many brick and mortar companies are heading towards retailing, Reliance for instance, believes that instead of dealing with industrial intermediaries like plastics and chemicals, its future growth depends on delivering goods and services directly to consumers. Be it petrol and diesel through its planned network of pumps, or mobile and basic phone services as well as data and video through its fibre-optic network, Reliance knows that the game is now aimed at delighting retail customer.

Conclusively, it can be said that the service paradigms shall change is beyond doubt, and the leaders shall differentiate themselves increasingly not just on the merchandise but on that ever expanding dimension of superior customer service.


Contributed by -
Navneet Agarwal,
School of International Business Management,
Indian Institute of Foreign Trade (IIFT).