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Will Someone Win The Price Vs. Service Battle, Or Is There Room For Both?

Art Patch
Art Patch

Last updated on October 10th, 2017 at 09:52 am

by Art Patch/a retired retail executive & regular columnist for The Shelby Report

For years, the successful retail business model featured a strong commitment to customer service. Customer service does cover a broad area but was often listed in surveys as the primary reason a customer chose a store. It was not uncommon for employees of grocery, drug, hardware and other traditional stores to be committed to helping their customers have a positive shopping experience. Stores offered help finding items and often helped get the customers to their car.

Now it seems that offshore brands like Lidl and Aldi as well as our own homegrown Walmart are focused on hard-discount pricing, while the entire retail universe has an eye on what is now referred to as “Amazonification”—a package delivered to your front door. Based on the following examples of Costco’s price and Home Depot’s service, it appears there currently is room for retailers promoting price and service.

There is no doubt that Costco has developed a powerful low-price image, even though most items are sold in unusual sizes and quantities. An early observation is that with the exception of the meat department, there are very few employees on the sales floor. The impression one gets is that the majority of employees replenish and clean the store while it is closed. Once the store is open for business, it is difficult for a shopper to find an employee. If they have a question about a location of an item on their list, they are out of luck. Often the only option is to make another trip around a 100,000-s.f. store. It also is not unusual for one shopper to help another lift heavy items into their cart.

The experience continues at the checkstand, where it is not uncommon to join a line six to eight shoppers deep. Furthermore, it is not uncommon for several lanes to be out of service. Yet it is rare for customers to complain; after all, they feel they have a cart full of bargains!

On a recent trip to Home Depot, Mrs. Angle and I were pleased by the way we were greeted by an employee as we entered the store. The greeter was eager to help us find what we were looking for. Because we were looking for a special light bulb, we were put in touch with the lighting person. We quickly learned enough to make a selection and found our way to the self-checkout. We experienced a minor glitch, but were helped immediately by a clerk.

With the help of three employees, we were out the door in 20 minutes.

Acknowledging that comparisons made between retailers in different classes of trade can be questioned, Costco and Home Depot are at the top of their class, each with a successful model.

Chase those sales, they won’t chase you!

After a 40-year career that included executive-level positions with Safeway, Lucky Stores, Appletree Markets and Save Mart/Food Maxx, Art Patch retired from the retail grocery business in 2007. He is a graduate of San Jose State College and the Cornell Food Executive Program. Patch is on the ExecuForce Team of Encore Associates and is a ­counselor for SCORE, helping new and emerging ­businesses develop business and ­marketing plans. He ­welcomes your feedback. Email him at [email protected].

About the author

Alissa Marchat

Alissa was Staff Writer at The Shelby Report.

1 Comment

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  • Superior customer service is one of the few opportunities that one competitor can gain an advantage over another. The type of customer service that give one a competitive advantage over another is not gained overnight and can not be copied overnight, thus a competitive advantage.

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