Impact of poor customer service in retail sales

*On the other side of the world, Meyer Stores are the largest department stores in the country, operating in over 65 locations across Australia selling all brands of clothing for women, men, and children as well as accessories, housewares, and electrical goods. According to The Australian, the company now plans to spend $100 million over the next four years to improve their customer service.

In a time when department stores all over the world have been losing substantial portions of their markets to specialty stores, new business models have become an overwhelming priority. Chief executive Bernie Brookes announced he has authorized the refurbishing of eight of the stores to include  profound improvements in the visual presentation, a new merchandising system, and the improvement of the level of customer service which will dramatically improve team members’ abilities to serve customers. The $100 million will be used to increase in-store staff by 10% annually over the next four years. Brookes also plans to equip 65 stores with 4,000 touch screen registers.

In the last few years, Meyer Department Stores have taken heavy criticism about their lack of customer service. In one example, a reporter told of shopping at the store in order to buy a new iPod. He couldn’t find any sales staff to help, and there was not one specialist available in the electronics department which consisted of televisions, computers, etc. When the shopper finally did find an iPod he wanted to purchase, there were no more in stock, and he was told the next order was not expected for another four weeks. Many similar criticisms of Meyer Department Stores were found on Google which also included a poor range of products, tired looking stores, next to zero customer service, and a demoralized staff. Also, customers complained most items were more expensive than other competing stores.

What Brookes is doing isn’t new, but he seems to be taking a more methodical approach and expects a five to ten percent growth for  2011 notwithstanding of course interest rates, unemployment, and the value of the Aussie dollar. Still his ideas bode well for a tarnished customer service reputation when he prescribes to the basic rules of providing good service and delivering the merchandise customers want. He also is putting an end to continuous discounting which he claims has conditioned consumers to become perpetual bargain hunters. While he agrees that analysts thought such discounting would stimulate the economy and buying habits, he feels that “specials” will be more effective and bring in more buyers.

For delivering quality merchandise, Brookes has been “maximizing returns with space optimization.” Simply stated if something is not selling, it’s out, and the floor space is given to something better. It’s more or less a judgment call, and higher profit margin products have been making their presentations. Brookes tells us that is what customers want. Adding one million extra staff hours to boost customer service experiences especially in women’s lingerie and shoe departments will cost $20 million.

On another level, Brookes has waged war on one of the most significant problems he has had in the store; that of shoplifting. He has now instituted  face recognition technology, closed circuit cameras, and a full staff of security guards.

Will it work? It will be interesting to observe, especially after the last comparison of Myer customer service was compared to  a Kmart level of customer service. Let’s see how companies rebuild tarnished reputations.

photo credit: Xhanatos

One Response to “Impact of poor customer service in retail sales”

  1. Kathy Clark said:

    Sep 18, 10 at 6:50 pm

    I agree, live chats can be a great tool and resource for businesses. The unspoken is someone manning the live chat. I recently had an experience with a live chat that was not very good and disappointing at best. It’s amazing what you learn about doing things right when you experience a business doing it wrong!