Retail leaders must objectively understand how their business currently considers customers before trying to set a more customer-centric direction and focus. Here, I present an approach they can utilize to gauge how their stores are progressing in their customer-first journey.
I recommend that leaders use the approach outlined below as a kind of “toe in the water” to help them form early hypotheses and points of view. These are rules of thumb, heuristics culled from global experience. Later, leaders might use these observations to informally check progress from time to time as a way of assessing whether the “program in the stores matches the program in our heads.”
1. Who really runs the store?
Walking around a store can give many clues toward understanding a retailer’s attitude about its customers, as well as revealing some of the challenges ahead for installing customer first. Leaders can form an opinion about the customers’ true shopping experience by observing who really runs the store.
- Choose three sections across the store (such as yogurt, pasta sauces, milk and packaged lunch meats). Look to see how the product is organized and presented.
- Is the section organized by brand (all Dannon yogurt is merchandised together in a recognizable Dannon brand block)?
- Is it organized by customer benefit or usage (all brands of probiotic yogurt are merchandised together, as are all Greek-style yogurts, all kids yogurts) or by some hybrid but logical planogram, rather than random plan with little recognizable logic at all?
- Would you conclude that the product display and layout logic is influenced more by supply chain, by brands, or by the customer need states or trip missions?
- How broad is the range? How deep? Does the breadth and depth feel customer-friendly, or confusing?
2. What messages are customers receiving?
Store signage not only delivers a written message, but also a type of “body language” that customers tune in to, albeit not always consciously. Look around the store to see both the written and hidden messages, and hear the tone being communicated. Do messages speak respectfully to customers? For example:
- Signage at the entrance rudely telling customers what the rules are, even though 99% of customers would never think of shopping without shirts or shoes, or while wearing roller blades.
- Narrow limits on the quantities of promoted products or services.
- Rules and restrictions, terms and conditions.
- Aggressive security barriers and gates at entrances—these tell honest customers that they, the shoppers, are not to be trusted.
- Phony expiration dates for promoted prices—customers learn that the deal will be repeated soon, if not immediately.
- Stupid pricing signs.
3. What messages are employees receiving?
While walking the store, stockroom and the employee break room, note and messaging aimed at staff. What seems to be valued more—numbers or people? What policies and rules guide employee behavior? How are they expected to interact with customers? Are the messages respectful of staff and of customers? What do signs say about the culture around customers?
4. Who has the power to satisfy customers?
On your store walk, observe who has the power to satisfy customers making a return or wanting a refund: Is the front-line employee empowered to satisfy the customer, or must the manager be called? Is there one service desk where customers must queue to get their money back, or can the helpful cashier make good on the spot?
Examine the return policy to assess its sensibility and ease from a customer viewpoint. The return and refund policies and practices are strong indicators of a company’s readiness for or progress along the customer-centric journey. Customer-first organizations give front-line employees broader authority to resolve customer needs, and extend the power to satisfy customers to most members of staff, in some form. For best practices, see the policies from Nordstrom in the U.S. and Ritz-Carlton globally.
5. Do the words of your leaders matter?
Senior leaders set the tone for how customers are regarded and treated in the business both by their words and their actions. And the “C.E.O.S.”—Customers, Employees, Owners, and Suppliers—all take notice. It’s widely documented that leaders who walk the walk are more effective than those who only talk the talk.
Implications for Retail Leaders
The store shapes customers’ perception of the brand. There are hundreds of opportunities for the retailer to win or lose loyalty in each shopping trip. Customers take clues, consciously and subconsciously, throughout their entire shopping experience, and draw conclusions about retailer warmth and attitude toward shoppers. And it only takes one disappointing experience to erase all the good.
Retail leaders must take an objective assessment of the shopping experience using a customer lens to understand their current state and readiness for customer centricity. Pay close attention to the body language and tone of your policies. Store signage, employee empowerment and communications, and practices around assortment and presentation are clear indicators of the organization’s attitude about the customer.
David Ciancio is global customer strategist for Dunnhumby, a pioneer in customer data science, serving the world’s most customer-centric brands in a number of industries, including retail. David has 48 years of experience in retail, 25 of which were in store management. He can be reached at David.Ciancio@dunnhumby.com.