Monday, January 23, 2012

Are the Brick & Mortar stores fighting a losing battle with the online retailers?

It was a usual Saturday afternoon and we wanted to get some books for our kid. We headed out to Barnes and Noble at the Tustin Marketplace in Irvine. Our first challenge was to find the children's books aisle. It took us a while but we were there. It was a nice stroll along the aisles and a multitude of things to look at. Eventually, we were a bit confused on what to buy. I looked around and there was no associate in sight to help us. Neither was anyone in the 'help desk' area or anything resembling that. We finally found one person selling Nook at a kiosk but he was too busy to attend to us.

My mom then wanted to check out the latest books on Astrology, a subject she loves to read about. Again, we were trying to find a needle in a hay stack. And there was no one nearby. I walked several aisles and still there was no one to assist. By the time we started looking for the books we wanted, my son started getting cranky and we left. All in all, horrible customer service - Barnes and Noble. You gotta fix that. NOW.

After having wasted our time and energy and not been able to find anything in the latter category (the books my mom wanted), we headed back home. After reaching home, I checked out Amazon's online catalog and ordered the books we wanted, in about 10 minutes, we were DONE.

I then wondered why Brick and Mortar stores like Barnes and Noble are losing their battle against online retailers like Amazon. The answer was simple - the B&M stores are still not focused on having good employees and providing the best customer service. In these days where they are being battered for survival, I would expect the customer service to be top notch. Contrary to that, the customer service was very much below par.

I had a similar experience at Kohls during the winter holidays where they were under-staffed and no one was available for the 5 people including me, at the Appliances section. "I'm managing two departments, so please bear with me, she said".

And moving on to a B&M store which actually had great customer service...well till last week at least. I was shopping at Costco and checking out and realized that I had forgotten to get my coupon book. It has happened a couple of times before and the solution was easy. The employees at the cash register are given a bar code to scan all the coupons matching what a customer purchased. Looks like Costco stopped doing that now but the employee's response was something like they had never been doing this. Lies. They are just making it difficult for customers to use the coupons. Costco - whichever managerial guru gave you that piece of advice is wrong. The more the customers use coupons, they more business you are going to do. There is also a weird problem of only some Costcos accepting manufacturers coupons and some rejecting it for the reason that "manufacturers don't pay them" - which they need to iron out.

So what do B&M stores need to do to avoid being a Linen n Things or a Circuit City?

1. Hire talented employees and teach them. There is just no compromise for customer service. Hire the best and fire the rest.
2. Read point 1 again. How many times have I had a transaction go wrong with amazon? Zero. Zilch. Newegg - none. You gotta create that kind of experience for your customers. Exceeding customer expectations is the key and I hope B&M stores finally realize it.
3. Excel in one thing you can specialize in, rather than targeting everything.
4. Customer Service: If you have a store policy, stick to it. Make exceptions but only for the customer's satisfaction. If an employee is doing something which the customer does not like (e.g. rejecting coupons), do it in a nice and polite manner. Make the customer feel good.
5. Add incentives to cover sales tax cost: Some people complain about B&M stores having higher prices due to sales tax. But this is what I would do if I was running a B&M store - I cannot avoid collecting and paying sales tax, so I would add in some incentives. Like throwing in a basic flat screen TV installation when my customer buys a TV from my store...or an appliance installation that would have cost my $250 otherwise. There are ways to make a customer's shopping experience an enjoyable one. You just need some thoughts.

That's it. If I cannot get knowledgeable staff and customer service, I'd rather spend time watching a movie at home and order my stuff from amazon. I do not believe in the so called "retail therapy" where you go shopping just to get the retail experience. Amazon still cannot beat Costco for pricing (especially groceries) but that day is not far. And polite, reassuring customer service is not an option now.

What else do you think should B&M stores do to be competitive? Let us know!

As for Amazon, newegg, overstock - you have set a new benchmark for everyone by providing exceptional customer service while keeping product prices competitive. So please keep the good work going.

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