In Retail as in Politics, Everybody Loves a Winner

It’s an old saying usually applied to politics. The thinking is that it’s easier to take sides when it looks like the winner has already been determined.

It seems the inverse holds true for where we shop – no one wants to shop at a loser. And there have been a lot of losers over the past year including Sharper Image, Bombay Company, Linens ‘N Things, Steve & Barry’s, and more. As reported by Reuters Friday, tuned-in shoppers are evaluating stores’ financial health based on staffing levels.

Funny that on the heels of this Reuters story comes a two-part special report from the National Retail Federation. The articles in Part 1 are all about self-service, at checkout, at the perfume counter, and more.

In our consumer research, we have seen a consistent desire for more and better service – in the store, on the phone, throughout the day. While self-service is a form of service, I don’t think it is consumers’ first choice. My hunch is that the rise of self-service has something to do with the disappearance of the professional salesperson – like the fabulous women who used to work at Bullock’s Wilshire or I.Magnin and knew how to wait on teenage girls shopping for just the right thing to wear to a special event.

To cut costs, those professional sales people had to go (from all but the most expensive and exclusive stores), and even that wasn't enough to save Bullock's or I.Magnin or Good Guys. With most stores staffed by minimum wage employees, real service became harder to find. Stores replaced some of those low-wage, low-service employees with technology. So, we have seen the store shopping experience go high tech, and in many cases less human.

We accept technology happily online, but it’s unclear how willing we are to Do-It-Ourselves when we’ve made the effort to go to a store in-person. Certainly, I’d rather do-it-myself from the outset than wait around for an incompetent sales associate to do it wrong and simply delay my having to do it myself. But this strategy relies more heavily on the product itself and the ease of my finding exactly what I want – no personal relationship to paper over in-store shopping frustrations or to make add-on sales.

In a July posting I asked “where have all the store employees gone?” Based on Britt Beemer’s research reported in Reuters, the smart money might be reading cuts in the number of sales associates as a leading indicator of a retailer’s decline.

What do you think? Do staffing levels help predict retail winners (and losers)? Does in-store technology aimed at customer service make your experience better? Who’s doing it right? All great topics for future postings.

Where have all the store employees gone?

While a big part of the Internet’s appeal is that customers can use it anytime anyplace, that doesn’t mean all retail should be self-service. In pursuit of lower costs or eliminating customer lines or wait times, some retailers have hollowed out their stores to the point where there are virtually no employees.

Home Depot has customers doing their own check out. Macy’s installed scanners so customers can do their own price checks on the sales floor. At Target, the digital camera desk is frequently unmanned, and there's no staff in the electronics aisles. Each decision has its own logic, and makes sense in isolation. However...

... As a Best Buy district manager told USA Today, "A lot of this [consumer electronics] stuff is commoditized. So what is the difference? It's our people. It's got to be…As the economy tightens, everyone is going to be lowering price to the lowest possible point, so service becomes the most important differentiator between retailers. It's the reason why a consumer would choose to shop at one over another."

Whether or not you like Best Buy, you gotta give them credit for understanding that shopping in a store is a social experience, and an opportunity for a retailer to strengthen its relationship with its customers.