Strategic advantage in retail

Excerpts from Retailing Management, Chapter 19: Customer Service
Michael Levy & Barton A Weitz

• Good service keeps customers returning to a retailer, and generates positive word-of-mouth communication, which attracts new customers.
• Providing high-quality service is difficult for retailers. Automated manufacturing makes the quality of most merchandise consistent from item to item. But the quality of retail service can vary dramatically from store to store, and from salesperson to salesperson within a store.
• It’s hard for retailers to control the performance of employees who provide the service. A sales associate may provide good service to one customer and poor service to the next customer.
• 73% of consumers attribute their best customer service experience to store employees. Conversely, 81% of consumers attribute their worst customer service experience to employees.
• Most services provided by retailers are intangible - customers can’t see or touch them. Clothing can be held and examined, but the assistance provided by a sales associate or an electronic agent can’t. Intangibility makes it hard to provide and maintain high-quality service because retailers can’t count, measure, or check service before it’s delivered to customers.
• The challenges of providing consistent high-quality service provides an opportunity for a retailer to develop a sustainable competitive advantage.