Improving customer service is just the start for retailers

Last week Myer’s CEO Bernie Brookes was in the media defending his company’s decision to invest $17 million is extra staff despite tough times for retailing. He argued that the investment would pay off and pointed to a slight increase in sales in the past few months.

His instinct to invest in improved service in the right one. Indeed, according to our research, it is long overdue.

Last year, we were finding that consumer criticism of the two big department store chains – Myer and David Jones – was escalating, rivalling complaints about the two big supermarkets.

We heard story after story from consumers recounting a trip to Myer or DJs that was frustrating or disappointing and inevitably led a trip to a specialist store or, more frequently, to an online retailer.

The common complaint was that service was poor or, worse still, couldn’t be found.

Sure price, choice and ambiance were aspects of the department store experience consumers found lacking (“Why go into Myer and buy a $300 bottle of perfume when you can go into Chemist Warehouse and, I’m sorry, you pay $40?” said one 40 something woman in a discussion group).

But most of the criticism focused on the issue of customer service.

“I hardly ever go to department stores because of the service. I always go to boutique shops,” said one 30-something woman.

“I hardly go to department stores because there’s no service,” said another 40 something man.

These were common sentiments expressed in our January report, How We Shop.

Another frequent comment was that if service standards improved, people would return to department stores to buy more. “Would it make you go back to a shop if they gave good service? ‘Yes’ was the main response.”

And while this statement shouldn’t be taken entirely at face value, there were plenty of examples consumers’ gave of moments in which good service encouraged spending.

I was up at Myer the other night and this poor girl was great with customer service. She rang all the other stores for me, trying to track this dress down. She rang the Claremont store and then tried another, and another. I said, “Thank you so much for doing this” and she said “It’s all right, it’s a quiet night and I don’t mind doing it.” That was great.

Of course, even if service and sales improve, Myer (and DJs) both have a harder task than improving service before them; re-inventing the department store at a time when online retail is exploding.

Do consumers even want Myer and DJs to sell everything from shoes to blenders to books? Is it time for our two big department stores to stick to what they can do best – fashion, food, homewares and improve services around these product categories?

Something else for Mr Brookes to ponder as he scrutinises his monthly sales reports.

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