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Karla Martin
Marcelo Tau
Aurelie Viriot
Winning in Retail
With a Targeted
Store Service Model
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WINNING IN RETAIL Executive Summary consumer experience in the store
In a competitive retail without a clear strategy regarding
WITH A TARGETED
environment, with numerous which services to emphasize. This
STORE SERVICE players trying to reach the confusion is especially endemic
MODEL same pool of consumers, it’s among the retailers that find
important for retailers to be able themselves in a middle position
to differentiate themselves to keep in terms of service—between
attracting customers to stores. New the model of factory outlets and
products, competitive prices, and warehouse clubs, which have
convenient store locations have virtually no service, and the
traditionally been elements critical full-service model of some high-
to rousing shoppers’ interest and end retailers, which may offer
driving them to stores. These personal shopping, concierge
factors continue to be important, services, product setup, alterations,
but in-store service has become layaway, and gift wrapping. The
a vital dimension for retailers retailers in this no-man’s-land tend
that want to deliver a superior, to jump on trends they observe
differentiated experience that among competitors and offer
customers will remember the next the same services without a clear
time they shop. understanding of which ones
matter most to their customers.
In the pursuit of such memorable
service, many retailers have tried This confusion has often yielded a
to address all aspects of the mediocre overall service experience
as resources have become stretched
in too many directions. Clearing
up the confusion and getting
in-store service right is critical. In
this article, we review the services
that really matter to customers,
dissect the hidden costs of trying
to be all things to all people, and
offer a framework for choosing the
best service approach.
conducted by the National Retail 0% 5% 10% 15% 20% 25% 30% 35%
Federation (NRF) highlights the Percent of Respondents Ranking
importance of in-store service in Attribute as “Very Important”
Context Approach
• A consumer goods retailer decided to rethink its in-store • A cross-functional team was assembled to review existing
service model to better align it with what its customers wanted store processes and optimize the service operating model
• Its objective was to optimize store staffing levels and focus • The team developed preliminary hypotheses concerning both
store associates on the highest-impact service activities service activities and staffing levels that were based on:
• The company put together a task force to do some initial – Observations in selected stores
investigation into the current state of service across its stores – Additional interviews with store personnel
– Customer research insights
Major Challenges – Statistical analyses of store performance
• Interviews with store managers and associates combined with • The team then selected high-potential hypotheses that
financial analyses uncovered three major challenges: needed to be tested and structured in-store pilots—carefully
selecting the number and type of pilot stores, and timing the
– A major increase in the complexity of in-store activities had pilots to ensure statistically significant results
led to unnecessary labor costs and inefficiencies.
– The alignment of in-store service activities with customers’ Results
expectations and the brand’s strategy was unclear.
– Financial performance varied greatly across stores, • Pilot results confirmed significant store service model
suggesting significant opportunities for improvement. improvement opportunities involving:
– Is store service aligned with our strategic vision? • Opportunities to eliminate, streamline, or automate
– What type of service do the brand’s customers expect? administrative activities were identified and implemented—
– How should store labor be allocated to deliver against those allowing staff redeployment to value-added service activities
expectations while minimizing labor costs?
– What is driving the workload of our store personnel?
– Have we overcomplicated their roles?
Source: Booz & Company Store Labor Survey (2007), Booz & Company
the constraints related to testing a the number of testing units (e.g., the service model within their own
wide array of ideas in traditional the stores) is limited and that the fleet are worth exploring.
branches, the company has created number of variables is significant
Adapting the service model by
a prototype center at its headquar- in an environment where human
geography and type of locations
ters to help plan successful experi- interactions are key. But it offers
can show significant potential.
ments and has set up a number of superior value in identifying
Demand pattern, shopping
specific test branches. These testing optimal service activities and service
behavior, and local culture can
capabilities are leveraged through levels that consumer research alone
vary significantly from region to
a structured test-and-learn process cannot bring.
region and even from store to
(see Exhibit 4, page 8), accompa-
store; a more tailored model can
nied by the relevant organization Differentiating Service Levels
potentially deliver better results.
(including a dedicated innovation within the Fleet
Differences related to store size and
and development team) and infor- A universal service approach is not
location are also worth exploring.
mation systems. necessarily the most efficient way to
Small stores, given the lower
maximize the opportunities across a
Testing in stores is clearly more traffic, may benefit from a more
given fleet of stores. For some retail-
challenging than it is in an online service-oriented model designed
ers, opportunities to differentiate
or mail environment, given that to create a boutique environment
Hypothesis Prioritization
Conclusion
Store service is a key success factor
in the current retail environment,
but retailers have to carefully pick
and choose a select number of
Test Implementation
Test Design service activities in which to invest.
Trying to act on all aspects of in-
Source: Booz & Company store service is both costly and inef-
ficient, with distracting complexity
in store operations. Enhancing the
store service model does not mean
increasing the level of service in all
with a closer connection between associates and intentionally visit the dimensions of the customer experi-
customer and store associate; store when traffic is lower. ence. It means investing in a focused
meanwhile, large, high-traffic stores way in the service activities that
Another opportunity can be to most powerfully drive customer
might find a limited-service model
differentiate the service level pro- satisfaction and purchase decisions,
to be preferable. Street stores,
vided in the different sections of a and striving for excellence on these
which function as a destination
store—for example, shopping floor key levers. To achieve this goal, it is
for shoppers—usually returning
versus fitting rooms for apparel and critical to understand what actually
shoppers—can also benefit more
department stores. Shoppers in the determines the purchasing behav-
from a high-service model than mall
fitting room have already completed ior of consumers. In addition to
stores, where shoppers might be
the first major step in the purchas- targeted customer research focused
just passing by.
ing process by deciding to try on the on what customers want, retailers
In some instances, there are also product and might be more recep- must conduct in-store experiments
opportunities to differentiate the tive to product suggestions than to fully assess the benefits, costs,
service approach within a given customers browsing products on and risks of high-potential ideas for
store—e.g., by time of day or by the sales floor. There might be an store service improvement. If these
section of the store. For example, opportunity to deploy more store efforts are executed well and in
the characteristics of customers associates to the fitting room area alignment with other dimensions of
shopping during peak and nonpeak to drive additional sales. For exam- the retailer’s sales proposition, strat-
hours can be distinct. In some cases, ple, Best Buy increases sales staff in egy, and culture, they can have a
nonpeak shoppers might be looking areas such as TVs and home-theater major impact on store performance.
for more interaction with store systems, whereas in DVDs, games,
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