This lecture was prepared for a 3rd year course in Retail Marketing.

1. CUSTOMER SERVICE.
Chapter 11.

2. EFFECTIVE DIFFERENTIATION.
• Increasingly difficult with merchandise
(inventory turnover, merchandise, private brands)
• Nearly impossible with prices.
• What remains is…
excellent customer service.

3. CUSTOMER SERVICE.
• Cannot be as easily copied or
matched.
• Creates positive word of mouth
• Creates referrals.
• Keeping existing customer is cheaper
than sourcing new ones.

4. LOSING SUCKS.
And so is losing customers.

5. LOSING CUSTOMERS.
• Negative word of mouth.
• Losing out on customer life time
value.

6. SOCIAL MEDIA.

7. HOW NOT TO LOSE YOUR
CUSTOMER?

8. ADAPT TO THEIR
CHANGING NEEDS.

10. CUSTOMERS
ARE CHANGING.

11. CHANGING CUSTOMER NEEDS.
• Understand who your customers are.
• Know what they want.

12. CHANGING CUSTOMER NEEDS.
• Understand who your customers are.
• Know what they want.

13. CHANGING CUSTOMER NEEDS.
Get to know your customer:
• Scanner data
• Loyalty programs
• Insights from Facebook

14. CHANGING CUSTOMER NEEDS.
Get to know your customer:
• Scanner data
• Loyalty programs
• Insights from Facebook
“We always value your feedback, ladies.
Do you have any suggestions for how we
can improve HomeChoice?”

15. CASE IN POINT:
SHOPPING MALLS

16. “Malls have to adopt to
what people want”
Hyprop CEO, Pieter Prinsloo.

17. PROFIT / SQUARE METER.
Shuffling of stores - some will close &
replaced by stores that better suit the
market.

18. PROFIT / SQUARE METER.
Shuffling of stores - some will close &
replaced by stores that better suit the
market.
• CNAs are getting smaller.
• Music stores: People rather download
music than buy cd’s.
• Cinemas: Occupy a lot of space. Pay
less rent.

19. INNOVATION IS NEEDED.
Cinemas, music stores, book shops:
• Be a while before they disappear.
• Have to find new ways of enticing
consumers.
• Try new things to become more
profitable.
• Can you think of any?

20. • Redefine CEO Marc Wainer says South
African shoppers are: “clothes crazy”
• Even lower LSMs love to shop designer
brands.
• Increasing number of South Africans
are seeking branded goods which are
popular in EU and US.
SOUTH AFRICANS LOVE CLOTHES.

21. Trend opens door for more
clothing brands to enter SA.

22. EUROPEAN RETAILERS.
• South Africa is a foothold for growth in
Africa.
• They have marketed themselves
through TV & movies: head start before
they even get here. Already pop culture.
• Hyprop: long list of international
retailers awaiting space in malls.

23. FACILITIES & VACINITY.
Sandton City.
• Developments in precinct.
• Gautrain Station and OR Tambo.
• Vein pumping tourists with fat purses
straight into Sandton.
• Particularly popular with African tourists
– Angola, Nigeria, Ghana.

24. Ever increasing need for WiFi.
Strategy to pull consumers.

25. Online shopping is competing
with land based shopping.

26. ONLINE vs OFFLINE SHOPPING.
• Visible trend that consumers much
rather shop for clothes in store – feel
try on and experience it.
• More likely to shop/buy gadgets online.
• High tech brands still have a place in
malls – repairs and advice. But they
need less space.

27. ONLINE vs OFFLINE SHOPPING.
• Hyprop is rolling out wifi across all malls
• Experience product in store, then go sit
at coffee shop (in mall), visit website via
wifi.
• Apps to find good deals in mall, then go
that that store.

28. SHOWROOMING.
• Examining merchandise in a traditional
brick & mortar retail store without
purchasing it.
• Then shopping online to find a lower
price for the same item.
• Online stores often offer lower prices:
different & lower overhead costs.

29. SHOWROOMING.
• Online retail prices for consumer
electronics are up to 11% lower than in-
store prices.
• Half of all online shoppers check
products out in traditional stores first.

30. SHOWROOMING: DOWNSIDE.
• Costly to offline retailers:
–Loss of sale.
–Damage to store’s floor samples of a
product through constant examination
by customers.
• Particularly popular for electronic items
(iStore).
• Target discontinued Amazon Kindle.

31. SHOWROOMING: COMBAT IT.
• Certain items exclusive to brick&mortar.
• Avoid shipping costs by picking up online
purchase in store on the same day (Wal-
Mart).
• Fitting Fee refunded when customer
makes a purchase.
• Customer service experience!

32. SHOWROOMING: COMBAT IT.
• Online competition waits in the space
between aisle and checkout.
• Special coupons to mobile phones & ePOS
• Use of splash pages to get in front of show
roomer and promote special offers.
• Other location based promotions – GEO
targeting, NFC loyalty.

33. CUSTOMER SERVICE.
Chapter 11.

34. Customer service experience to
differentiate your store.

35. SERVICE APPROACH:
CUSTOMISED vs STANDARDISED.
• Inconsistent
• Expensive
• Relies on
performance
of staff.
• Consistency.
• Relies on
policy,
procedures
design layout.

36. TYPES OF SERVICES OFFERED BY
RETAILERS.
• Assortment.
• Convenience.
• Financial Services.
• Delivery.
• Returns & Repairs.
• Complimentary Services.

38. EVALUATE YOUR SERVICE
• Mystery Shoppers.
• Surveys.
• Social Media.

39. RECOVERING FROM
SERVICE FAIL.
• Listen to complaints.
• Provide reasonable solution.
• Resolve the problem quickly.

40. a
• a.

41. EXTRAORDINARY
SERVICE
EXPERIENCES.

42. It is not just about being nice
to the customer.

43. Shopping vs Buying.

44. ‘We are living in the moment of
great change…it’s important to
create an experience that’s
magical and memorable.’

51. WARBY PARKER.
• Shopping environment.
• Assortment.
• Staff.
• Repairs.
• Complimentary services (photo booth).
• Stakeholders.

53. WARBY PARKER.

59. EXCELLENT CUSTOMER SERIVCE
IS NON NEGIOTIABLE.

60. ANY QUESTIONS?