Industry News | December 30, 2009

Retail Service Slacking, Report Says

Despite working in a sector averaging roughly 50,000 job losses per month since the start of the recession, retail employees are not providing high-level customer service, according to data from The SALT & Pepper Group's new Retail Service Quality Index (RSQI).

The RSQI, which measures 39 separate service opportunities in retail settings, presents benchmark data on a scale from 0 to 100. The index stands at a mediocre 48.2 for 2009, based on studies carried out at 73 retail outlets in six different states. Service components dragging the index down include retail associates' greeting skills, failure to recognize when shoppers need assistance, and a lack of leadership presence on the sales floor.

"Curiously, the recession and associated job insecurity have not correlated into higher customer service quality by retail employees," says Rick Miller, consulting analyst at The SALT & Pepper Group. "Store managers and front-line associates are forced to do more with less; they may be lacking essential training, and they appear to have lost their motivation. They don't see that, on a personal level, many potential rewards still exist."

Many customer service failures are sins of omission. In 27 percent of the 1,027 interactions measured in the RSQI study, the service opportunity being measured simply is not performed. In other situations, the skill level with which interactions are performed varies greatly. The study finds that retail associates seldom initiate contact with shoppers appropriately, struggle to manage multiple customers in busy environments, and often do not close sales in a manner that strengthens the retailer-customer relationship.

The retail sector generally scores well on providing excellent checkout processes and clean, inviting shopping environments, but lags in the human components.

"Economic recessions tend to breed innovation and process improvements," Miller says. "With margins razor thin and pricing about as low as it can go, retailers have to turn to their people to drive their brands. Retailers that train associates and store leaders to interact genuinely with customers will build the relationships necessary to ensure repeat business during tough times. A mediocre RSQI means a market share opportunity for retailers who get customer service right."

The index, which measures customer service activities only (not pricing, merchandising, or other activities), comprises 39 service opportunities grouped into six categories: store greeting and initial contact; department-level service and advice; point of sale/store exit; merchandise returns or exchanges; leadership; and teamwork (how associates interact to solve customer problems). The index measures associates on the skill with which they perform each service opportunity and their level of engagement with the shopper while doing so.

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