Are there any stores you enjoy patronizing because you feel valued as a customer?

• Stores where you come back again and again …. That the personnel may know you and your preferences . . . What is that store doing to build a relationship with you . . .
• How do retailers add value to your relationship with them?
• E.g. personalization of web sites – “Hello, Joe, welcome back. What would you like to do today? Log on to your address book?”
• Personalization of the in-store experience. – “Hello again, Jane, it’s good to see you again. How was that sweater you bought your mother?
• What do retailers do that damage or prevent establishing relationships with their customers?

• Explain “Value” in Retailing
• all the benefits you receive from a purchase
• is it more? The benefits you receive from any interaction with a retailer?
• Examine Relationship Building
• Goods Retailers
• Services Retailers - appliance repair
• Web sites
• Describe Relationship Nurturing
• Keeping a relationship “going”

Value Chain

• Involves:
• Manufacturer – Nike gives you “speed”
• Wholesaler – gives you selection when and where you want it, good inventory process that keeps stock plentiful
• Retailer – gives you dignity (e.g. Lane Bryant)
• Series of Activities and Processes
• Provides a Given Level of Value for Consumers
• Closely Related to:
• Desire to Make Profit
• Type of Strategy Pursued

• Benefits from Purchase - e.g fitness centers
• Varies by Shopper Type - what a young family may want varies from what senior citizens want.
• E.g. McDonalds playland vs. quiet restaurant for social time
• Do the added values match your positioning strategy?
• String quartet at a discounter vs. string quartet at Tiffany’s

Value-Oriented Strategies- add value that is important to consumers
Expected Retail Strategy

• What does the customer expect? E.g. supermarket
• What is the minimum that the customer will expect?

• What exceeds expectations?
• What will add to the service in a meaningful way?
• Supermarket:  food samples vs. live piano playing, vs. customized cuts of meat and prepared food
• Barnes and Noble offering places to sit, to read, to enjoy a cup of coffee
• Neiman Marcus offering fashion shows

Thinking of Future Values
Potential Retail Strategy

• What could be done? What could be unique?
• Local Hardware Store, competing with Home Depot, customized paint mixes for its neighborhoods
• Home Depot adds delivery, concierge service in New York City store (with no parking!)
• Home Depot added donuts for early patrons who are tradespeople

Value-Oriented Strategy Pitfalls

• Planning Value with Only A Price Perspective
• Providing Value-Enhancing Services Customers Don’t Want or Not Willing to Pay
• Meaningless services
• Services that are too costly
• Competing in the Wrong Value/Price Segment
• Believing Augmented Elements Alone Create Value
• Relying too much on them
• Paying Lip Service to Customer Service
• Insincere, fragmented, inconsistent

Is your treatment the same every time you ___?
E.g. hairstyling, doctor’s visits
Satisfaction Based on:
Expectation
Past Experience
Perceptions
 

Relationship Retailing
Total Retail Experience – all the aspect of the retail experience can have an impact on the customer

•  Waiting rooms are often overlooked, but provide a first contact point with the service provider
•  Family doctor studies pointed out the importance of the first contact, restrooms, confidentiality

Customer Service Checklist

• Do We Trust Our Customers? Do our customers trust us?
• Do We Stand Behind What We Sell?
• Do We Stress Promise-Keeping in Our Firm?
• Do We Value Customer Time?
• In store, web site, catalog
• ordering time vs. time for possession of purchases
• Do We Communicate with Customers Respectfully?
• Do We Respect ALL Customers?
• Disabled customers
• Do We Thank Customers for Their Business?
• Do We Respect Employees?

• Customer Base
• Core Customers - “best customers” - who are they? How can we identify them? For instance, banking strategies used online data to analyze behavior

• Expected - minimum
• Augmented - what makes a difference? Wal-Mart greeters are effective - why?
• How add such services to web sites?
• Cookies allow you to personalize, but do they harm consumer trust????
• Employee Empowerment – The Ritz Carleton Approach

What Customer Services are Worth It? What are you trying to achieve?

• Retailer credit cards
• Gift registry
• Refreshments
• Personalized delivery
• Loyalty (frequent shopper ) programs
• Baby sitting
• Restrooms
• Pay phones
• Special promotions
• Multichannel promos
• and many more

• Do these meet or exceed expectations?
• Do they produce customer loyalty?
• Do they reward desired behaviors?
• Do they bring in new customers?
• Are they irrelevant?
• Do they take away from your core business?
• Tracking effectiveness

Services Retailing
Rented-Goods Services

• Hertz
• Cort Furniture Rental

• Midas Muffler
• Dry Cleaners

• E-Center
• Aquarium
• Campus Center for the Arts

Technology and Relationships
Roles Must Be Clear
Technology VS Humans - which type of format gives better service? More satisfaction? Builds loyalty?

Are there some businesses that MUST have a bricks and mortar location?
Consistent With Organization Objectives

How much of your business depends on personal relationships?
Customers Expect Certain Advances - e.g. ATMS, web sites, links that work
 

Technological Innovations

• P-O-S Scanning Equipment
• Self-Scanning – with safeguards – such as weight monitors
• Electronic Gift Card
• Interactive Electronic Kiosks  - consumers can obtain product information while in store
• Mass Customization
• RFID – radio frequency identification
• Smart stores – for instance, having a monitor in a fitting room that displays all information and sizes of an item that you have brought to try on.

Consumerism
Right to be Informed
Right to Safety
Right to be Heard