As reported in the business-news aggregator service Morning Brew, “Kohl’s stock fell as much as 18% after it missed Q3 earnings and slashed its fiscal 2019 profit outlook. CEO Michelle Glass blamed a race to the bottom for promotions and warmer weather in September.” Retail news this week hasn’t been great for many of the larger chains, and this particular point about the “race to the bottom” is a big reason why.
Many businesses—especially the larger chains—rely on promotions and seasonal buying trends to forecast their bottom lines. The problem is that trends are always changing and price-cutting erodes profit. As a consequence, these businesses seek to cut costs in other ways to fatten their margins. Finding cheaper, lower-quality goods to stock is one way. Inevitably, however, these companies will end up with less-than-ideal staffing using undertrained employees.
Think about the last time you were in a large retail store, be it a place like Kohl’s (or Macy’s, or TJ Maxx, or a myriad of others). Did you see hardly any employees on the floor, assisting customers? If you did, count yourself lucky. Most of the time, the staff is relegated to the registers with a few out on the floor restocking. The customer experience is detached and impersonal as a consequence.
No wonder retailers are ceding business to the Internet or to their competitors who’ve been more willing to cut prices even further. From the perspective of the customers, why show any kind of loyalty to a business when that business seems so uninterested in them? At this point, those retail stores are becoming nothing more than glorified sales catalogs whose only advantage is that you can try their products on in the changing rooms.
Race to the bottom? More like free fall.
This is why the customer experience is so important. The most successful businesses (think of the higher-end boutiques, for example) devote themselves to making sure their customers are treated like guests rather than numbers. Customers are greeted, assisted, and given personal attention throughout their entire visit. Yes, customers pay more for that experience. And that’s the point.
Your business can join the race to the bottom with the smallest margins and the smallest staffing possible, offering the least interesting experience imaginable, sure. But those mega-retailers with their massive buying power are always going to win if that’s what you want to call it—much to the disappointment of their shareholders, as we’ve seen this week. Here’s a better idea: double down on your customer services and salespeople. Train. Test. Train some more. Keep testing. Your customers expect more from you if they’re going to shop at your company rather than someone else’s. It’s time to deliver.
So, let’s talk. You can reach us using our Contact page, or give us a call directly at (406) 586–3036. The Brandt Group is ready to help your business race to the top with our world-class mystery shopping and training services. Start delivering today and get out of the free fall.
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