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Lands' End Helps Sears Close Customer Service Gap with J.C. Penney, Kohl's

J.C. Penney (JCP) beat Nordstrom (JWN) in the National Retail Federation/American Express (AMEX) Customers' Choice Survey but, even though its name didn't appear in the Top 10, Sears did pretty well, too, and in more ways than one.

Not only was 10th-ranked Nordstrom outdistanced by J.C. Penney, rated ninth, it was tied by humble Kohl's (KSS). Humble not in the sales sense, as it has done pretty well lately, but in the sense that its stores aren't even patterned after department stores and have as much in common with Target and Walmart as with Nordstrom.

As has been noted about the strength of web retailers â€" numbers two through five -- in the study, customers have expressed a preference for convenience and flexibility over old fashion pampering. J.C. Penney lets consumers shop its operations in multiple ways and with different degrees of interaction. Its well-regarded web site lets consumers shop at home in a tradition of direct sales that goes back to its catalogs. The company's stores have limited service, with stocking and checkout occupying more employee time than sitting at counters and selling customers. Yet, service can be had where appropriate, and J.C. Penney has been expanding the presence of Sephora shops in its stores for shoppers who want a little more pampering.

J.C. Penney was excited by its survey result, even issuing a press release that credited its performance to CustomerFIRST, an initiative it launched in 2008. The program includes service training that puts a priority on teaching employees to provide an easy, exciting and engaging shopping experience for customers.

Engagement is a central issue. J.C. Penney employees may have multiple duties, but the company wants them interacting with customers who want help and not hiding behind duties such as stocking. So, J.C. Penney conducted associate engagement surveys to rate employee interaction. In the aftermath of the NRF/AmEx study, the retailer stated that employee engagement is at its highest in company history.

Mike Ullman, J.C. Penney's chairman and CEO, commented. "We find that our highly engaged associates make a significant difference in how customers feel about shopping at J.C. Penney. CustomerFIRST is about providing valuable customer service beyond what is expected."

Yet, that being said, Sears did better than J.C. Penney in the Customers' Choice Survey, or at least part of it did. Sears Lands' End division came in at number eight, one slot ahead of J.C. Penney.

Lands' End, in its own press release touting survey results, said the company has traditionally emphasized customer service across the operation, whether at its Wisconsin call centers, through the Live Chat it offers online or in the 293 Lands' End Shops at Sears. So, like J.C. Penney, it offers customers multiple modes of shopping.

Of course, Land's End coming in one slot ahead of J.C. Penney in the NRF/AmEx ranking doesn't mean a lot for Sears or its prospects per se. Yet, Sears did manage to finish 13th in the rankings, just a few slots behind Penney and Kohl's, and ahead of Dillard's (DDS) and Macy's (M). Just as J.C. Penney gets a service performance boost from Sephora, Sears gets a bump from the Lands' Ends operations that inhabits its stores. Moreover, Sears has a working example of superior customer service at hand. Lands' End and the more service-oriented operations under affiliate Sears Canada are assets the company at large can build on when it and honcho Ed Lampert become less concerned about paying down debt and more interested in pumping money into operations.

Sears has shown an interest in innovation across its Internet business, something that can be accomplished relatively inexpensively, and it has experimented with alternative store concepts. Although the Sears and Kmart chains did not land in the Top 10 retail customer service providers' list in the most recent NRF/Amex survey, the potential exists within the parent organization to improve their scores with customers and, potentially, begin to do what they haven't managed, to build sales and profits through their store systems.