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Retail Needs A Longer Recession

"The silver lining of a recession is that it clears out the weaker competitors of the high street." That's what the finance director of a well-known clothing retailer told me at the end of 2008. He planned to make sure his business is a survivor --and pick up his rivals' customers as a result.

Just as important, explained another retail FD (this time of a grocery chain), a recession puts real fear into staff. They know that unless they offer a great experience, what little money is being spent will go elsewhere -- and they'll be on the dole.

But based on the highly localised and unscientific evidence of a recent shopping trip, this second FD is going to be sorely disappointed.

Of course, retail is hurting in the UK. My stroll through Wimbledon's Centre Court shopping centre revealed a large number of vacant units.

Across the country, "the average retail vacancy rate has risen from four percent a year ago to almost 12 percent now," according to Local Data Company (LDC) stats published by the BBC. Its report warns: "About 12,000 independent shops and nearly 7,000 branches of major chains have closed so far this year in England and Wales."

So it was staggering that I ended up having three utterly hopeless retail experiences. Each one says something different about retail while this recession rumbles on. It's frankly unforgivable that, in each case, managers either don't know or can't change their customer service proposition.

(Pic Zabowski cc2.0)

My first lesson was in staff organisation and shop processes. I was returning a couple of things to a women's clothing and accessories shop, which had a big sale on and was one of the busier outlets in the mall that day.

There were upwards of 10 staff on duty, yet most of them were engaged in stock-taking and shelf-stacking. Only one cash register was open in each half of the store, and the stock-takers kept interrupting the till operators for advice.

The counter was still strewn with returns -- not a great impression -- and the service was so incredibly slow that several customers left the queue in frustration.

That's utterly unforgiveable at any time, least of all in a recession. Worse, having queued up, I was told I couldn't get a cash refund, and had to choose an exchange item -- then queue again (for 15 minutes, as the merchant system was rejecting everyone's cards), before filling out my name an address on a refund form.

If you have customers in the shop, you're 90 per cent of the way there. Only lazy customer service management can thwart you -- as it did in this case. I choose where I spend my money based on which retailers I want to survive the recession -- and that shop is now firmly in my dead pool.

  • The second stop was a lesson in stock management. I'm a pretty normal shoe size (UK10). I picked out two styles at my next shop and asked for my size. No luck. So I picked out two further styles -- compromise choices, but I was desperate to make a purchase -- only to find them also unavailable in size 10.

    My finance director friends might applaud working capital management at this retailer -- less stock means less cash tied up. But retail is all about availability. If I wanted to wait, I'd shop online. Customer service is all about fulfilling promise, and the promise of a shop is stock. Another lost sale.


    The final lesson was in initiative. I have a mortgage and a savings account at a building society. But my four month-old daughter still doesn't have a child trust fund or savings account and the cheques are mounting up. So I popped in to open an account. The branch wasn't busy - there was a cashier, a greeter and at least one executive wandering around in the back. But I was told we needed to make an appointment to see an adviser and to bring along the required paperwork.

    I know regulations apply to opening accounts, even for babies. So I can overlook their inability to complete the task that day. But surely, when there's no other customers in the branch, we could be helped by someone to get further in our quest to give them money that will sit on their balance sheet for 18 years?

    In short, then, retailers don't seem to have cottoned on to "survival customer service" yet. To have one disappointing retail episode during a summer of recession might be considered bad luck. To have three is simply carelessness by British management.

    And it is management. Surly staff need to be trained and empowered; rubbish systems updated; stock properly monitored. If I was running a shop or training retail staff, I'd spend a couple of days in John Lewis (unsurprisingly, doing quite well in the recession) and copy what they do.

    When everyone's job is on the line, you'd expect staff and managers to listen to what those two FDs were saying to me. Serve your customers well - or die.