What retailers and service businesses can learn from “Inspecting Wal-Mart”

Wal-Mart, everyone’s favorite target (or love interest), or so Wall Street Journal’s Independent Street section seems to be proving. Of course, Wally World is always attracting media attention, it comes with being Goliath.

Earlier this month, Business Week published an article about an inspection tour of three Wal-Mart stores.

The subtitle for the article was “The retailer’s customer service scores low on our three-store visit”.

You’d think that they wouldn’t find it surprising, but sure enough…they did, as evidenced from this quote:

“The most significant finding is what appears to be an enormous problem with customer service….they often treat customers with indifference or worse…Without reasonable service, the company is forced to compete almost solely on price.”

Hello? Is there anyone left (excepting perhaps the Business Week author and their retail consultant) who doesn’t know that Wal-Mart is competing solely on price, rather than customer service? They’ve been pounding this into the American public forever.

While Bentonville has been making a point in their PR and investment calls that they are trying to improve their performance by improving customer service, but you don’t turn 4000 stores on a dime. Not even Wal-Mart can quickly put a Nordstrom’s face on the corporation known first and foremost for falling prices.

And there goes the lesson for every small business out there. If Wal-Mart thinks that they can’t even compete solely on price (despite their ads), how in the world do you think that YOU can?

For the small retailer, here’s the gem that you can use against them every day: They have the wrong staff on the front lines for this customer service transition they hope to make.

While this may seem like a bit of pigeonholing, facts are facts. Wal-Mart cashier and retail floor jobs do not generally attract the type of employee who values customer service and shops where customer service is outstanding. Without the experience of knowing what outstanding customer service is, it’s difficult to not only provide it, but sense when it is needed without being told.

Without extensive initial training and periodic follow-up training on how to recognize situations where this kind of service is needed and what to do about it – it’s going to be a steep climb. Currently, the Wal-Mart employee is well aware that they are working at a place where price is king and taking amazing care of the customer is 394th down the list.

Wal-Mart customers don’t expect amazing service. Why? Because they’ve spent decades telling us that they are the place to go for falling prices (etc). They’ve NEVER told us to go there for the service, and rightly so. It’s OK that we don’t get Best Buy service, much less Nordstrom’s service, at Wal-Mart.

Using recent and historic industry service research, Business Week’s article compared Wal-Mart’s service to other retail chains, noting that they were behind Kohl’s, J.C. Penney, Target, Dillard’s, and Sears – as anyone would expect, but those chains don’t compete primarily (if not solely) on price. The company that should truly be embarrassed is Macy’s, which came in between Wal-Mart and Kmart for customer service. What the heck are they thinking?

That’s exactly where a lowest price everyday vendor should be – above Kmart at all costs, but below upscale or “normal” retailers. Even the worst Wal-Mart is like a palace compared to the average Kmart.

Business Week’s tour continued in the electronics section, where they were surprised to get little or no help from the sales staff with questions or demonstrations – for some reason, trying to compare the Wal-Mart electronics department with Best Buy and Circuit City. Why anyone who has set foot in all three stores would attempt to compare them is laughable.

After finding no useful help in the electronics section, this quote:

“…worries that this lack of service means that Wal-Mart’s strategy is to sell at the lowest price, rather than compete for higher-end customers who may be willing to pay for a little expertise or hand-holding.”

Again, I ask: Is Wal-Mart low price strategy a surprise to anyone? It isn’t a worry, it’s a fact. It’s what most small retailers complain about – primarily if they haven’t figured out that competing on price (with Wal-Mart or whoever) is short-sighted, because the pure price shopper is the most fickle customer you have.

The tour continues with complaints about fashion and trendy clothes, fitting rooms and their lack of space, and lack of a fitting room attendant. Lipstick on a mule, folks. Wranglers, funny t-shirts, and NASCAR-logo clothing is “trendy clothes at Wal-Mart”. And again, that’s fine.

If Wal-Mart starts carrying Talbot’s petites, or Ann Taylor and Coach, will anyone get it? Will their current staff have the expertise to serve clientèle who buy those brands? No, so get off the expectation that they should.

I was disappointed in this article, primarily because the author(s) seemed distracted by comparisons to Best Buy, Ann Taylor and other more upscale retailers (Kohl’s, Dillard’s, etc).

Wal-Mart is what it is. Expecting them to be Dillard’s+Home Depot+Albertson’s+Best Buy with a dash of Nordstrom’s is silly.

You, on the other hand, have to be far more. You have to be Talbots, Nordstrom, or better – no matter what you sell. Fight price with service, with skilled, caring staff who can relate to your clientèle and offer a level of expertise and service that Wal-Mart (rightfully) doesn’t even dream of.

I’ll close this extended little rant with a story that retailers should take to heart:

I used to visit a Talbots store in Springfield MO once or twice a year, never more than twice. Despite my infrequent visits, the salesperson (same one there every time I went in, year after year – you shouldn’t expect that at a Wal-Mart) would always remember my name, address me as “Mr. Riffey” and ask what I have in mind for my wife today, calling her by name. Not only that, she knew the sizes, she knew the likes and dislikes. I don’t know how. Maybe she had an extensive file card system or something. Sure, I spent $300-$400 at a time in her store, but that was likely chump change compared to the average monthly spend by her regulars.

No matter what, that was outstanding service that I still remember like it was yesterday – 10 years later.

How many of your clients remember experiences in your store that happened 10 years ago?