Proposing a “service war” not a “price war” for specialty stores

Doug Fleener, a fellow Retail Wire panelist, writes today about how specialty stores can compete more effectively against big-box and discount stores. Doug’s position is that customer service, not price, needs to be their competitive advantage. I agree, but I think the definition of “customer service” is more nuanced than in the past:

Small specialty stores are just as focused on effective payroll management as the “big box” stores…or they should be. So their focus in terms of customer service ought to be the quality, not quantity, of their sales associates. Great training on how to connect with the customer and how to communicate product knowledge is a critical task in this environment.

But there’s more to “customer service” than the traditional definition of “plenty of good sales help,” and technology can help achieve broader results. For example, does the small retailer make cost-effective use of CRM methods to ensure that the “best customer” is identified, encouraged to make repeat visits and to increase her average purchase? Does the small retailer have good supply-chain disciplines that allow it to keep most-wanted items in stock and flowing regularly?

Doug is right: The small specialty retailer who tries to win on price is likely to get run over by the big-box stores. But, at the same time, winning through customer service is a much more complex challenge than in the past.

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