April 8, 2009
Chains: Shorter Hours Improve Customer Service
Fifty-eight percent of those participating
in a RetailWire poll in February said retailers would benefit somewhat
or a great deal from the move by mall managers to reduce hours of operation.
Now, retailers that operate standalone stores
such as Best Buy are also cutting hours and the result is not just good
in terms of reducing expenses but it is also, the claim goes, working to
improve customer service.
The reason shorter hours work better for
customers, the rationale goes, is that it allows retailers to put more
workers on the store floor instead of spreading the same number of employees
out over a longer period of time.
"Typically after 9 p.m., we generally
have more employees than customers in the building," Robert Smith,
the general manager of a Best Buy in the North Hills Village shopping center
in Ross, PA, told the Pittsburgh Post-Gazette.
According to Mr. Smith, "The customers
told us they would rather have more employees here to help them during
these busy times than longer hours."
Discussion Questions: Will shorter hours
lead to better customer service? If yes, will it be readily apparent
to customers?
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Hours, like innings in a ballgame, can be shortened to save wear-and-tear on the players and reduce operating costs in the stadium, but the objective is still be to win the game. And to win the game your players must have the attitude to do those resultful things that please the fans and the owners during whatever number innings being played: WIN.
In retailing that relates to sincere customer service and good merchandising. Thus, one’s attitude as perceived by customers is more important than either traditional or reduced store hours.
Store hours are not a simple issue. Supermarkets went to 24 hours to compete with convenience stores. Drug stores went to 24 hours in support of the convenience and sick customer needs.
To determine hours of operation, one should include target-market requirements, competition and local customs. If the shopping area closes at 9:00 it does not do a store any good to be open until 10:00. If competition is open 24 hours, but the retailer does not achieve gross margin to even cover utilities, why do it? Every store has a labor target, based on sales. If the sales can be achieved in shorter hours, the customer receives–in theory–better service.
Just like stocking products to a specific store’s customers, store hours should be set by the individual store.
This is interesting timing for this question for me. I just spoke yesterday to a department store retailer about exactly this topic, and their response was that their customers consistently tell them that they would rather have fewer hours open, as long as good help is available during those reduced hours.
From the retailer’s perspective, especially for a department store, the minimal staffing requirements are so high that non-productive hours (i.e., first thing in the morning when no one is shopping in the store yet) are extremely expensive. It’s not like a small format retailer that can have a minimal staff of 1-2 people. So for the big retailers, it’s entirely possible to cut payroll while still adding people to the other hours.
So, it’s easy to be cynical, but I can also easily imagine how expensive it is to operate from 8-9pm on a Tuesday night compared to increasing staff from 11am-12pm on a Saturday. As a shopper, my vote is for more people on Saturday.
Will shorter hours lead to better customer service? Not necessarily. I do not really see any connection between the length of time a store is open and the quality of customer service. Customer service is a function of senior management’s attitude and commitment. Attitude meaning respect for the customer and his/her time and commitment means not only making adequate number of employees available on the floor, but also making sure that they have proper training to do the job they are asked to do, are empowered to take care of the customer, and motivating them to serve customers. What do these factors have to do with the length of time a store is open?
I can see the rationale, but let’s face it–retailers and malls are cutting hours not to improve customer service, but to save money. Improved customer service may be an accidental consequence, but nothing more.
Retail employees are so stressed at the moment over cuts in pay, furloughs, layoffs, etc. that they no doubt are trying to provide improved customer service but the tension level in stores makes it hard.
I agree with Al on this one. The motive is not customer service. The big guys need to save some cash so cutting store hours will save some money. Now, in my experience, I have to question if we are going to really see more people on the sales floor. Is the manager going to look at his P&L and say, wow, I can save X hours this week because we are closing earlier? I mean, I would. If I haven’t made my hours budget in the last few weeks or months because of rotten sales and I can make up the percent, why would I add more people? The traffic isn’t there.
Sure customers are going to love that idea but I really doubt it will translate into better service. All I can think about was that customer who wanted her tap shoes and had a huge hassle in retrieving them. Merchants: you can only sell products when your doors are open. Pretty simple theory.
Anyone who thinks that retailers will cut opening hours but maintain payroll hours is naive. Clearly the rationale for reduced hours is to save money not only on utilities but also (and more importantly) on hourly wage expenses. At a time when retailers are struggling to gain market share from each other, the idea of providing less convenience for the consumer is short-sighted. How about marketing your extended hours to your customers as a competitive advantage?
I’m sure that the customers that Mr. Smith, of Best Buy, spoke with would prefer to have more employees on the floor when they are shopping–wouldn’t we all. But let’s not confuse what sounds like some informal feedback with solid customer research. Unless Best Buy conducted some form of trade-off study with a representative sample of the store’s entire customer base, and that sample included people who prefer to shop at all of the current hours of operation, and they actually explained to them which hours they would be cut in the future under this new plan, then they can only imagine what the impact will be over time.
If the store does a great job of communicating the change in hours to their customers, and can avoid the dissatisfaction of the customer who drives 30 minutes to get there only to face a locked door or being hurried out before they make their purchase, then perhaps it does work. But the real issue is that businesses in general need to understand the Total Customer Experience, and quantify what’s important to customers and what trade-offs they are willing to make. If the goal is customer retention, higher share of wallet, and more positive word of mouth, then there’s a real danger in making the assumption that more staff is more valuable than knowledgeable staff, that low price is preferred to a better product mix, or even that a friendly greeter is more critical than a safe and clean parking lot.
This must be a trick question. Can anyone honestly make a legitimate argument that reducing hours for MOST retailers will actually improve customer service? The fact is most retail companies are constantly looking for ways to reduce labor costs. This was true before the current recession, it is true now and will be after the recession. Improved customer service comes from management that is absolutely committed to providing their customers with a great shopping experience.
Reducing hours is ALL about cost-cutting. What do you say to the customer who shows up at your store at 10:00 am only to find out that you don’t open until 11:00 am? Oh, we’re just trying to improve customer service!
Is there ever a truly legitimate time to cut hours? Yes, when the number of customers coming through the doors is so low that it no longer makes economic sense. For example, Best Buy has begun reducing some weekend hours from 9:00 or 10:00 pm on Saturday evenings until 7:00 or 8:00 pm.
When such a decision is made, it is absolutely essential that the company informs customers of the new hours and apologizes to customers for any inconvenience. It is also essential to pay attention to just how many customers show up at the store after hours when the change has been made. Seasonality may also be considered when making such a decision.
In the short term, reducing hours may allow retailers to focus their payroll dollars on peak hours. It may require additional head count to build in the scheduling flexibility to do that, while cutting back hours on existing staff. My sense, however, is that given the current climate management will be too tempted to take the payroll savings directly to the bottom line.
Interesting. Most of the comments come from consultants rather than those working in the stores and in the trenches.
Most of the issues in terms of customer service levels are dictated by the executives of retail firms rather than by those store management teams. Advice and recommendations coming from theorists tends to be flawed since it doesn’t take into account that myriad factors affect the “theory.” Having worked in enough stores that stayed open late and opened early to “get that additional sale,” most of the time the costs of staffing outweighed the sales generated. There are two customers a retailer serves and one is usually ignored by consultants and retail executives alike–the internal customer (employee). Companies need to take care of both customers, rather than one at the expense of the other. One isn’t necessarily more important than the other, it’s the contribution that each make to the success of the organization that is important.
Get out of the offices and walk the sales floor and listen to customers and employees alike.
How would this be for an honest spin on it:
“Our (former) associates will now be available 24 hrs/day (at least until they find another job.)”
There is no linear relationship between cutting hours and increasing service. Increasing service is a time intensive, training intensive, expensive endeavor.
Cutting hours of operation would result in cutting or altering the hours of at least some store personnel. This could result in losing some (strong) personnel to a retailer that isn’t cutting hours. This could only result in a weaker customer-service effort.
Cutting hours of operation will only increase customer satisfaction and service if you increase the quality of the interaction that the customer has while the store is open. There are still stores out there that do not compete on the hours they are open but the quality of what they offer. The example that comes to mind quickly is Chik-fil-A: they are never open on Sunday but make their numbers and provide the consumer what they want on the other 6 days. They use the “closed on the 7th day” as an advantage.
There are no shortcuts to a great customer experience. Although in theory cutting hours may make sense. In practice, I doubt it will make a substantial difference unless a particular retailer was on the border of a good/great experience already–and 98% are not even close.
The failure of too many retailers is to make assumptions about what customers want, expect and will tolerate, without ever speaking to their customers! I would propose assessing the current customer experience through a series of mystery shops, customer satisfaction surveys and ultimately, revenue generation by shopper (loyalty card information would be great). Then the retailer can make more appropriate decisions as to what customers will appreciate and tolerate.
In which areas is the retailer “delivering” on its brand promise, and where is it deficient? Once an Action Plan is formulated, can the same tools help the retailer track whether customers notice and accept the changes made? Does it make a positive difference? If the customer experience did indeed improve…is the customers’ average spend stable or improved?
Who is kidding whom? The single biggest cost related to the number of hours of keeping a store open is labor. I do not disagree with the idea that cutting the hours the store is open and keeping the same labor hours is good. In fact I believe it will pay off in sales. But, that question should be asked in good times and bad. A retailer has to question any hour that a store has more sales people than customers.
Unfortunately, what is going to happen as the hours are cut back is that labor is going to be cut back. That type of thinking pervades retail. However, I do bet on Best Buy. They have made many right decisions, particularly when it comes to the connection of labor and sales. They understand that the electronics market has been segmented into price and expertise. They understand that they can not compete with Wal-Mart on price, but they can provide service and comfort to the customer with expert customer service.
It may be true that cutting hours and cutting payroll may be what’s really happening, but I think the retailers that follow that strategy are cutting their own throats. As I have said before, the consumer is stressed and holding their cash tight. Making it more inconvenient for the shoppers to buy makes no sense. The retail winners will take this opportunity to beef up their in-store service strategies and execute consistently with a combination of service technology and lean payroll optimization. Having a bunch of associates standing around waiting for a customer is not the answer in any economy. Giving customers a way to access associates when and where they need something, reduces both customer and associate stress and brings them together when the customer is ready to buy. That makes sense.
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Hours, like innings in a ballgame, can be shortened to save wear-and-tear on the players and reduce operating costs in the stadium, but the objective is still be to win the game. And to win the game your players must have the attitude to do those resultful things that please the fans and the owners during whatever number innings being played: WIN.
In retailing that relates to sincere customer service and good merchandising. Thus, one’s attitude as perceived by customers is more important than either traditional or reduced store hours.
Store hours are not a simple issue. Supermarkets went to 24 hours to compete with convenience stores. Drug stores went to 24 hours in support of the convenience and sick customer needs.
To determine hours of operation, one should include target-market requirements, competition and local customs. If the shopping area closes at 9:00 it does not do a store any good to be open until 10:00. If competition is open 24 hours, but the retailer does not achieve gross margin to even cover utilities, why do it? Every store has a labor target, based on sales. If the sales can be achieved in shorter hours, the customer receives–in theory–better service.
Just like stocking products to a specific store’s customers, store hours should be set by the individual store.
This is interesting timing for this question for me. I just spoke yesterday to a department store retailer about exactly this topic, and their response was that their customers consistently tell them that they would rather have fewer hours open, as long as good help is available during those reduced hours.
From the retailer’s perspective, especially for a department store, the minimal staffing requirements are so high that non-productive hours (i.e., first thing in the morning when no one is shopping in the store yet) are extremely expensive. It’s not like a small format retailer that can have a minimal staff of 1-2 people. So for the big retailers, it’s entirely possible to cut payroll while still adding people to the other hours.
So, it’s easy to be cynical, but I can also easily imagine how expensive it is to operate from 8-9pm on a Tuesday night compared to increasing staff from 11am-12pm on a Saturday. As a shopper, my vote is for more people on Saturday.
Will shorter hours lead to better customer service? Not necessarily. I do not really see any connection between the length of time a store is open and the quality of customer service. Customer service is a function of senior management’s attitude and commitment. Attitude meaning respect for the customer and his/her time and commitment means not only making adequate number of employees available on the floor, but also making sure that they have proper training to do the job they are asked to do, are empowered to take care of the customer, and motivating them to serve customers. What do these factors have to do with the length of time a store is open?
I can see the rationale, but let’s face it–retailers and malls are cutting hours not to improve customer service, but to save money. Improved customer service may be an accidental consequence, but nothing more.
Retail employees are so stressed at the moment over cuts in pay, furloughs, layoffs, etc. that they no doubt are trying to provide improved customer service but the tension level in stores makes it hard.
I agree with Al on this one. The motive is not customer service. The big guys need to save some cash so cutting store hours will save some money. Now, in my experience, I have to question if we are going to really see more people on the sales floor. Is the manager going to look at his P&L and say, wow, I can save X hours this week because we are closing earlier? I mean, I would. If I haven’t made my hours budget in the last few weeks or months because of rotten sales and I can make up the percent, why would I add more people? The traffic isn’t there.
Sure customers are going to love that idea but I really doubt it will translate into better service. All I can think about was that customer who wanted her tap shoes and had a huge hassle in retrieving them. Merchants: you can only sell products when your doors are open. Pretty simple theory.
Anyone who thinks that retailers will cut opening hours but maintain payroll hours is naive. Clearly the rationale for reduced hours is to save money not only on utilities but also (and more importantly) on hourly wage expenses. At a time when retailers are struggling to gain market share from each other, the idea of providing less convenience for the consumer is short-sighted. How about marketing your extended hours to your customers as a competitive advantage?
I’m sure that the customers that Mr. Smith, of Best Buy, spoke with would prefer to have more employees on the floor when they are shopping–wouldn’t we all. But let’s not confuse what sounds like some informal feedback with solid customer research. Unless Best Buy conducted some form of trade-off study with a representative sample of the store’s entire customer base, and that sample included people who prefer to shop at all of the current hours of operation, and they actually explained to them which hours they would be cut in the future under this new plan, then they can only imagine what the impact will be over time.
If the store does a great job of communicating the change in hours to their customers, and can avoid the dissatisfaction of the customer who drives 30 minutes to get there only to face a locked door or being hurried out before they make their purchase, then perhaps it does work. But the real issue is that businesses in general need to understand the Total Customer Experience, and quantify what’s important to customers and what trade-offs they are willing to make. If the goal is customer retention, higher share of wallet, and more positive word of mouth, then there’s a real danger in making the assumption that more staff is more valuable than knowledgeable staff, that low price is preferred to a better product mix, or even that a friendly greeter is more critical than a safe and clean parking lot.
This must be a trick question. Can anyone honestly make a legitimate argument that reducing hours for MOST retailers will actually improve customer service? The fact is most retail companies are constantly looking for ways to reduce labor costs. This was true before the current recession, it is true now and will be after the recession. Improved customer service comes from management that is absolutely committed to providing their customers with a great shopping experience.
Reducing hours is ALL about cost-cutting. What do you say to the customer who shows up at your store at 10:00 am only to find out that you don’t open until 11:00 am? Oh, we’re just trying to improve customer service!
Is there ever a truly legitimate time to cut hours? Yes, when the number of customers coming through the doors is so low that it no longer makes economic sense. For example, Best Buy has begun reducing some weekend hours from 9:00 or 10:00 pm on Saturday evenings until 7:00 or 8:00 pm.
When such a decision is made, it is absolutely essential that the company informs customers of the new hours and apologizes to customers for any inconvenience. It is also essential to pay attention to just how many customers show up at the store after hours when the change has been made. Seasonality may also be considered when making such a decision.
In the short term, reducing hours may allow retailers to focus their payroll dollars on peak hours. It may require additional head count to build in the scheduling flexibility to do that, while cutting back hours on existing staff. My sense, however, is that given the current climate management will be too tempted to take the payroll savings directly to the bottom line.
Interesting. Most of the comments come from consultants rather than those working in the stores and in the trenches.
Most of the issues in terms of customer service levels are dictated by the executives of retail firms rather than by those store management teams. Advice and recommendations coming from theorists tends to be flawed since it doesn’t take into account that myriad factors affect the “theory.” Having worked in enough stores that stayed open late and opened early to “get that additional sale,” most of the time the costs of staffing outweighed the sales generated. There are two customers a retailer serves and one is usually ignored by consultants and retail executives alike–the internal customer (employee). Companies need to take care of both customers, rather than one at the expense of the other. One isn’t necessarily more important than the other, it’s the contribution that each make to the success of the organization that is important.
Get out of the offices and walk the sales floor and listen to customers and employees alike.
How would this be for an honest spin on it:
“Our (former) associates will now be available 24 hrs/day (at least until they find another job.)”
There is no linear relationship between cutting hours and increasing service. Increasing service is a time intensive, training intensive, expensive endeavor.
Cutting hours of operation would result in cutting or altering the hours of at least some store personnel. This could result in losing some (strong) personnel to a retailer that isn’t cutting hours. This could only result in a weaker customer-service effort.
Cutting hours of operation will only increase customer satisfaction and service if you increase the quality of the interaction that the customer has while the store is open. There are still stores out there that do not compete on the hours they are open but the quality of what they offer. The example that comes to mind quickly is Chik-fil-A: they are never open on Sunday but make their numbers and provide the consumer what they want on the other 6 days. They use the “closed on the 7th day” as an advantage.
There are no shortcuts to a great customer experience. Although in theory cutting hours may make sense. In practice, I doubt it will make a substantial difference unless a particular retailer was on the border of a good/great experience already–and 98% are not even close.
The failure of too many retailers is to make assumptions about what customers want, expect and will tolerate, without ever speaking to their customers! I would propose assessing the current customer experience through a series of mystery shops, customer satisfaction surveys and ultimately, revenue generation by shopper (loyalty card information would be great). Then the retailer can make more appropriate decisions as to what customers will appreciate and tolerate.
In which areas is the retailer “delivering” on its brand promise, and where is it deficient? Once an Action Plan is formulated, can the same tools help the retailer track whether customers notice and accept the changes made? Does it make a positive difference? If the customer experience did indeed improve…is the customers’ average spend stable or improved?
Who is kidding whom? The single biggest cost related to the number of hours of keeping a store open is labor. I do not disagree with the idea that cutting the hours the store is open and keeping the same labor hours is good. In fact I believe it will pay off in sales. But, that question should be asked in good times and bad. A retailer has to question any hour that a store has more sales people than customers.
Unfortunately, what is going to happen as the hours are cut back is that labor is going to be cut back. That type of thinking pervades retail. However, I do bet on Best Buy. They have made many right decisions, particularly when it comes to the connection of labor and sales. They understand that the electronics market has been segmented into price and expertise. They understand that they can not compete with Wal-Mart on price, but they can provide service and comfort to the customer with expert customer service.
It may be true that cutting hours and cutting payroll may be what’s really happening, but I think the retailers that follow that strategy are cutting their own throats. As I have said before, the consumer is stressed and holding their cash tight. Making it more inconvenient for the shoppers to buy makes no sense. The retail winners will take this opportunity to beef up their in-store service strategies and execute consistently with a combination of service technology and lean payroll optimization. Having a bunch of associates standing around waiting for a customer is not the answer in any economy. Giving customers a way to access associates when and where they need something, reduces both customer and associate stress and brings them together when the customer is ready to buy. That makes sense.