So, when Walmart and their competitors have squeezed every last ounce out of their suppliers and are to within small fractions of U.S. cents of each others’ pricing, where will they turn next for competitive advantage? There is a natural end to how low things can go, particularly with escalating fuel prices adding an unpredictable variable to manufacturing costs.
A question that will become increasingly pertinent over the next few years came to mind as I was working through a proposal we’re preparing for one of Canada’s largest retailers: If you’ve been putting all of your eggs into the low price basket, where to next?
How about – shockhorror – customer service?
The challenge, of course, is that customer service is expensive. Call centres and properly trained staff cost a lot of money, and ultimately they’re bandaids – people only call the 1-800 number when they are frustrated, annoyed or utterly confused and unable to find help elsewhere, meaning that the problems they have tend to require intensive and delicate solutions.
However, offering multiple alternate online channels, many of which help connect consumers with each other as well as product and service experts within your organization, is both less expensive and far more beneficial (just think of the intelligence gathered and goodwill spread. Can a call center or magazine ad deliver that?).
Once we move beyond the price wars (which is inevitable) it will be about the experience, and that doesn’t mean the colours you paint your retail location. Experience refers to how people feel when they deal with you, and if they feel like you are listening, like you want a relationship in order to make their experience more positive, you will do very well indeed.