Saturday, November 3, 2007

A goldmine in plain sight

The standards of service at many mass market retail outlets has fallen to an astonishing low point. It is a huge opportunity for the right minded marketer to capitalize upon, even in circumstances in which they are selling a commodity offering, or in situations in which the normal consumers freedoms are not in place.

Take two shops literally opposite each other on a particular concourse at San Francisco airport. Both sell largely the same items. When encountered yesterday, both were ineptly run. Long lines snaked through and out of the stores because counter staff moved slowly, thought slowly and reacted slowly. Even an activity as simple as handling payment and operating a till became an unnecessarily time-wasting undertaking.

Friends have remarked that there is no value to making either of these operations more efficient. The consumer is a captive one: their choice is confined. There is literally nowhere else to go other than a place selling the same stuff at the same inept service. The friends are also quick to mention that it's not possible to get better employee contributions and commitments when paying minimum wage.

They miss the point in dramatic fashion:

1. Where products are commodities - even of basic staples - service is the opportunity to be a differentiator.

2. Doing so can sustain a modest price premium, one which (presuming the consumer notices) he is probably prepared to pay if he understands that speedy efficient service is part of the transaction beyond the actual item being purchased.

3. It makes sound economic sense to pay employees MORE for retail positions in which higher productivity translates directly into a greater volume of customer processing and therefore sales (to expect minimum wage earners to perform higher is unrealistic)

4. The fact that the consumer is captive - and does not have the typical freedom of choice to exercise - does not mean she or he does not still want better service.

5. The economic benefit for the shop delivering faster, more efficient retail service is to have a greater share of customers. It would require disrupting an existing consumer belief and behavior. Most people don't ever stop to consider where else to buy what they're after: they presume product prices and service are identical in an airport.

6. Promoting the service advantage where and when it matters - before prospects have wandered into a store - enables them to be conscious of a service that may be very much needed and preferred over an unknown alternative, even if that alternative is just a few yards away. This is not unlike the pitches that stall owners colorfully deliver against competing vendors in a marketplace, bringing awareness of something special to attract greater than fair share of traffic.

It is hard for any one who has been on the receiving end of retail service in an airport recently not to come away without being painfully aware of how much room for improvement there is. And where glaring potential for improvement lies, gold is often to be found.

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