Saturday, March 30, 2013

Indian Retailers’ Priority Mismatch

I was going through  RAI – TCS Study 2013.
What I found interesting is this:
At retail store level priority wise  focus area for 2014 are 
1) Overall Profitability
2) Improving Customer Service
At organisation level priorities are ; 
1) Improving Bottomline
5) Improving Customer Services
6) Improving Loyalty  and Retention
9) People Training
10) CRM and
11) Process Improvements
Companies want to improve customer experience (CE) at store level however things which improves customer experience finds priority 5 onward at company level.
This is the problem not only of retail industry but most of the industries.
Every companies in every industries have become aware that Customer Experience is the way to be and that is the only thing that will give them sustainable competitive advantage. This is even clear from the above study as companies wants Customer Service as priority Number 2. I still doubt that what companies means customer services is not what customer experience is all about. However lets for a moment assume that what they mean customer service is infact customer experience.  Even though priority to better that is not visible at enterprise level.
Companies want to better Customer Service/Experience but do not put the same at higher priority @ enterprise level.  Therefore at enterprise level action will not be commensurate with the priorities stated at store levels.
For real experience creators like Starbucks, Virgin , Apple or Zappos , customer experience is the  top most priority. It is the better CE that drives bottom-line. These companies have focus on better and better CE which in turn drives top as well as bottom-line. CE has assumed the role of key differentiation for these companies.
Forrester Research says better CE drives bottom-line, top line and builds brands on social channels. In surveying nearly 5,000 consumers, Forrester found that across many industries they prefer better experiences than lower prices.  There are case studies which suggests better CE can support triple bottom-line i.e. profit, people and planet.
Point is , better CE drives top-line & bottom-line , Indian retailers wants the same at retail store level however at enterprise level they act differently.  Unless enterprise as a whole focus on better CE and aim to become champion of CE in their own segment , they will continue to have this kind of mismatch and they will continue to find bottom-line growth where it is hardly available.
This report is telling all the players in retail industry why they are struggling to achieve their priority number 1 i.e. bottom-line growth.
Put better Customer Experience at the center of your store level and enterprise level priority number – 1  ( Irrespective of Industry ). That is the starting point of every other initiatives and focus area.

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