Reasons Why Customer Service in Retail Is Important

Customers are a big key to success, especially in the retail industry. A loyal customer base, no matter the size, can help retail businesses move forward and grow. This means that taking care of your customers—prospects, new ones, and repeat customers—is essential. This is where customer service in retail comes in.

Retail customer service refers to the support and assistance provided to customers in a retail setting, such as a store, online shop, or other point of sale. It involves retail staff helping customers with their inquiries, guiding them to products, handling transactions, resolving complaints, and ensuring a positive shopping experience.

Good customer service in retail is defined by several key characteristics that, together create a positive and memorable experience for customers. Here are the main elements that define good customer service:

• Being attentive to customers’ needs
• Having a deep understanding of the products and services
• Minimizing wait times, streamlining transactions, and resolving issues quickly
• Creating personalized services and tailoring the experience to the individual customer
• Having the ability to understand and share the feelings of the customer
• Taking the time to assist customers thoroughly without rushing them
• Effectively resolving issues or concerns
• Having a positive attitude while interacting with customers
• Being accessible to all kinds of customers, whether it’s in-store, online, or over the phone

Effective retail customer service should have these elements. As a whole, this will aim to make the purchasing process smooth, satisfying, and enjoyable, encouraging repeat business and customer loyalty.

While this has always been an important aspect, nowadays customer service in retail is even more crucial than ever. According to Zendesk, 60% of modern consumers say they now have higher customer service standards. They also report that 90% of customers will go out of their way to shop with businesses that provide personalized service. These are significant numbers that highlight the seriousness of customer service in retail.

Take a look at the several reasons why customers in retail are crucial:

It improves customer loyalty
Exceptional customer service creates a strong bond between the customer and the retailer. When customers feel valued and receive personalized attention, they are more likely to return. Consistent positive interactions can turn occasional shoppers into loyal customers. Research from Microsoft showed that 96% of consumers say customer service is important to their choice and loyalty to a brand. Additionally, loyal customers and fans are more likely to become repeat buyers or refer a brand to others.

It builds positive reputation
A retailer’s reputation is significantly influenced by customer service quality. Satisfied customers are more likely to share their positive experiences with others, both online and through word of mouth. In contrast, poor service can lead to negative reviews and harm the retailer’s reputation. According to studies, 77% of customers would recommend a brand to a friend after having a single positive experience. On the flip side, it should also be noted that customers who have a negative experience are more likely to tell others about it, especially online.

It gives competitive advantage
A PwC survey found that 73% of consumers say that a good experience is a significant factor in their brand loyalties. In a crowded retail market, superior customer service can be a key differentiator for a retail business. While products and prices may be similar across stores, the quality of service can set one retailer apart from another. Customers are more likely to choose a retailer that provides a welcoming and supportive environment.

It helps increase sales
Employees who provide excellent service can directly influence sales by helping customers find the right products, upselling, and cross-selling. When customers feel supported, they are more likely to complete purchases and buy additional items. Research indicates that 86% of buyers are willing to pay more if they get to experience a great customer experience. This shows that customer service is such a big part of any business now.

It improves customer retention
Retaining existing customers is far more cost-effective than acquiring new ones. Studies suggest that a 5% increase in customer retention can boost profits by 25% to 95%. Good customer service ensures that customers are satisfied with their shopping experience and are more likely to return. Addressing their concerns and resolving issues promptly reduces churn rates.

It helps brand loyalty
Customer service is a key driver of brand loyalty. When customers consistently receive excellent service from a brand, they develop an emotional connection with the brand. This loyalty translates to repeat business and advocacy for the brand. According to InMoment, 60% of loyal customers will buy more frequently from their preferred brands. The more you provide good customer service, the more you’ll encourage customer loyalty.

It allows for feedback and improvement
Customer service interactions are a valuable source of feedback for retailers. Understanding customer needs, preferences, and pain points allows retailers to improve their offerings and address issues before they escalate. According to research, 77% of customers view brands more favorably if they proactively invite and implement customer feedback. This means a feedback loop is essential for continuous improvement.

It helps in crisis management
In the event of a problem or crisis, effective customer service can turn a negative situation into a positive one. How a retailer handles complaints or issues can significantly impact customer perceptions. Resolving issues quickly and professionally helps maintain customer trust. Studies show that 95% of customers are willing to give a brand a second chance after a negative experience if their issue is handled correctly.

Overall, these various reasons highlight the critical role of customer service in retail. Retailers who know how to focus and improve on customer service will find continued success in the market.

While customer service in retail is usually an in-person experience, it also comes in many aspects and forms of helping the customer and creating a seamless experience for them. It’s up to you, as a retailer, to find solutions and implement best practices that will ensure a good customer service experience.

Here are a few effective tips for good customer service in retail:

1. Train staff regularly - Invest in ongoing training for your employees to ensure they are knowledgeable about products, skilled in customer interaction, and up-to-date on company policies. Conduct regular workshops or online training sessions on product knowledge, communication skills, and handling difficult situations.
2. Resolve issues proactively - Address potential issues before they escalate by being proactive in identifying and effectively solving problems. Train employees to recognize signs of customer dissatisfaction and empower them to offer solutions or escalate the issue to management immediately.
3. Implement the customer feedback look - Encourage customers to provide feedback on their experiences and use this information to make continuous improvements to the retail store. Set up easy-to-use feedback mechanisms such as surveys, suggestion boxes, or online review platforms. Act on the feedback to show customers that their opinions are valued and the business is committed to improving.
4. Offer multi-channel support - Provide timely customer service across multiple channels, including phone, email, live chat, and social media, to meet customers where they are. Implement an omnichannel customer support system that integrates all available channels, ensuring seamless communication and consistent retail customer service.
5. Utilize and maximize digital labels - Digitize and automate your product pricing and updates by utilizing digital labels such as Newton labels. This saves time and manual labor, which allows staff to focus on customer service. Not only that, but Newton labels also have two programmable buttons that customers can use to call for staff assistance or signal low stocks. Another variation, Newton TOUCH, can enhance customer service, with its swipe-enabled features. Maximizing the features of a retail technology like Newton labels will allow retailers to significantly reduce wait times and increase efficiency throughout a retail establishment. 

At the end of the day, excellent customer service not only drives sales but also builds long-term relationships, enhances brand reputation, and provides a sustainable competitive advantage. Talk to our experts now and find out how a digital label solution like Newton can strengthen the customer service of your retail business.

References

1. Zendesk. "Retail Customer Service." Zendesk, https://www.zendesk.com/service/ticketing-system/retail-customer-service/.
2. High Speed Training. "Good Customer Service in Retail." High Speed Training, https://www.highspeedtraining.co.uk/hub/good-customer-service-retail/.
3. Morgan, Blake. "50 Stats That Prove the Value of Customer Experience." Forbes, 24 Sept. 2019, https://www.forbes.com/sites/blakemorgan/2019/09/24/50-stats-that-prove-the-value-of-customer-experience/.

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