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Target's math doesn't add up for this 'guest'

August 15, 2014

Consumer confidence in a retailer can be a fragile thing. Once loyal customers may find themselves looking for alternative shopping destinations after being disappointed with a given merchant over time. In my case, the most current example of this is Target.

Before 2010, I thought Target could do very little wrong. That was the year we discovered following a trip to the local store that some of the coupons we gave the cashier were not redeemed properly. Later, we found this was a problem that affected many other "guests" (Target parlance for customers) besides us.

Like others, we had some hiccups doing business with Target.com after it split with Amazon before the holiday season of 2011. This relationship has improved in some respects, but given the choice, we're likely to default to Amazon if the same product is available.

The following year, if memory serves, was the year that Target's P-fresh initiative was rolled out locally. Trips to my local store often left me shaking my head. There were holes on the shelf inventory, freezer burned packaging in the frozen section, leaky milk cartons and past-date items in the refrigerated case. Although there are fewer out-of-stocks, many other aspects of the store's performance have failed to improve substantially.

Last year was the data breach. Had we been victimized by Target's failure to protect our personal information, I could safely say we would have moved elsewhere. Luckily, at least to date, it doesn't appear as though Target's failure to protect customer data has affected my family. We were also happy to take advantage of the 10 percent discount Target offered as an "apology".

That brings me to the present. I was extremely pleased to learn that Target was including its unscented private label baby wipes in the company's new online subscription program. As added bonuses, Target.com gave five percent off for scheduling regular deliveries plus another five percent discount when it was billed to REDcard. In total, Target's receipt says in bright red that we saved 10 percent and got free shipping to boot.

But there was a mystery to solve: on an order with a subtotal of $57.96, a 10 percent discount would come to $5.79. Instead, our discount was $5.65. This prompted a call. A pleasant person explained that Target gave me a straight five percent off my subscription to bring the price to $55.06. It then took five percent off that number to arrive at the final price of $52.31 — a nice discount, but clearly not 10 percent for those of us who have some grasp of percentages.

Will this latest issue stop my family from shopping at Target or on Target.com? The answer is no. But, it does make me wonder how we'll react to the next little problem that makes us further doubt the chain. It also makes me wonder how many others have already given up and moved on. I know the thought has crossed my mind.

FINANCIALS:     [NYSE:TGT] [ ]

Discussion Questions:

Do you think consumers typically stop shopping at a retailer due to one big problem or a series of smaller incidents? What can retailers that have had a series of mishaps do to restore confidence?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How many chances do you typically give a retailer before shopping elsewhere?

Comments:

Consumers might take a break, or look for alternatives, if they have had a couple of bad experiences at any given retail chain. However, let's be honest, if a consumer normally shops at Target odds are she will eventually forgive and forget and come back to Target. Why? Because when its all said and done, she is a "Target shopper." She shops at Target because this particular retail chain carries what she wants to buy much more so than the alternatives. I think statistics will back this up. But retailers need to be extremely consumer-responsive in order not to lose a customer for an extended period of time.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Consumers stop shopping at a retailer for one reason: disappointment. It may come from any number of triggers, such as rude employees, pricing, inventory issues, inconvenience, etc., and whether it takes one event or many small ones is highly individual and therefore somewhat irrelevant. What is relevant is having a user focus, looking at every touch point from a shopper's perspective and understanding how they approach every micro-encounter they have with a store, including its products and staff. It's a classic user experience exercise, looking at the shopping experience via journey mapping, albeit many many variants, and identifying, then solving (or at least trying to solve), each potential hiccup that may be "the thing" that pushes someone away. Difficult, but a necessary exercise in continuous improvement.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Depends greatly on how big the problem was, and how the retailer resolved it. Generally, one big goof is OK, if resolved well. Two big goofs, and you lose me for a very long time, perhaps forever. A series of little goofs? Probably depends on my mood or blood alcohol level at the time. The amount of single malt in my system directly correlates to my level of patience. (More scotch = more patience.) Now, George ... baby wipes? Do I congratulate you for a new grandchild, or offer my condolences on a later-in-life "oops!"?

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

Target has a nasty habit of repeatedly shooting itself in the foot. George does an excellent job of detailing a number of the problems that the store's customers have encountered. Other retailers can learn from these missteps.

If a retailer commits a big error it can drive shoppers away, but it's the constant parade of small mistakes that are most likely to erode confidence. When mistakes happen, own up to them and immediately make things right. Consumers understand that no one is perfect. Fixing the problem will often repair the relationship.

Don't play games with consumer loyalty. George is rightfully frustrated with receiving less than 10 percent discount he was expecting. Explaining upfront how the discount would be calculated could have avoided creating disappointment.

Transparency, walking the talk and an apology will often go a long way to heal a rift. A little discount which says "we're sorry" doesn't hurt.

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Max Goldberg, President, Max Goldberg & Associates

Lots of little issues over time diminish a brand and can/will eventually lead to customers looking to shop elsewhere. Target's clearly been struggling as of late and the math example provided above, while defensible from Target's perspective, was hopefully clarified further somewhere on their website, because if not, it shows that lack of attention to detail that can impair a retailer's goodwill with its customers.

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Bill Davis, Director, MB&G Consulting

Consumers generally change their patterns NOT in response to problems, but in response to the retailer's response to that problem. Great, empathetic, authentic customer service will get consumers over most problems. Cold, uncaring "by the book" customer service will lose a customer even with a little problem.

As in much of retail, customer experience is the "do or die" of retention.

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Mark Price, Managing Partner, LiftPoint Consulting, Inc.

Most shoppers usually react to one big problem and "ban for life" the establishment. In the one big incident it is up to the retailer to try and make lemonade out of lemons and over-deliver on the recovery of the customer for that one incident. Whether it is the breach with the 10 percent apology or individual store recovery efforts, that goes a long way to re-instill confidence with the consumer.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Big problems are obvious and easy to fix. Typically they don't happen often and when a customer brings it to the attention of the retailer, and the retailer resolves the problem, that positive experience restores the customer's confidence. In some cases, the confidence is restored to an even higher level as if the problem never happened.

However, the little problems that eat away at customers are where the real issue may be for the retailer. The customer may or may not complain, but if there are a series of mistakes, problems or mishaps, they will erode customer confidence, which will eventually diminish any loyalty they might have.

Retailers need to listen for problems. Ask customers about their experience. Look for opportunities to fix things before they leave the store—or immediately if they make contact after the sale, onsite or online.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

IMHO I believe most people will forgive the small issues as examples of "stuff happens." However, if it something big occurs then their memory of the incident is less likely to fade over time. The issue is, what is small for some people may be big for others and vice versa.

As David points out, customers identify with a store and may see themselves as a person  who always shops at retailer X. They did not form that relationship overnight and will not likely quickly change. Certainly they are more forgiving of "their" store than they would be of another.

The question of how many strikes it would take for me to change stores would definitely depend on what the strikes were.

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Steve Montgomery, President, b2b Solutions, LLC

There is so much attention being paid on price these days that it supersedes everything else in the consumers' minds. Let's review. You received: 1. a new online subscription service that wasn't available before. Good. 2. Free shipping. Good. 3. A new product you wanted. Good. 4. Saved $5.65. Good. 5. Missed out on $0.14 you think you should have had. BAD, VERY, VERY BAD!!!!!!!! Really????

'geohans'

This is a not a mutually exclusive proposition. It depends on the type of retailer and consumer expectations.

An occasional small incident doesn't typically bother me, but a consistent pattern would turn me away from any retailer. When such a pattern emerges, it is a good indicator that that store is in trouble. Where I live there are too many alternatives to put up with shoddy management. If you live in an area with few options, you may be stuck.

I still shop at Target, even after I had to have my debit card replaced as a result of the data breach. They remain conveniently located, provide competitive prices for household staples, and are generally quick to check out.

On the other hand, I bought a very expensive blouse from a designer boutique. Part of the sales pitch was about the exquisite quality of the cloth and fabrication exceeding what I could buy elsewhere. Two buttons popped off after wearing the blouse only twice. Even though the in store experience was wonderful, the promise of high quality was broken and my trust lost. Blouses I've bought elsewhere for a fraction of the cost have not lost buttons even after being worn for years. I won't shop there again.

'RetailRetell'

My answer is "Depends." I think it depends specifically on what that big problem is; or specifically what that series of smaller incidents is. If it ruins your shopping pleasure, you're gonna forget it and shop elsewhere. If you've been loyal (and the retailer has been reasonably "loyal" to you, so to speak), you're going to continue because there's something you like about the retailer's merchandise, prices, atmosphere, convenience, etc.

Retailers have been reeling from assaults from all directions—internet, economy, omnichannel, Amazon, global competition, etc. I think Target, like other store retailers, can right their boats and stay afloat.

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Naomi K. Shapiro, Strategic Market Communications, Upstream Commerce

Brand loyalty includes the concept of forgiveness. Will you forgive one mistake or a series of smaller ones? It depends on how much you love that retailer and how bad the series of mistakes is.

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Joel Rubinson, President, Rubinson Partners, Inc.

This wasn't an addition problem, it was a multiplication one (and George will miss a great teaching opportunity if he doesn't use it to demonstrate the value of compounding!)

Where were we? Yes, forgiveness; I think most people use a point system—sort of like the DMV: big mistakes get lots of (negative) points, lesser problems, fewer ones; the points add up over short intervals of time, but are forgiven over longer periods. What Target needs to do is stop getting a moving violation every few months. Or to put it in "retailese," they need to pay more attention and execute better. I think for a long time they prospered—then eventually "just got by"—on cleverness and rapid growth, but now they need to work more on being a good store, not just a fun one (and of course stop calling customers "guests").

'notcom'

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