Nordstrom Tinkers with Customer Service
By George Anderson
When it comes to delivering excellent customer service in the retailing business, there are few that stack up against Nordstrom. So, why then has the company decided to do away with the customer service department at its store in Spokane’s River Park Square mall? To improve customer service, of course.
According to a report in the Puget Sound Business Journal, Nordstrom is closing the customer service department in favor of letting shoppers make returns at any checkout located within the store.
Deniz Anders, a Nordstrom company spokesperson, said the company was testing the new initiative because, “we’re always looking for a way to enhance service.”
The idea for the test came from regional and store managers. The company will determine the success of the new effort, said Ms. Anders, from customer feedback, which will be communicated by managers to executives at Nordstrom’s corporate headquarters.
Moderator’s Comment: What is your reaction to Nordstrom testing a new approach to handling its customer service functions?–
George Anderson – Moderator
Hard to quibble with this one. Saving shoppers the trek to the customer service desk (typically located at the rear of the fourth floor behind the rest rooms and the elevator bank) is in itself a service improvement. Certainly floor employees at Nordstrom are capable of assisting with returns, adjustments, credit card applications and similar routine matters. Why not go a step further and install a “concierge” desk inside each store’s main entrance or near the main escalator, where packages may be checked, salespeople paged, and directions obtained?
I’m more in favor of a drive-through return/exchange service. First you’d stop at the menu board, where you scope out the various options available – including return for credit, exchange for same item, exchange for different item plus credit or extra charge, deep-tissue massage, or bikini wax (with or without cheese).
Next you’d stop at the order pylon where you shout your intentions out your car window after listening to barely understandable audio directions from a rain-corroded speaker system. Talk to the clown. At this point you are asked if your conveyance has a sunroof, in case you choose to hook-shot your return item into the handy bin provided for that service. Sunroofs also facilitate bikini waxes.
Your third stop is for what the return/exchange community used to call “paperwork,” in their unique, precise, and descriptive vernacular. Instead, you’d spit into a conveniently provided paper cup and pass it through the handy window for DNA certification, and then stare into a low wattage laser beam for retinal documentation and verification. All necessary fiduciary information is transmitted at this drive-through station.
Finally, your fourth stop is for exchanges and bikini waxes. Customers seeking refunds can skip this window, since their requests will be handled electronically. All refunds will be transferred via wire to their Ophthalmologist or registered Optician, who possess their private optical scan information. Customers with perfect eyesight – thus no professional optical care – are out of luck and, frankly, should have seen this one coming.
Next stop, Burger Barn!
The successful implementation of this kind of change hinges on training and execution at the operational and customer interface levels.
Training includes the critical issue of keeping the sales person who is processing the return aware of what’s going on behind the customer with the problem, then training them to proactively address the customer(s) who has been forced to wait with timelines or alternative solutions/locations to consummate their purchase. Store associates tend to keep their heads down and focused on issues at hand, rather keeping their heads up and aware of the big picture. They rarely tend to be verbal and informative enough even with the person they’re serving.
Staffing execution should allow for additional help in the department who can be called to a second POS to move the line.
Customer education execution, including signs and awareness of every associate who can be proactive in informing “lost” consumers who are looking for the “old” way of being serviced. And it must be clear to the consumer why this change benefits them above and beyond the “comfortable” way.
Cash management execution, including having sufficient cash on hand to deliver refunds at all department registers.
Intuitvely, placing the return transaction in the relevant departmental setting allows a trained sales person to convert the return to a new sale, to offer information and alternatives, and to save the customer if not the sale. These benefits go directly to the business. It is convenient for the consumer who theoretically at least may avail themselves of the closest free cashier for help. Although it may lessen the potential of converting the return to an alternative sale if not handled in the department from which purchased.
Major caveats? It is exponentially more difficult to train associates in 20 departments with 2-3 shifts to be expert at handling a “problem” consumer at such a critical time than to have a relatively tight group of CS associates lead by a CSM who is accountable for that function. And what do you do Dec. 26, when a natural conflict arises, as the busiest return period runs headfirst into what has become a top revenue week?
Nordstrom has an A-1 idea on appropriate returns providing they continue to emphasize getting all sales “as right as possible” the first time. This is another thoughtful move by Nordstrom.
I could argue with the naysayers on this one, but I won’t. Its a clear positive move by Nordstrom’s. It hard to second guess the best as if they even could be second guessed. This clearly empowers their staff in all areas to fully satisfy their customers, which is their primary goal. Leaders innovate. This is Nordstrom.
The Nordstrom plan opens up a lot of questions. From a customer perspective, I see the advantage of not having to seek out a separate department for returns or a disappointing purchase. The only downside is that it might be embarrassing for some customers to deal with the same sales person that sold them an item. And you always have the “unsatisfiable customer” who will now be on the main floor. This also opens up a real QA issue for the customer service area. The sales people are paid on commission. Returned merchandise comes off of their paycheck. This creates a real quandary for the department head who might have to book a large return. It seems there will still need to be an “arbitration process” that allows customers seek further redress if they are not satisfied at the department level.
Nordstrom has recently made a big investment in their IT capability and I am sure has considerable data on the reasons customers are calling on the customer service department. The information they have been able to extract from that data has probably helped them in this decision. By making that information available on the sales floor they can give the department head a clear picture of the type of customer they are dealing with and help with the resolution process. In that respect, this is just another example of how IT is “flattening” the business organizations. It will be interesting to watch.
This will create long customer care lines at the check out. All too often I’ve noticed customers leaving their product filled shopping cart or packages on a display next to the checkout register and departing the store. The checkout experience is often faster than return exchange transactions.
Any discussion of customer service at Nordstrom must also include the recognition of the people working in their stores. As many of the consultants who have commented on this topic have stated, Nordstrom has legendary customer service, but the reputation for great service is the result of how Nordstrom associates interact with customers every day.
As a long-time Nordstrom customer and a consultant I’ve found that Nordstrom associates are among the best in all of retailing. Closing the customer service department in one of the company’s stores just puts this important activity in the hands of the people who are most qualified and capable of handling this activity.
As Nordstrom’s sterling reputation for great customer service continues to drive the company’s growth I wonder if and when other retailers who compete with them will get the message!
I won’t buy anything at Best Buy because their customer service is so poor that it makes police interrogation look like friendly banter.
Conversely I’ll buy anything from Nordstrom because I know they’ll courteously refund my money no matter what the problem.
The only issue I have with Nordstom’s change is that their customer service desk was so good to begin with that it’s almost impossible to improve upon it.
As an aging ‘Baby Boomer,’ customer service is one of the single most important criteria I use in determining who I want to do business with-more important even than price.
I have several concerns about this plan. Ever gone into a big box store and seen the line of unhappy customers standing at the return desk which is right inside the entrance? Makes you want to turn around and leave the store without buying a thing. Making the return effort too visible only blurs the lines between the illusion that everything the store sells is great, and you still stand a chance of being unhappy with a purchase here.
However, in the department store business, returns desks are often planned for the least accessible, hard to find areas, right next to the bathrooms. Making a customer service location more visible from afar, and duplicating them on each store might be a more subtle and customer friendly move. But I do applaud Nordstrom for trying.
It’s a good thing! My local Macy’s takes returns or exchanges at any POS area in the store, and it works very well. Associates are able to do the return or exchange without a manager, which means no waiting for the customer. I have always had a positive experience with any returns at Macy’s and feel that it is a positive step for Nordstrom to do the same, with only great results!
The department store that I work for allows returns at individual registers currently. It is a fairly successful program. It allows for a higher percentage of exchanges versus returns, keeping the money in the store; it also allows for greater ease in returns for the customer who doesn’t need to search out the customer service area. It can, however, lead to a few problem areas. Salespeople who receive a commission on an item certainly aren’t thrilled to see it returned. They need to be trained that returns are merely a cost of doing business. It is unrealistic to believe if 20 people buy a widget, that 20 people are going to love that widget. Returns are inevitable. You also have a problem when someone wants to return a doohickey to the widget department because it is closer to the entrance. If the customer had a receipt and a ticket for the doohickey, the return is no problem. If they don’t, you still need to send them to the doohickey department for that return. You can’t expect every salesperson to know all the information about every item in a store. Overall, I don’t see doing returns at a sales register as a problem; it really doesn’t increase waiting time in most circumstances, it is easier for the customer, and with a much better chance for an exchange allows the store to keep more money in the store.
The mark of a true leader and a great company is not being afraid to try new things to improve and enhance. Nordstrom has become the paragon of customer service and the envy of all, because they don’t accept the status quo. Nordstrom not only talks about customer service, but they actually under-promise and over deliver!
Other retailers should take a lesson from Nordstrom’s playbook. While it is not easy and there are associated costs, in the long run, it is well worth the time, effort and costs.
Today, we heard that retail sales at clothing stores were down 3.3% in February; yet Nordstrom was up 4.9% in February. Anomaly, coincidence or a result of something else? I think we can all figure out that the reason and something to do with their exceptional customer service.
Hmmm, maybe Nordstrom IS doing something right! Wake up, retail!
Nordstrom, the world’s leading high-end shoe store is again looking to improve it’s world-class customer service. It seems that their goal is to improve the shopping (and returning) experience of their customers, not (necessarily) to reduce costs of operations. Encouraging each sales representative to have a stronger relationship with their customer is what made Nordstrom famous, and it looks like the company is upping the ante on their competitors yet again.
Customer service centers have usually been painted as impersonal, not interested in the customer, and mired in rules and regulations. Nordstrom is trying to change this perception in the minds of their employees, customers and prospective customers.
Love it! Customer service isn’t a department or a desk, but rather it is the actions a retailer takes while interacting with a customer. Moving all returns to the floor does a few things. First and foremost, it gives the retailer an opportunity to better serve the customer by conducting the return around other products that might better meet the customer’s needs. Obviously the advantage for the retailer is that it improves the odds that the return can be turned into an exchange rather than a refund.
The sad fact is though that many retailers can’t offer this level of service because they don’t empower or trust their employees enough. Nothing frustrates me more than when making an exchange or a return, the employee isn’t empowered to handle it. I always dread when I’m told we’ll have to wait for the “manager on duty.” With today’s technology, there is no reason employees can’t handle returns and exchanges.
Anyone can be gracious and accommodating when they’re taking your money, but the true test is how they act when you’re asking for the money back. I respect and appreciate any retailer who trusts and trains their employees on how to handle returns as well as they do in handling the sale. This is just another example of how Nordstrom gets it.
It’s likely to be successful if (1) shrink doesn’t rise and (2) cashier lines don’t get longer. Some retailers have such a slow return process that implementing this would anger the customers waiting behind the person making a return. When combined with the excessive staff turnover at many retailers, the need for return process training can make this type of implementation difficult. In other words, if your cashier turnover is 75% a year, and your returns process isn’t intuitively obvious, this won’t be a winner.
The beauty of this approach is that it allows the associate handling the return to actually resolve the core problem. Instead of simply processing a refund or return, this allows Nordstrom to assist the customer in the resolution. My guess is this will have a significant impact on refunds, converting a large number of them to alternate purchases. Further, the information about “why” the return is made will be invaluable to Nordstrom in general. Knowing the organization, I am confident that an extremely important aspect of quality — consumer feedback — will now flow more effectively to the buying staff. Nordstrom has always had a completely open channel of communication between the floor and the buying offices.
Imagine: A customer returns an outfit, and the person handling the return actually knows enough about the merchandise to ask good questions, and determine what would really fulfill the customer’s needs…I love this.
Speaking as a consumer, I have to say I don’t understand how moving the returns transaction to the regular sales floor improves customer service. As a purchaser, I don’t want to be stuck in line behind someone making a return. It seems like having a separate allocated area for returns benefits everyone. The person making the return or exchange won’t have to wait in the line of people checking out their purchases; they go to a dedicated returns area and most likely receive immediate service.
I guess I’m not understanding what is so innovative about this approach. As others have mentioned, a number of department stores have been doing this for a long time. It is definitely a plus for customers who are returning an item and also plan to make a purchase, only one line to stand in. There’s also a better chance of turning a return into an exchange or, better yet, a trade up, because the merchandise is right there. This is especially true when you have associates the caliber of Nordstrom…seems like a no-brainer to me.
I went with the “failure” option on the this one – though, as always, “not sure” sums up the extent of my certainty: I usually associate customer service desks w/various peripheral functions (gift certificates, general queries, etc.), and I seek them out when I’m not sure who I should be asking…. I think this will only work if customers understand that EVERY counter is supposed to be a customer service counter, and even then, I’m not sure.
A little surprised this leading retailer in consumer service is taking a giant step in this endeavor.
Nordstrom has been known to test in increments that lead to a finalization, if you will; like having no customer service department.
Needless to say, this store’s personnel and management are the best in the chain, in terms of handling consumer needs and issues, etc. Hope this retailer researched this proposition with the store’s shoppers. Hmmmmmmmmm