Question

many experts believe that customer service is one of retailers most important issues in the new millennium. How can retailers that emphasize low price ( such as discount stores,category specialists and off price retailers) improve customer service without increasing costs and thus prices?

Answer 1

The above statement is true. Service is the most important issue in the era. Product assortment to the store is easy as the companies offer their products to the company easily. It is not the company headache. The retailers get the stocks easily but the issue is the delivery of the service. Low cost is again a very important because retail industry is very competitive.

Reducing the cost will increase the margin, profitability. The comp0any can offer their product to the lower price and it will give a competitive advantage as well and can increase the promotions as well.

Here is some way to reduce the cost-

Economy of Scale- If there is many retail chain of a company then the company should buy its product at a huge volume. Large chains buy directly from company. Smaller companies or retailers can buy the products at a huge quantity from vendor. This will reduce the cost.

Procurement- the retailers should not buy the merchandise but they should procure it. Procurement means searching, identifying, analyzing different buyers and they selecting appropriate buyer and they buying. After buying maintaining a long term relationship is also a very important aspect of the procurement. It will reduce the cost.

Use of Technology- The technologies should be used such as SCM or inventory management SOFTWARES. As this will increases the flow of the merchandise and reduce the inventory, theft, damage, Shrinkage is the big issue in retail sector. Shrinkage means theft, damage, shop soil etc. It happens that the stocks gets damage or expired or old without notices the stock in warehouse.

Smooth customer Service- Customer Services motivates the employees to sell more. It means the sell will be higher and product flow with smooth. The product will not remain in the inventory and damage, shop soil etc will be lowered. It will lower the cost.

Training- Training cost to the company but if you compare it with the return then it is most beneficial for the companies. The trainer should train the employees about cross selling, upwelling and customer handling etc.

Following SOP- Each retail company ahs their operating procedures which is called Standard Operating Procedure. It describes the step by step how to handle a situation and execute a work. The SOP should be followed strictly.

These were some tips to reduce the cost and improve the quality of service.