Erik Nordstrom likes to boast about his employees going the extra mile at the upscale U.S. retailer that bears his name.
Recently, the great-grandson of the founder of Nordstrom Inc. told the story of a maintenance staff worker who discovered a Nordstrom shopping bag filled with $800 worth of goods in the parking lot of a Farmington, Conn., store.
Flight information in the package helped the employee identify the customer, whom he dialled three times.
She failed to pick up because, she said later, she didn’t recognize the number on her mobile’s call display. Realizing her flight was leaving soon, he drove 200 kilometres – two hours – to John F. Kennedy Airport in New York, and after having her paged at the airport, triumphantly handed her the bag.
She offered him money for gas, but he refused.
“We don’t nail it all the time, by any means, but we’re fortunate to have some really terrific people in this company who care a lot … about their customers,” Mr. Nordstrom, the company’s president of stores, told the retailer’s annual meeting in May.
Ranked as a top U.S. luxury retailer for luring back shoppers with courteous and knowledgeable staff, Nordstrom may have reason to brag. And as it prepares to bring its stores to Canada, it may also give Canadian retailers a reason to rethink how they do things.
Nordstrom’s arrival threatens to shake up a retail market known for a more passive approach to helping shoppers. It plans to open four stores here in the next several years – in Vancouver, Calgary, Ottawa and Toronto, according to industry sources – and could raise Canadian shoppers’ expectations and force rivals to pump up their customer service or risk suffering losses.
“Retailing in these cities and across Canada will change after Nordstrom comes to town,” predicted Robert Spector, a retail consultant in Seattle, where the retailer is based, and author of The Nordstrom Way to Customer Service Excellence. “Trust me on this, I’ve seen it happen everywhere in the country” where Nordstrom has launched new U.S. stores.
Domestic retailers will have to pay heed to Nordstrom. Its department-store competitors, including the Bay, Holt Renfrew, Sears and Quebec-based Simons, failed to rank among the top 20 retailers in a customer-experience survey that looked at such things as staff courtesy and competency. It was conducted late last year in Ontario and Quebec by Leger Marketing.
The Bay scored 97th out of 104 chains in Ontario and 102nd out of 113 in Quebec; Sears was 72nd in Ontario and 78th in Quebec. Holt fared better, at 24th in Ontario and 25th in Quebec. Simons, which runs stores only in Quebec (although it is soon expanding beyond that province) came in 46th.
In contrast, Nordstrom emerged as the top purveyor of a quality experience for customers among eight leading U.S. luxury retailers, according to a recent study by Luxury Institute, a New York consultancy.
In Canada, retailers will feel the heat to find the right balance between welcoming customers but not scaring them away with a high-pressure pitch, industry experts said. Customers here may be caught off guard by getting too much attention. And in the digital age, shoppers – especially younger ones – may prefer to turn to their smartphones for information rather than a store clerk.
Even so, domestic retailers are taking steps to improve their customer service, including running more surveys; hiring “mystery shoppers” to monitor the performance of staff; providing customized services to top customers; and trying to reshape hiring policies and employee training.
The Bay now searches for “fashionistas” – even ones with tattoos – to hire as sales people, while Sears relaxed its return policy and boosted staff training this spring. Holt Renfrew is training its commissioned sales staff to be adept at selling goods in more than one department.
“We’re encouraging our sales people to move through the store to meet more people,” said Alix Box, senior vice-president of sales and marketing at Holt. “That creates a more welcoming environment … Obviously there is always room for improvement.”
Bonnie Brooks, president of the Bay, arrived at the chain in the fall of 2008 when it was “perceived as having no staff visible on the selling floor” even though 12 to 13 per cent of sales were spent on store payroll, she said recently. She moved many backroom employees into the store and urged them to act more like specialty-store staff who greet shoppers and find out what they want. “We had to change our approach.”
For all the emphasis on customer service at Nordstrom, it has an employee handbook that consists of just a single sheet of paper, said spokeswoman Brooke White. It welcomes staff to Nordstrom and, on the other side, says, “Use your best judgment.”
Nordstrom’s approach is to provide a no-restrictions returns policy and train staff to act as entrepreneurs, keeping in touch with customers and suggesting future purchases, said spokeswoman Brooke White. Employees are taught to use a computerized “personal book” for keeping customer records on favourite brands and styles, anniversaries and birthdays. Their pay consists of commissions ranging from 6.75 per cent to 13 per cent of their sales or a base salary, whichever is higher, Ms. White said.
“A Nordstrom executive once said to me, ‘It’s not that we’re so good; it’s that everyone else is so bad,’ ” Mr. Spector said.
Retailers such as Holt and premium mens clothier Harry Rosen (which was not ranked in the Leger survey) have adopted their own versions of the Nordstrom playbook, including staff record-keeping to keep tabs on their best customers.
And they’re trying to focus more on pampering their customers. This spring, for example, Holt flew one of its top customers in Vancouver along with her Holt “personal shopper” to Los Angeles to view a new line of jewellery, resulting in the customer making a “noteworthy” purchase, Ms. Box said. “We’re doing more of that – it’s more customized to [each] customer.”
To monitor customer response, Holt recently launched a more beefed up, standardized customer-service survey, now tracking 4,000 customers a month rather than the previous 800 monthly, she said. And it has introduced other touches, such as serving lemonade at the downtown Toronto flagship store during this hot summer.
Still, Karl Moore, a professor at the Desautels Faculty of Management at McGill University, thinks Holt can do better. Over the years, he has sent hundreds of his students to check out service at Holt, only to find that the 20-somethings often are simply ignored by staff.
Holt is missing an opportunity, he said. “They clearly suss out that the students are not the target market. But most of them will have the money to eventually shop there.”