Nordstrom Raises The Customer Service Bar in Canada: Discussion

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Based on Target‘s experience, it might be tempting to believe that American retailers just don’t speak the same language(s) as Canadian consumers. But Nordstrom is proving American stores that Canadians like to shop when visiting the U.S. can also translate when moving north of the border. In fact, early reviews of Nordstrom’s entry into the Canadian market suggest the department store chain is putting pressure on local stores to up their customer service levels.

“Over the past few years, Calgarians have become so accustomed to lackadaisical customer service that even the simplest elements of client care are almost mind-boggling for us now,” wrote Meghan Jessiman in an excellent piece on the Calgary Herald site. “It sounds absurd, but the fact that I could actually find a sales associate at Nordstrom when I needed one and, beyond that, the lovely woman actually wanted to help me, automatically improved my shopping experience.”

Canadians’ desire for the Nordstrom experience was evident at the launch of the chain’s first store in Calgary. More than 2,000 customers were lined up outside the store’s doors waiting for it to open.

The biggest challenge for Nordstrom going forward in Calgary will be staffing its stores. With many employed in well-paying jobs in the gas and oil-rich region, it can be difficult to find the right people for customer-facing positions. So far, however, that has not been a problem based on the Herald’s reporting.

Nordstrom, which plans to open five stores in Toronto, Vancouver and Ottawa in addition to Calgary, will join in the intensifying competition for luxury consumers in Canada. The chain will go up against Holt Renfrew and Saks Fifth Avenue, another American import brought to Canada by Hudson’s Bay Company.

Nordstrom has learned one clear lesson from Target’s experience. Eric Nordstrom, who runs Nordstrom Direct, told CTV News, “What we heard mostly from customers here: ‘yeah, we’d be excited about Nordstrom here but it needs to be a great Nordstrom. Don’t bring us Nordstrom lite.'”

DISCUSSION QUESTIONS:

Will Nordstrom’s presence in Canada raise customer service levels among its competitors in that country? How is it that Nordstrom appears to achieve service excellence pretty much across the board when others serving similar customers do not?

Kevin Graff, President, Graff Retail: Being from the “Great White North,” I can tell you there is a real sense of excitement about Nordstrom’s arrival here. Not just for what they’ll bring to the market, but because of their potential impact on the competition. What we all hope to see is a dramatic improvement in the real service provided in other stores. The reality is that product has become a commodity, leaving the shopping experience as the real game changer. That’s where Nordstrom excels, and where others need to pick up their game. 

Staff performance in other high-end stores here is, quite frankly, awful more often than not. Somehow these other high-end luxury stores seem to think the product and pretty displays are all that’s needed to make a sale. As a result they leave literally thousands of dollars on the table every day in lost sales.

With Nordstrom arriving, these other luxury retailers will have no choice but to pick up their service games.

*Don Uselmann, SVP Director of Stores, Florida and NY, Ex Saks Fifth Avenue: In today’s ever-shrinking world everyone needs to up their service levels in order to thrive, perhaps just to survive. Not only has the internet given the customer more options, but as the Canadian invasion by U.S. retailers continues one of the significant differentiators will be service. 

An underlying challenge for stores like Saks, and to some degree Nordstrom, will be product matrix. Saks in particular needs to offer brands such as LV, Chanel, Prada, Gucci, et. al., to generate sufficient volume to adequately staff their stores and provide superior levels of service. Not only quantity of staff, but also quality, as such high-end (high-priced) products can generate significant income for sales associates. The question is: Do those brands believe the Canadian market is robust enough to open additional points of distribution? And if yes, will they open in Saks or choose to open their own boutiques? If the answer is no then you will have a Saks lite—good fashion, good service, but not great. Nordstrom will succeed because they don’t rely as much on top-end product—they are approachable by a very broad market segment and layer on top of that a democratic customer experience that in stores like Saks, Holt and Neiman Marcus is often only well executed for top-tier customers

*J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.: Nordstrom very well could raise the levels of service in Canada, but mostly within the retailers serving the Nordstrom customer demographic. Mid-level and low-price retailers may strive to improve but usually their focus is on other areas. Nordstrom has a great recruiting, selection and training model that is difficult for others to emulate.

*Marge Laney, President, Alert Technologies, Inc.: The success of Nordstrom in Canada, and anywhere for that matter, isn’t luck. Nordstrom leadership understands that they’re in the business of selling apparel and that the fitting room is ground zero for conversion.

They have well-trained and engaged staff that are available on the sales floor and gently move the customer into the fitting room where they kick up the engagement and help the customer make their buying decision.

The stories about Nordstrom associates’ herculean customer service make for great retail folklore, but it’s the day-in and day-out service focus and success with every customer that makes them great.

*Dan Frechtling, Vice President, Global Product Management, hibu, PLC: Nordstrom has the momentum advantage. It’s easier to start with a halo effect from the US than rebound from losses, as in the case of Holt Renfrew. The stampede of shoppers lined up before the opening of Nordstrom Calgary shows pent-up demand for change.

Nordstrom also has a cultural advantage—not being American, but its service. Rule number one is: “Use your good judgment in all situations. There will be no additional rules.” Meanwhile, Holt tries to match the superficial elements like on-site restaurants and cafes by adding pop-up food counters—and spending $300 million to add square footage.

Competitors might look to invest in employees instead. Nordstrom employees surveyed on Glassdoor are happier than their peers. Satisfaction ratings on Glassdoor are a full point higher for Nordstrom than Holts or Hudson’s Bay. Fully 70 percent of Nordstrom employees would recommend the company to a friend, compared to 24 percent at Holts and 44 percent at Hudson’s Bay.

*Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC: A Nordstrom presence raises the bar for customer service anywhere they go. They have the ability to deliver a high level of service that is consistent and predictable. They are a customer service role model that many retailers aspire to.

How do they do it? Simply put, they hire the right people. These people come to the store with certain skills and core values that align with Nordstrom’s core values. Then they train them to take what they already understand and make it work within the Nordstrom system. They won’t take a chance on eroding their culture and brand with people who don’t fit in.

*****

Through a special arrangement, presented above is the discussion from an article originally published on RetailWire. Read the entire RetailWire discussion herehttp://www.retailwire.com/discussion/17840/nordstrom-raises-the-customer-service-bar-in-canada

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