Switch Hack

Another day, another gloomy profit announcement from the High Street.  This time it’s electrical retailer DSG, the company behind Currys, Dixons and PC World, which said its profits were down a third from last year, to £205 million.  Admitting what us customers have known all along, DSG’s Chief Executive John Browett highlighted that customer service in its stores was often poor, and this was one of the reasons for falling profits.  Pledging his commitment to reviving fortunes at the company, Browett has promised a fresh new look for stores and a crack down on poor service levels.  Not everyone is convinced (the City for one) but does the success of the retail industry really rest on customer service and will attentive staff with exemplary product knowledge really pull the industry out of the crisis it has found itself in?

 When there is a consumer boom you can get away with poor service, but in a downturn the customer is much more discerning and every pound spent is precious to them – they want to know they are getting value for money and this simply isn’t happening at DSG’s outlets.  Take Dixons for example.  You would be very hard pushed to find anyone who had more than a superficial knowledge of the products and you certainly wouldn’t walk out proclaiming the virtues of the retailer.  Now difficult trading conditions are upon us and there is little customer loyalty and no service differentiators for Dixons. Our research on advocacy and profitability shows quite clearly if you have low advocacy then poor profitability will follow and what’s more this effect is only exacerbated in a downturn.

 We can only take it as a positive sign that DSG’s new Chief Executive is going to concentrate on providing a new and improved direction of service.  But he must acknowledge that customer service is not something you can turn around over night. You can’t simply install ‘custserve V2.0’, push a button and walk away.  Browett must go back to basics and understand his customer and their expectations.  We don’t have time to trek down to the High Street every time we want to enquire about a new product and the retail industry must respond by re-focusing its attention on multi-channel, personal communication with the same level of high service across all touchpoints. 

We are of course still some way from an official recession, but it is commonly accepted that a country of consumers can spend their way out of a tough economic period.  Browett has a difficult task ahead if he is to hold on to his customer base and encourage them to part with their cash, but he is heading in the right direction and where better place to start than by teaching his shop assistants some basic manners.