How Modern Retailers Drive Customer Loyalty
Building Retail Customer Loyalty through Home Service
The retail landscape has changed fundamentally over the past 20 years. The Internet gave rise to eCommerce, allowing giants like Amazon to offer a wider selection of products than brick and mortar retailers at lower prices, delivered right to your door.
Experts expected this new level of choice and convenience to slowly kill off retail stores, but that simply didn’t happen. As a matter of fact, the National Retail Federation says brick and mortar retail has been growing at roughly 4% per year since 2010, with eCommerce sales only accounting for 10% of all retail sales across the industry.
No, brick and mortar retail didn’t die when threatened by the Amazons of the world – but it did evolve.
Give the people what they need
Recognizing this threat, consumer electronics retailer Best Buy reconsidered what would keep people coming through their doors. You can buy a new laptop anywhere, but what happens when that laptop breaks? Best Buy knew that excellent service experiences are what built customer loyalty, and made the savvy move of acquiring Geek Squad in 2002.
The concept was simple – we know that we are going to lose sales to Amazon. We know people can buy a new laptop anywhere, including from the comfort of their own home. But what happens when that laptop breaks?
Nearly 20 years later, Geek Squad has become synonymous with computer repair. Representing a modest but not insignificant 5% of their overall revenue, the real value of Geek Squad comes from:
- Expanding their business beyond the products they sell,
- Getting people into the store who may end up buying something they weren’t planning on buying
- Creating additional opportunities for loyalty-building customer service experiences.
Suddenly, Best Buy could make some money off of products they didn’t sell in the first place. Completely new revenue; turning a negative into a positive.
Modern customer loyalty
Many stores have caught on to this, including Amazon, and now offer service, maintenance, and installation along with the products they sell. According to American Express, ‘U.S. consumers are willing to spend 17% more to do business with companies that deliver excellent service, up from 14% in 2014.’ So it stands to reason that adding service options to your product sales gives you more opportunity to build loyalty.
The need for service is clear, but how do you deliver it consistently to your customers, and not turn your great opportunity to build loyalty into another lost customer?
A declaration of independence
Today, retailers are turning to independent service providers to provide service to their customers. Whether you’re mounting a TV or installing an HVAC system, having the right service provider on deck to do a job is critical to adding significant service revenue to your bottom line.
In the absence of a fully trained and skilled workforce, you can offer your jobs to independent contractors. This is where Dispatch comes in.
Dispatch gives you a platform to onboard and manage your service providers, ensuring you have the coverage you need to earn service revenue and customer loyalty across the country. Of course, you need to make sure your providers are delivering consistently excellent service experiences to your customers if you hope to build loyalty, so a platform that allows you to control the customer experience and understand customer satisfaction is critical.
If you are a retailer that is looking for a way to take control of your service offering and ensure you are taking advantage of these critical loyalty-building opportunities, take a look at what Dispatch has to offer: