Demonize Amazon? Nope! Study Them.
Americans have a great thirst for buying large quantities of things at the cheapest price possible. But, how is it that one business delivers on that desire and creates superior customer service while others view customers as a commodity for shareholder value? How does one company deliver value as talent shows up with enthusiasm while another has workers that view customers as an intrusion on their malaise? The answer, of course, lies in the organization’s leaders.
The business of retailing, like all categories, is facing wildly convulsive change. Quite a bit of ink has been spilled on the specter of Amazon taking over the world. And, while the press spends time looking at the dark ramifications of the company’s growth, little is said of why this is actually happening. When it comes to buying value, the only distinction in why people would go into a store rather than spending a few minutes on the computer is in the customer experience. And yet, the very organizations that are in the greatest deal of trouble are the ones that are so focused on short-term shareholder value, they cut expenses on the quality of their talent as well as the customer experience. The leaders of these organizations are bean-counting their businesses out of existence. In the end, the only way retailers will compete with Amazon is by providing a customer experience so faultless that people are willing to go across town to buy what they want.
Yesterday, after many years of loyalty, I ended my relationship with Walgreens. My customer experience deteriorated over time. I got used to long lines of people and staff members continually stressed out. I considered moving my business to the local CVS, but the disengagement of their workers is so bad that cashiers point to the self-service checkout kiosks instead of smiling, looking me in the eye, and demonstrating an interest in their job. So, I’m moving my business to a small pharmacy in the neighborhood and will pay the higher prices. Here’s why: In trying to deal with Walgreens over the course of one week, I lost four hours of my time. After making the decision to leave, I sent a note to Walgreens corporate. I only send notes in the spirit that a big store in our neighborhood influences the quality of our community. The store manager called. There was panic in her voice. She talked about how the most recent manager quit, they are short staffed in the pharmacy, she was offered the interim management position and would I be willing to come back? She offered a $20 gift card. I responded that when I added up lost time, my economic loss was several thousand dollars. I also pointed out that she wasn’t responsible, Their CEO Stefano Pessina is responsible for creating a culture where the customer and the employees take a back seat to short-term shareholder value.
Dan Banes is the CEO of Trader Joe’s where the average tenure of cashiers is eighteen years. At Trader Joe’s “team” isn’t an aimless marketing phrase. Their culture is so democratic that if a manager is the first person to walk a store, he or she scrubs the bathroom and the toilets. Dan shows up to the stores, just like his predecessor, and meets with the employees. He asks what they need and he listens. The company delivers value with a smile. Recently, I lost a pair of sunglasses at Trader Joe’s and they called by the time I got home. In thanking them, the assistant manager said it was his pleasure to do anything to make my day a little better and he thanked me for our loyalty.
The advancement of technology is leading us to a common-sense outcome. If our retailers are producing customer care workers who don’t look us in the eye, are waiting for the moment to leave, who feel they are not valued, leaders are perpetuating the day where customers will only interact with machines. Let us be clear. The tragedy isn’t Amazon, it is the failure in leadership of organizations who cynically believe that customers will tolerate abuse in order to get a deal. But, that thinking is dreadfully impacting large categories of workers that need an intervention, that could be awakened. Instead, these CEOs perpetuate a trance. As for the shareholders, the premium customers of these organizations left a long time ago.
Perhaps it is time for the shareholders of United Airlines, Walgreens, CVS, Spectrum, and Wells Fargo to recognize that customer experience will always trump cutting expenses. Their awakening could be the realization that loving the customer requires loving their employees. The empty complaints about Amazon always miss the fact that the nation’s biggest retailer now employs over 542,000 people.
Here are the words directly from their career website:
“Leaders start with the customer and They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers. Leaders are owners. They think long term and don’t sacrifice long-term value for short-term gain. They act on behalf of the entire company, beyond just their own team. They never say ‘that’s not my job.'”
Even some of the most hallowed names in retailing ought to be learning from the leaders of these growing enterprises. For example, the Nordstrom family recently sold its stock in their namesake. While this was happening, I went to a local Nordstrom’s to buy a suit. It had to be wonderful. I found an item that I loved. They only had one size. But, they offered to bring the said item from another store in order to buy the suit at full price. We spent two hours getting to the store, parking, searching and attempting to make a purchase. This “just in time” inventory outlook upended another once sacred relationship. When we got home, I went online to my beloved Gilt.com, originators of the online flash sale for luxury items. There, I got the same suit at half-price in my size and it was delivered to my door in four days.
Gilt’s CEO is a gentleman named Kevin Ryan. In reviewing his leadership of Gilt, I realized he meets the very definition of “What is An Engagement CEO” from my book, The Workplace Engagement Solution. In a recent interview, Mr. Ryan stated that “the CEO’s most important job is managing talent.”
Perhaps rather than hurling contempt and cynicism towards the CEOs of these new category leaders, we ought to be studying them, appreciating them and learning how to bring obsolete thinking into the new millennium.
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