A closer look at a Tunnell Consulting effort
Creating a Nordstrom Effect
in a Grocery Store
Everyone knows that Nordstrom
provides the quintessential service to its customers -- just try returning
a pair of honestly worn shoes, a suit that makes you look like Elmer
Fudd, or socks that ripped a year after you bought them. Try it, and
you'll do it, without fuss, fighting, or the original sales receipt.
But grocers wouldn't want their customers returning half-eaten food
just because they didn't like it, would they? Or returning food that's
gone stale six months after purchase?
Or would they? The answer is they probably would, if such a policy
could retain the customer in question, and the estimated $5,000
a year he/she contributes to keep the business alive.
In grocery-store terms, a Nordstrom-style store would be a clean,
cheerful environment with well-trained, friendly staff, fully stocked
shelves, great variety, artistically-prepared home meals, and reasonable
prices. In this era of sweeping mergers and acquisitions, fierce
price wars, huge, modern supercenters, and prepared food sections
that double as restaurants -- it's not overreacting to say winners
in the race for the fickle food dollar need Nordstrom-style solutions.
Tunnell Project Manager David Lasater had this reality in mind
when we began a combined quality and supply chain effort for a major
grocer in the South, one of a number of similar projects Tunnell
Consulting has undertaken. This large grocery chain knew that to
keep the customer happy, it needed remedial efforts on a number
of fronts; it asked us to identify and evaluate key culprits, train
employees in problem-solving tools, and assist continuous improvement
efforts in retail and distribution operations.
"Our evaluation" says Lasater, "turned up key weaknesses in management/employee
relations that showed up in high turnover, absenteeism, and of course
low morale leading to poor customer service. We also found significant
weaknesses in the distribution of goods to stores, and the delivery
of goods from vendors to the distribution center -- the kind of
stuff that people can easily solve if the right systems are in place."
Tunnell Consulting followed its evaluation by recommending and
implementing direct improvements, and by inaugurating problem-solving
teams both at the distribution center and in company stores. In-store
teams focused on issues that would send a customer elsewhere --
things such as inaccurate pricing, poor staff knowledge of products,
unsatisfactory customer complaint procedures, and low product variety.
In a matter of months, significant results were reported:
No one doubts the supermarket industry has been having a rough
time. Extreme price competition and low profit margins have been
exacerbated by declining population growth and higher labor costs
as the result of a higher minimum wage. It also hasn't helped that
general merchandisers have entered the food trade, giving customers
a one-stop shopping experience that grocers have been trying to
mitigate with their own food/drug combinations.
"Many food retailers are wondering what's next," says Lasater.
"One thing I can tell you for sure is that enlightened customer
service and high-tech efficiency are critical to survival. The knowledge
and technology to reasonably do both now exists -- the evolution
of supply chain software has been especially hopeful -- and companies
have powerful tools and techniques to choose from to improve. "They
can even become a Nordstrom-style store," says Lasater. "It absolutely
can be done."
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