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Retail Service Case

THE CASE

Company A is a large national retailer that sells general merchandise and grocery. They had over 300 locations across the country with locations outside of Canada as well. Company A was doing relatively well and often surpassing growth figures relative to its competitors. Company A had a strong reputation for being a reliable retailer with merchandise that often suits the customer need. Their core target market was defined as men and women between the ages of 25-40 with an average disposable income of $30,000. Company A was well equipped to provide merchandise to its core target audience.

However, Company A was experiencing difficulty achieving industry level customer service at its front end checkouts. Customers often complained about long line ups and wait times with too few visible registers open. Company A was viewed as the primary choice for customers to shop, however, the long wait times lead to customer to shop at competitors. If this problem persisted, there was a strong chance that Company A would continue to lose customers to its major competitors. Labour was a large concern for Company A, as they had little flexibility in adjusting their budgets to add labour and open more registers.

OUR APPROACH AND RESULTS

Company A was well positioned to provide the right merchandise to its customers however at first provided a negative last impression which can be detrimental to the whole customer experience. We asked customers to list the top three shopping pain points while shopping in Company A. We compiled these results and one of the largest complaints was there were too few registers open at any given time. The client had specified that labour was a constraint therefore opening more registers was a last recourse. We understood the customers shopping patterns and checkout behavior to focus in on the core root cause. The root cause was determined to be the customer basket size. Often more complaints came from customers with small basket sizes therefore we introduced a new concept that would not require additional labour and increase throughput through the front end. We segregated check outs based on basket size and introduced a queuing model whereby customers with small basket sizes can use the queue and checkout much faster. This was justified with that fact that over 80% of the customers had basket sizes defined under our recommended threshold. Cashiers were re-balanced across this new register assignment. Customers with larger baskets didn’t have a high expectation to move through the registers faster, although they too ended up benefiting by removing the small basket size shoppers ahead of them. As a result the line length and wait time decreased. The overall results were as follows:

  • Nearly 25% improvement in throughput
  • Customer complaints dropped by approximately 40%
  • Wait time was on average 2.7 min compared to 5.5 min prior
  • No addition in labour
  • 6% increase in sales due to more customers through the check out

We are glad to report that our client is continuing to see positive growth with more customers commenting on the improved process.

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