Price vs. Customer Experience: Can Discount Retailers Have It Both Ways?

The world of retail is a study in contrasts.

ABC Co. is a boutique luxury brand. It rolls out the red carpet for its customers, personally guiding each and every one through the shopping experience. Customers leave happy, knowing they’re paying for the experience as much as they are for the merchandise.

XYZ Co. is a discount brand. Employees keep to themselves as they go about their daily tasks. Customers don’t expect much in the way of service; they shop for necessities, or they treasure hunt. They figure they’re on their own.

Until they reach the register, that is. (That magical moment when an associate asks in a deadpan voice, “Did you find everything you were looking for?”).

Now, imagine if XYZ Co. decided to make service a priority for its staff. Not the full-blown boutique brand of service. But friendly, helpful service that’s always available when needed. Consistently, for every customer, across all locations.

Over time, existing customers would come to expect it (and love it). New customers would go out of their way to experience it.

A discounter known for its prices and its people, like a low-cost version of Zappos? In today’s service economy, there would be no stopping XYZ Co.

Service, Not Price, Is the Engine for Growth

Price is important to shoppers, but competing on price alone won’t grow revenue or market share. (In fact, 45% of consumers say they would actually pay more for a better customer experience.) Whether you’re a discount brand or a luxury brand outlet, your job isn’t done when shoppers enter the store; you must also give them a reason to return.

This means, at a minimum, being prepared for them. Not just from a practical standpoint (stocked shelves, orderly displays), but from a service standpoint. A customer in need should be every employee’s #1 priority.

Customers’ expectations for service vary widely across categories and brands. You don’t need to upend the way you do business, but you should consider upgrading it. Instead of viewing labor hours strictly as a cost to be managed—and shrinking your workforce at the expense of customer loyalty and lifetime value—recognize the importance of service to your brand’s long-term profitability. Then decide, and make clear to your in-store teams, what service should look like in your stores.

3 Steps to Becoming a Service Leader

Service leaders in all categories make the customer experience a high priority at the corporate level. If you want to distinguish your discount brand in a way that fuels growth, you must focus your efforts in these three areas.

1.  Add a service component to training

Back in high school, I worked a discount retail job. Nowhere in the onboarding process was there any mention of customer service. My training was all about how to operate the price gun and the cash register. Or how to unload on “truck day” and restock the shelves.

Your associates don’t need to push sales in your stores, and they shouldn’t be glued to your customers’ side from initial greeting to close of sale. Your customers don’t want or expect anything like that. But they do appreciate associates who are readily available, knowledgeable, and happy to answer questions.

In your training, emphasize this service standard to your staff. Include role playing in the mix, and provide examples. Let your associates know that customers must always come before anything on the day’s checklist.

2.  Simplify the shopping experience

Great service delivery in a discount setting isn’t just about being available. It’s also about making the shopping experience so easy and efficient, customers can complete their journey with ease.

Organization plays a big role—specifically, the store layout (guiding the flow of traffic) and product arrangement (making items easy to find). Does the current store environment complicate the customer journey? Be sure to ask your customers for their input on what works, what doesn’t, and what additions or changes they’d like to see.

Product mix is another important consideration. One large retailer we work with offers a small selection in each product category, including owned brands, rather than 16 different versions of the same product type. The idea is to give customers the best products available, rather than a wide range of options. This makes shopping easier for customers, as it saves both time and money. It also makes life simpler for associates, who must now balance customer engagement with daily tasks.

3.  Ensure brand consistency

You can’t develop a reputation for great service if it’s not happening in every location, at all times. The only way to know whether employees are meeting brand standards—and to improve training as needed—is to mystery shop your stores.

A mystery shopping program will benefit your in-store teams, and your brand image, in several important ways. Employees will know exactly what behaviors and conditions are being tested—and, therefore, what corporate expects of them. Managers can use the results to immediately recognize and reward excellence on an individual basis, which drives continual improvement. And the resulting surge in confidence and morale across your workforce will shine through in every customer interaction.

Regardless of Price Point, Your People Are Your Brand

Low prices will get customers in the door. But only great service delivered by friendly, helpful people can build loyalty. Your workforce is far and away your brand’s greatest asset.

It’s time to adopt a service standard to distinguish your discount brand so you can stop focusing on quarterly numbers and start aiming higher. Set the right expectation for your employees and your customers, and keep measuring your progress. In time, on this new path to growth, you’ll start accelerating your gains—and changing the game for discount retail.