Target Plans to Make Its Customer Service More Personal
While technology can solve a lot of the problems facing retailers, sometimes customers want a human touch. At least, that's what Target (NYSE: TGT) CEO Brian Cornell believes.
The retailer, which has invested heavily in improving its supply line and shipping logistics in order to support its digital business, plans to do something different in store. It's going to spend money on personnel with an eye toward delivering more personal customer service.
Target will have to expand its hiring if it hopes to offer personalized customer service. Image source: Target.
How is Target going to do that?
Cornell laid out his plans at the annual Shoptalk conference in Las Vegas. He appeared along with Bill Smith, CEO of Target-owned Shipt, in a keynote interview conducted by Cowen Group Managing Director Oliver Chen.
"We're investing a lot in hours, staffing, training, and development and creating experts within our stores," Cornell said in remarks first reported by RetailWire. "Because we know as we listen to our guests in certain categories, they want someone there who is an expert."
In many ways, Target is returning to a model that higher-end department stores have always used. For example, when you buy a suit or mattress at a Macy's the person waiting on you has specific product expertise. That's what Target wants to offer.
"When they shop Target for beauty, they want a beauty expert that they're coming to," Cornell said. "In apparel, they want someone who [will help them] put the whole outfit together. When they're in a department like food and beverage, they want a food and beverage expert to interact with, let alone when they're shopping for technology."
Why is this important?
Many consumers need a reason to justify leaving the house in order to shop. Essentially, stores need to offer something that's not easy to get online. Expert customer service and help in areas where shoppers need advice may very well make it worth someone's while to visit a Target.
What Cornell is suggesting would bring Target customers a level of service generally associated with higher-end department stores. That's something its digital rivals can't offer, at least not yet, and it could set Target apart.
It won't be easy
Offering this type of product-specific personalized customer service requires a major commitment to people and training. It can be a challenge at Target currently to get someone to unlock a video game or check stock in the backroom. That's not to say employees are not well-trained, it's just that they are often in short supply or busy with tasks like shelving or pointing customers in the right direction.
What Cornell wants to offer makes sense, but it's expensive and will likely require an increased headcount in stores. The chain may be able to somewhat mitigate that by automating more in-store work that customers do not see, but that's an expensive prospect as well.
Target's CEO has a smart strategy here to set his store apart from its direct brick-and-mortar competitors and its online rivals. Pulling it off, however, will be an operational and budgetary challenge.
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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
