Implementing Service Improvement at a Specialty Retailer

BCG helped a specialty retail chain redesign its store and customer service processes to dramatically increase customer satisfaction.

A specialty retail chain with thousands of locations was experiencing service issues in its stores. Although the overall customer base was still expanding, many regular customers were leaving for the chain’s competitors, and service problems were a direct factor in why its most frequent customers were switching. The company launched an initiative with BCG to identify the root causes and develop, test, and roll out the changes needed to dramatically improve the customer experience.

The team found that a significant number of customer orders had problems that were not resolved by the time customers came in to pick them up. These problems led to dissatisfaction and long lines at peak hours. Digging deeper into root causes, the team uncovered almost 70 specific service issues along the entire value chain.

To address these issues, the team fundamentally rethought how the store should operate. They completely redesigned the customer interaction and order flow, changing the sequence of several steps so that certain problems could be addressed when the order was initially placed (and the customer was still in the store). They also removed several bottlenecks in the process.

In tandem, the team also made physical changes to store layouts to support the new flow, and clarified the roles and responsibilities of employees. A new staffing and scheduling model reduced costs while improving service during busy times. An automated system was also added to track the flow of product orders.

The changes were ultimately implemented across all stores in the chain and led to significant benefits, including an overall improvement of more than 10% in internal customer satisfaction scores. External ratings found similar results, including a national independent customer satisfaction survey that rated the retailer highest among its peers. Same-store growth led the industry. Equally important, the company realized sizable annual labor cost savings through improved productivity, even as employee retention increased due to greater job satisfaction.

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