There’s a lot to like in the David Jones’ Future Strategic Direction Update Paul Zahra announced last week.
It ticks a lot of boxes – how DJ’s is progressing in becoming an omni-channel retailer, addressing cost price harmonisation (a fancy way of saying reducing prices to be more globally competitive), investing in customer service and engagement, aligning the management team, putting money into technology.
For all the positives though, you get the feeling that DJ’s is playing catch up when what they really need to do is to leapfrog, and also missing the point of what they actually need to win on.
The numbers tell the story. DJ’s latest results show a 4.8 per cent decline in sales for the year ending June 30 2012.
Meanwhile, US department store Nordstrom is on track for a 5.7 per cent increase in revenue for its fiscal year, ending January 2013.
And just last week UK department store, John Lewis, reported first half sales were up 12.8 per cent, with like for likes growing by an astounding 9.2 per cent (no doubt kicked along by a couple of ‘small’ events in the UK this year – the Olympics and the Diamond Jubilee).
Speaking of the Olympics, the relative performance of DJ’s to Nordstrom and John Lewis is a bit like our green and gold guys compared to the US and Team GB. The northern hemisphere counterparts seem better prepared and more advanced. Metaphorically, the global competitors appear to be well down the track, while DJ’s is still lacing up its shoes.
Take online for instance. Earlier this month, Nordstrom was ranked number two on the 2012 Digital IQ Index: Specialty Retail in the US. On the other side of the pond, johnlewis.com accounted for 24 per cent of total John Lewis sales in their first half of trading.
These retailers embraced e-commerce and digital and ran with it long ago, while DJ’s is just getting (back) in the game.
Look further behind the statistics and there is a clear and compelling central premise for the success of both Nordstrom and John Lewis – a strategic imperative that unites all their tactics. To paraphrase Bill Clinton’s 1992 election mantra, “it’s the service, stupid”.
As reported by Megan Conniff on blog.shop.org, Jamie Nordstrom told a conference in the US last week that his eponymous department store has precisely the same goal each year: improve customer service.
Whether you are talking about iPad catalogue browsing in store, mobile POS, or social media response, it all comes back to serving customers better.
Service is enshrined in the very fabric of Nordstrom, from its beginnings as a shoe store. When you have to get down on one knee to help a customer try on a pair of shoes, service is in your DNA.
Nordstrom empowers staff to do the right thing. Its entire service instruction manual comes down to eight little words: “use your own best judgment at all times”.
Similarly, John Lewis is all about service. You can see it in recent innovations such as the online shopping points dotted throughout its new Westfield Stratford store, and the Click & Collect station positioned conveniently right next to the car park. (By the way, the Click & Collect service has grown by 114 per cent year on year.)
But like Nordstrom, a service ethos runs deep within the organisation. John Lewis is not called a ‘Partnership’ for nothing. The business is a true cooperative, with every staff member sharing in its success.
Each year, John Lewis releases “the number”, which relates to the percentage of your wage you will reap as a bonus. Last year, the number was 14 per cent – just under eight weeks salary. You’d better believe John Lewis’ people are motivated to serve customers brilliantly.
So, coming back to DJ’s, what’s missing for me in their Strategic Direction Update is what made the business famous in the first place: service.
It’s in there, but it’s buried. Service should be the one-word mantra, every tactic should overtly support putting service first, and DJ’s should be searching for some breakthrough service initiatives (not me-too plays) that truly dazzle customers and the investment community alike.
It’s the service, stupid.
* Jon Bird is CEO of specialist retail marketing agency IdeaWorks (www.ideaworks.com.au) and chairman of Octomedia, publisher of Inside Retail. Email here. Blog: www.newretailblog.com Twitter: @thetweetailer
