Claire Millard: Customer is king – lessons for the Estonian supermarket sector

Having worked in retail leadership positions in the UK for ten years, Claire Millard is used to helping store colleagues and managers refine their customer service skills. Since arriving in Estonia she has been observing the supermarket sector with interest; and trying to raise a smile from the colleagues on the checkouts.

The other day I popped into a basement supermarket in Tallinn for a few forgotten groceries. I was served by a nameless assistant wearing an õpilane (apprentice) badge. I watched him process the transaction before me, wordlessly, studiously avoiding eye contact with the customer as he threw her purchases down the belt. Intrigued by quite what this õpilane had learned so far about customer service, I pointedly smiled and said “Tere!” as he started to scan my products. He ignored me, preferring to hurl my shopping into the pile being hurriedly collected by the customer before me. The total amount flashed up on the screen. Silence. “Ma maksan kaardiga” (I’m paying by card). Not even a grunt. I paid, a receipt was waved indifferently in my general direction. “Äitah, nägemist!” I said. He had already started to grab the next customer’s goods, still staring into the middle distance.

This was an unusually awful example of customer service, but what intrigued me was the õpilane badge. Firstly, it would appear that nobody had suggested eye contact, or the use of standard pleasantries, during this apprentice’s training. Or at least, if they had, it had been done in such a way that this new trainee decided they were optional extras and not fundamental to the job he was being employed to do. More unsettling still, was the completely stony-faced lack of enthusiasm shown. If this is the best he can muster in the first days or weeks, when the new job ought to remain fresh and interesting, then to what depths would his service sink in the months or years to come.

Realistically, I doubt he intended to be there in months or years to come. And therein lies a problem. The issue I highlight is not about the shop assistants themselves. After ten years working in retail, I know very well that shop assistants have the hardest, poorest rewarded jobs in the business. Customers can be cruel, workload is relentless and the tasks required can become a dull blur of long hours, physical demands and limited appreciation. The issue is not the assistants themselves, but the structures, processes, systems, and – sadly – sometimes, managers under whom they work.

Judging by what I know and what I can see in Estonian retailing, supermarkets can not attract or retain enthusiastic staff. All of the major chains are advertising new jobs on a daily basis, as well as using short term labour through services like Go Work A Bit (a short-term recruitment website) – doubtless some of this is due to successful expansion, but also because of excessive staff turnover.

As can be the case all over the world, retail is often not seen as an aspirational or even interesting place to work. Jobs are taken as a stopgap until something better arises, and the shop is quickly manned by a catastrophic combination of disinterested apprentices, and the battle worn long serving colleagues who have resigned to their fate, but who would rather be anywhere other than work.

Customer is king

Retailers know this is an issue; it is a challenge all over the world and it is difficult to resolve – but does it matter? These days in Estonia, customers perhaps choose their supermarket based on location or the specific offers available that week. This can mean that brand loyalty is limited as customers cut and change between the best deals that week or month. This is not unusual – supermarkets, and retail as a whole, fight on price and promotion. But promotional highs are a drug retailers need and despise in equal measure. A sales spike bought one year through heavy discounting, promotion and investment in marketing spend (the hullud päevad (a short discount rally some stores in Estonia practice) phenomena), only means that next years’ equivalent needs to be bigger, longer, higher volume. Retailers look at year-on-year growth, and growth bought through intense discounting in the short term is paid for in the following year’s balance sheet. In the longer term this is unsustainable.

Although supermarkets do not suffer from the full blown hullud päevad condition, buying volume spikes through flooding the shop with specially bought in products which may entice new customers over the threshold, but risk being brand damagingly low quality; they have the same addiction in a less intense, but more naggingly dangerous way. In the short term, customers may switch shops on occasion to chase great offers. But pricing goods to steal custom as a sole means of growing business, with the razor thin margins of supermarket retail, risks being death by a thousand cuts as tight margins are squeezed even tighter. This is difficult for retailers, and impossible for suppliers, who are squeezed ever harder and would particularly damage low volume, local suppliers – precisely those that Estonian retailers should be supporting and promoting.

Gaining long-term customer loyalty is what will win the war for supermarket market share. The Estonian market is already close to saturation, which will quickly remove the consideration of proximity from customer’s thinking – if you walk or drive past three or four supermarkets on a daily basis (I do), you will vote with your feet. Ranging in all major supermarkets is similar and will evolve to be identical – all stores will stock the same good, better, best selections of core products, with little difference in quality.

Competing on price will become unsustainable as the market matures. In the UK all of the largest supermarkets “price match”, meaning that customers are refunded the difference if their equivalent shop would have been cheaper elsewhere. Customers “leave price at the door”, and what will dictate where they shop is the in store experience. If I get poor service from the õpilane (trainee – Editor) at the first of the four supermarkets I pass on a daily basis, I will simply shop elsewhere the next time.

So, customer once again becomes king, and service becomes a key factor in who wins business.

Happy colleagues, happy customers

As soon as service is accepted as the swing factor, making a real difference to where we shop, the attention paid to ensuring colleagues are motivated, trained, rewarded and happy must increase. If colleagues are not engaged with their roles, they will not be motivated to deliver on service.

Motivating store colleagues cannot be simply about improving wages. The margins in food retail are too tight to allow meaningful change in basic wages. The bigger motivation is likely to come from better training, support, motivation to increase job satisfaction, and a real view of career progression and a way to increase earnings. Describing retail as a viable career (not a stopgap job), and backing this up with genuine shop floor promotion, will help recruit a new wave of staff who see retail as a career choice and not a desperate gap fill.

Giving colleagues the skills and knowledge they need to be able to confidently talk to customers by keeping them informed about new products and offers will help overcome some of the fears that prevent interaction. As well as delivering an increase in sales, this approach should help those already employed in retail to find greater satisfaction in their roles and perhaps decrease the number of colleagues still at the õpilane stage, and clearly uninspired by the role they have taken on.

I see the Estonian retail market as an interested outsider, after ten years of working in retail operational and people management in the UK. Perhaps supermarket retailers have identified already the inevitable move towards customer experience and therefore loyalty, as an indicator of likely future growth. Maybe there is a robust plan underway, to retrain, recruit and retain customer assistants with the attitudes and aptitudes to deliver, and managers that can lead and inspire them. As a customer I sincerely hope so.

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You can also read this opinion article in Estonian. The opinions in this article are those of the author. The cover photo is illustrative and is not directly related to the content.