‘Service wars’ imminent after Walmart decision
Aki Kalliatakis
Service wars across South African retailing are imminent following the Competition Appeal Court’s decision to uphold the merger of local store chain Massmart and Walmart, the world’s biggest retailer.
The prediction comes from customer service guru Aki Kalliatakis who believes service rather than price will be the battle ground of choice for smart store owners looking to take on “the Goliath of world retailing”.
Kalliatakis, the ‘Delight Your Customers’ facilitator of service-driven corporate strategies, says global experience is not in favour of those who try to take on Walmart in a price war.
“They almost always come off second best,” says the managing partner at The Leadership LaunchPad management consultancy. “But those who respond by creating improved customer service experiences – albeit at higher prices – have thrived.
“My conclusion?
“Service wars are on the way. Delighting your customers will not merely be the nice thing to do; it will be the only thing to do if you expect to take on the Goliath of world retailing and establish your own unique niche.”
Kalliatakis warns that Massmart/Walmart already has a head-start on competitors.
He notes: “Massmart sales rose 15% and earnings moved 21,1% higher during its first six months as a subsidiary of Walmart. Customers voted with their feet even without final merger approval.”
The advocate of service as the basis of business sustainability says various interest groups have muddied the waters and misread the long-term implications of Walmart’s entry into Africa.
“The ANC government, COSATU, retailers and suppliers have had their say,” he adds, “while commentators have highlighted the likely price-cutting. Now it’s time for consumers to have their say.
“The critical areas are the customer experience and customer expectations once Walmart redefine what shoppers can expect in terms of service, ambience and facilities not only price and value.”
Kalliatakis draws on a 22-year database of key drivers of customer expectations in local and international markets.
“Walmart does not pretend to be the best place to shop,” he says. “The typical Walmart store is functional, not beautiful. Cardboard boxes with products fill the aisles so customers do not need to cover the cost of an employee hired to pack individual items onto shelves.
“Service is minimal, but not disappointing. You will not need to queue for a long time to pay for your goods and there is always ample parking. Their slogan “Save money. Live better” describes their mission perfectly.
“When the 450-pound gorilla that dominates the retail turf uses price as its weapon of choice, the response that makes most sense is to hit back with exceptional customer service.”
Any service-led counterattack will not only impact Walmart, but all other retailers.
Kalliatakis adds: There will be a scramble for the service excellence high ground … which is good news for consumers and for our retail industry.”
