Customer service is an important logistical activity. Whenever customer service is discussed, the famous department store Nordstrom is always remembered. This Seattle, US-based chain has over 60 stores in Washington, Utah, Oregon, Illinois, California, Alaska and Virginia. It is now a legend in having created a culture of the highest standards in customer service, and is the most respected amongst fashion retailers, – and highly profitable. It has been able to develop very high loyalty amongst its customer base due to its highly motivated sales force and no-questions-asked returns policy. Indian firms try to follow them for differentiation, profitability as well as a decisive competitive advantage.
Nordstrom is a department store that integrates physical retail with e-commerce, using its stores for order fulfillment, including online order pickups and local inventory for faster delivery. To support this, Nordstrom implements logistics strategies such as RFID technology for inventory accuracy, automated data analysis for capacity planning, speed and efficiency. This approach allows Nordstrom to meet customer demands for quicker turnaround times and maintain a competitive edge in the retail market.
There are a lot of stories of Nordstrom’s depth of customer service. In one, a lady customer demanded that Nordstrom replace her car tyres, reminding the customer associate of the slogan of the store ‘We take back goods. No questions asked’ and refused any further explanation. The customer service associate referred back to the store manager who took the decision to replace the tyres with brand new ones. But Nordstrom never sold that brand of tyres! When the top management heard of the incident, they did not punish its manager for overstepping his authority; instead, it gave to every employee a golden pen-stand in the shape of a tyre as a reminder of what the company stood for – excellence in customer service – and what all the employees should strive for.
Nordstrom allows its people to operate like entrepreneurial retailers and it gives sales people and managers a wide range of operational and cost controlling responsibility. This is mostly seen in their returns policy. The store takes back the sold merchandise, no questions asked, if the customers say that they aren’t satisfied with them. This might be, and sometimes is, abused by customers but the Nordstrom customer service philosophy is not to punish the “98 percent for the dishonesty of a few”. The company trains its sales associates to tell the customer, ‘I guarantee [the return]. The company may not guarantee it, but I do.’ That’s a great selling tool
They are authentic in that they say they’re going to do something and they do it. They are true in how they represent themselves as a store to the customer.” That’s the authenticity of Nordstrom living up to their commitment on their return policy. It originates from their understanding of the customer.
Value-Added Services
The idea of value-added service is a significant development in the evolution to customer success. By definition, value-added services refer to unique or specific activities that firms can jointly develop to increase their efficiency and/or effectiveness. Value-added services help improve customer success. Because they tend to be customer specific, it is difficult to generalize all possible value-added services. When a firm becomes committed to value-added solutions for major customers, it rapidly becomes involved in customized or tailored logistics. They uniquely enable specific customers to achieve their objectives.
Value-added services (VAS) in logistics are services beyond standard shipping and warehousing that increase customer satisfaction and supply chain efficiency, such as kitting and assembly, custom packaging and labeling, returns management, quality control, and supply chain management. These services, often provided by third-party logistics (3PL) companies, help businesses customize their supply chain to meet specific customer needs and gain a competitive edge.
IBM’s ability to produce and deliver customized personal computers and networks to individual customers is one example of adding value to a rather standard product. Similar is the case of Dell Computers. In a logistical context, firms can provide unique product packages, create customized unit loads, place prices on products, offer unique information services, provide vendor-managed inventory service, make special shipping arrangements, and so forth, to enhance customer success. In reality, some of the value -added services that buyers and sellers agree to involve integrated service providers who are positioned to provide such services. Transportation carriers, warehouse firms, and other specialists may become intimately involved in the supply chain to make such value-adding activities a dream come true. At this point, a few specific examples of how they may work within a specific supply chain to provide value-added services are sufficient. Warehouses, whether private or third-party, can be utilized to perform a number of customization activities.
Example: A retail customer may have the need for a unique palletization alternative to support its cross-dock activities and meet the unique product requirements of its individual store units. Each store requires different quantities of specific product to maintain in-stock performance with minimum inventory commitment. In another situation, first-aid kits consisting of many different items are actually assembled in the warehouse as orders are received to meet the unique configuration of kit desired by specific customers.