Kevin Peters was a bit confused. Sales at Office Depot, where he is president of North American retail, were falling faster than at other players in its niche, yet the company's mystery shopping scores were continuing to shoot up.
Peters set out to discover why on a road trip to 70 Office Depot locations nationwide. Now he's combining what he learned on his odyssey with research from other sources to improve the customer experience at Office Depot, which launched a massive corporate initiative that entails downsizing stores, retraining staff, improving signage and putting more emphasis on interaction with customers.
Megan Burns, a principal analyst at Forrester Research, says banks could take a few pointers.
Businesses too often take action based only on what they think customers want, Burns says. "I think the single biggest takeaway—and this applies to any company in any industry—banks included—is that all of the changes Office Depot made were rooted in direct customer feedback and research."
Peters dressed in jeans and a T-shirt for his store visits, never alerting the managers he'd be there. He would sit for a while in the parking lots, walk the aisles and chat with customers. He noticed lots of people leaving without shopping bags, which he found alarming. "This is not a browsing industry," says Peters, who shared details of the ongoing Office Depot transformation during Forrester's recent Customer Experience Forum in New York. "People come in with the intent to buy."
But at Office Depot, Peters says, customers had a hard time finding what they needed. Now, a greeter points people in the right direction as they arrive. Improved signs and visual merchandising also help. But how to actually improve signs is more complicated than just, say, making them bigger. Burns says thinking about the retail experience from the customer perspective is key.
"This applies to signage in a branch and even menu structure on a website: When we think about the labels we use to describe things and the way that we group things together—be it a product assortment or services at a bank—what makes the experience feel easier and more intuitive for customers is if the way those things are labeled and grouped is the way that customers think about it," Burns says. "Don't think about how you're organized internally."
One simple technique she suggests is card-sorting: Write descriptions of products on index cards and ask people to group the cards together in whatever way they think is most logical.
Peters says that the challenges ahead include getting staff to be more helpful, and giving them time to do so. A personality assessment Office Depot did of its employees showed that it had favored hiring those who were more comfortable performing tasks than interacting with customers.
The company has two lab stores and 30 pilot locations to test its ideas for improvements. It adopted a three-step sales process that it refers to as "ARC"—ask open-ended questions, recommend and close. Instead of rotating around the store, employees are put in charge of specific areas, so they can develop more product expertise while becoming faster at basic tasks such as stocking shelves. "We know that if we have people in furniture with good product knowledge, sales go up over 100 percent," Peters says.
The goal of all the changes at Office Depot is to help customers find solutions quickly. Achieving that would be enough to differentiate it from competitors, Peters says.
As for the mystery of the rising scores amid declining sales, "we were asking the wrong questions," such as were the floors were clean and the shelves stocked, Peters says. "Measure what's important to your customer."
