||Customer Service Push Pays Off for Home Depot, Lowe's and Rivals
Flipping through door after door on display at her neighborhood Home Depot as if they were pages in a magazine, Debbie Megliorino envisioned her next home improvement project: a bedroom upgrade for her 1950s-era home in Burbank, Calif.
But for the 53-year-old postal clerk, the shopping excursion was a bit of a surprise. Instead of a frustrating amount of time finding "the guy in the orange vest" to help her, she got attention right away.
"A lot of times it's been hard to get someone to help me," Megliorino said. "Today I've been asked three times if I needed anything. One guy even walked me over to the screen corners."
Her experience was no fluke. Home improvement giants such as Home Depot Inc. and Lowe's Cos. are ramping up their customer service in a big way, and it's paying off in sales, profits and shopper satisfaction. Over the last year, the price of Home Depot stock has increased 74 percent, and Lowe's shares have gained 35 percent, while the Standard & Poor's 500 index has climbed 17 percent.
The big home improvement companies have been busy directing clerks to spend more time with customers, improving the information and advice they offer in online catalogs, installing Wi-Fi computer service in stores and improving do-it-yourself instructions. They are coming up with ways to reach consumers with smaller budgets through multiple avenues, mostly online.
How-to workshops have largely moved to YouTube channels, and photos on Facebook and Pinterest have replaced clippings from a magazine or catalog.
"Take a step back and see where the two major players were seven years ago when the housing market was booming," said Peter Wahlstrom, a senior analyst at Morningstar Inc. "There was a lot of new construction, and the stores were so busy that they didn't have to cater to the regular customer and bend over backward for them.
"Then we get into the economic downturn, and people stop spending. Construction goes from bigger projects to smaller renovations, and customers shift from contractors to those wanting to do it themselves," he said.
In terms of customer service, the giant home improvement chains are catching up with smaller competitors such as Ace Hardware Corp., which has ranked highest in customer service for the last six years in an annual survey by J.D. Power and Associates.
In the most recent survey of home improvement retailers, Ace ranked first, followed by Lowe's, Midwest chain Menards, Home Depot, True Value Co. and Sears Holdings Corp. Home Depot moved up from No. 6 to No. 4 in the last year.
"While many retailers have struggled to right-size their staff with the down economy, Ace Hardware and Lowe's clearly have kept the focus on their customers," said Christina Cooley, senior manager at J.D. Power. "What's been pretty clear with Home Depot is they're trying to address their problems and making progress."
Lowe's said it has upgraded its 1,710 stores. The Mooresville, N.C., company outfitted each with Wi-Fi and 25 iPhones for associates to help customers with their shopping during its last holiday season.
Now, an idea sparked from a Pinterest board can be pulled up on the iPhone or a customer's Wi-Fi-enabled device. The products can be searched for immediately and bought on the spot.
"We know customers are going to spend a lot of time on social channels, sharing ideas and inspiration with each other," said Brad Walters, Lowe's social media director. "We want them to come into the stores with ideas and questions and talk with our store associates. They're a wealth of inspiration."
Lowe's online effort has also led to cross-references on its Facebook and Pinterest posts to link back to the chain's website, complete with cost estimates and product numbers.
Lowe's reported a profit of $527 million for the fiscal quarter, which ended May 4, up 14 percent from $461 million in the same quarter in 2011.
Home Depot, the nation's largest home improvement company, has 1,976 stores nationwide.
In 2009, the Atlanta company introduced a plan to devote 60 percent of an associate's time to helping customers rather than stocking the shelves and cleaning the store. This year, just before the busy spring season, every employee was retrained under the Customers First initiative.
Customers First includes store "power hours," when orange-vest-clad associates will drop what they're doing during high-traffic times and actively seek customers who aren't already being helped. Employees are also trained to analyze the customer's basket and cart to see what may be missing to complete a task, Wahlstrom said.
At the Home Depot store in Burbank, "people will come in with printouts and ask, 'How do I do this?' and now that we're free to help, I can do that," store supervisor Dave Hauer said.
One customer came in clutching what he thought was a copy of a go-cart manual. "But it was just the cover, not the manual itself," Hauer said. He helped the customer find the go-cart's components and explained how to build it at home. "I think we made it a lot better, actually. That was a lot of fun."
Ace Hardware has 4,600 stores that are individually owned as part of a cooperative with its headquarters in Oak Brook, Ill. The stores are usually woven into neighborhoods and cater to "regular Joes," said John Venhuizen, chief operating officer for the chain.
"We've beaten the same drum for a long time," he said. "People are our passion, and that's where we want to win."
(Source: Los Angeles Times, 08/29/12)
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