I came across an interesting article discussing how department stores have differentiated themselves in the past, what they should focus on now, and what they should focus on in the future.

What happens when the majority of department stores sell similar brands at competitive prices? Retailers then need to start focusing on customer experience and customer satisfaction as differentiating factors.

For instance, retail electronics giant Best Buy offers in home tech support with Geek Squad.

Can you think of any other examples?

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According to Nielsen, the number of shoppers buying less expensive brands is increasing from 23% in December to 35%. Stop & Shop, Shaw’s, and Whole Foods are responding by more heavily promoting their less expensive store-brand, or private-label, products.  “Some of the typical behaviors we see when people are feeling pinched is they do use coupons and they buy more private-label products,” said Judy Chong, spokeswoman for the West Bridgewater-based Shaw’s.

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Verizon’s small- and medium-sized business customers participating in the Business Link Rewards program are now eligible for discounts and special promotions every time they shop at the Verizon Business Links Online Mall.

Small- and medium-sized business customers who use the Online Mall can get discounts from more than 350 retailers, including Best Buy, Dell Computers, Office Depot, Expedia, eBay and Target

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Every day for 21 days (July 7- July 27), Domino’s customers will have the opportunity to win $10K when they order the Gotham City Pizza.

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Denny’s will start to offer a new breakfast takeout program to compete against fast food chains such as McDonald’s and Burger King.

“More than half of time pressed Americans eat their meals on the go, but are forced to choose fast food because of busy lifestyles and time constraints,” the company said.

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By texting “IKEA1″, customers can join “Ikea Mobile” where they can receive mobile coupons that can be redeemed and scanned at stores using bCode MediaPlane technology. While brands are generally happy with the 1% to 2% response rate for offers, bCode coupons have had 10 to 45% of its text messages redeemed at the Ikea location, per the company.

Such texts will eventually become a nuisance to customers, said Bruce Temkin, principal analyst, customer experience, Forrester Research, Cambridge, Mass. “The e-world is filled with these can’t miss [marketing technologies] that everyone falls in love because they are new,” he said. “Am I really going to go out of my way for what is essentially spam? Just because you put a discount on spam, doesn’t mean you are going to act on it.”

Even though Bruce Temkin of Forrester Research feels that mobile texting will eventually become a nuisance to customers, there are still companies interested. Alloy and Real Content Group have also looked to use the technology in urban settings.

I feel that text messaging will work depending on who your customers are. Those in the 18-34 range are more likely to be texting and are already use to being bombarded with thousands of advertisements on a daily basis.

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Safeway’s “Power Pump Rewards” allows a consumer to earn 10-cents off a gallon when a shopping trip adds up to $100. With the price of gas above $4 a gallon nationally, businesses are turning to gas card promotions like this to get consumers’ attention and increase sales.

Do you think more businesses will adopt gas rewards program?

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Bruegger’s will offer its New York-style, hot-from-the-oven red, white, and blue swirled bagels on July 3rd and 4th to celebrate the Fourth of July holiday and help the men and women of the Armed Forces and their families.

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Research indicates that a four minute wait at a grocery store line can jeopardize customer loyalty. Shopper’s satisfaction remains high when in line four minutes or less in all store categories. Club stores are the only exception where an average wait time slightly over four minutes was accepted. One study found that 43% of consumers said long lines would affect their decision to shop a particular retailer in the future.

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By the end of the year, J. Corey Oliver, CEO of Traveler Guitar, expects sales to total as much as $1.8 million, a 44% increase over last year’s $1.25 million. In 2004, sales were $450,000. When asked about what Traveler Guitar has been doing differently this year to improve sales, Oliver said that improving customer service has made a difference.

For Oliver, responding to customer concerns and making sure his customers are happy and satisfied, is a main priority.

Customer Service as a Competitive Advantage

Shawn Gray, a Santa Monica musician, was surprised last month when Traveler Guitar offered to fix loose wiring for free, three years after he had bought the instrument. Not only did the manufacturer fix loose wiring, but the nicks were repainted, fresh strings were put on, and the instrument came back with a new case. Shawn thought the manufacturer had sent him a new guitar.

There are other companies that sell traveler guitars but none can compare to the customer service that Traveler Guitar offers. “Your customer service better be rocking,” Oliver said, “and your product better be stellar and your relationships better be fantastic.”

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