TAKING CUSTOMERS SERIOUSLY

Glenn Reynolds has an interesting discussion of retail economics in his MSNBC column.

My vacation (which was actually a semi-working vacation) was nice. But I have to notice that a lot of Americans seem to be taking involuntary vacations, in part because employers are squeezing employment in order to keep costs down. I wonder, though, if that isn’t about to end.

I had an example of the latter at a super-Target the other night. With only two cashiers on duty, the lines reached back across the aisles and into the kids-clothing department. Upon seeing that, I set down my stack of closeout-priced lawn chairs and left without buying anything. Several other people were doing the same.

Obviously, somebody blew it. No doubt Target, like other retailers, tries to keep staffing down by having just enough cashiers on duty to keep the lines just short of the point where it hurts sales. So either business is picking up faster than they thought (meaning that the economy is recovering?) or they just guessed wrong.

I’m not sure which it is, but I’ve noticed a similar phenomenon at other places where I shop. The Bi-Lo grocery store has had long lines and fewer cashiers lately, too, though I at first attributed that to an effort to shift customers toward the U-scan automated checkouts. (It’s not working, if so). The result, though, has been that I’ve shopped more at the nearby non-chain grocery store that always seems to have enough people on duty to keep my wait short.

They value my time, so they get my business. Places that don’t mind keeping me waiting get moved to the bottom of the list. And in conversation, it seems that a lot of other people are starting to feel the same way.

If I’m right about this, it means that unemployment may be about to start going down, even if the economy stays flat. Target would no doubt rather have sold me the lawn chairs than have me leave annoyed, and thinking about going to Wal-Mart next time. Ditto for Bi-Lo. At least in the retail trade, it seems that people have squeezed personnel costs about as far as they’ll go for the moment, which will probably mean that they’ll have to start hiring new folks soon. They’d better. Because the memory of bad service lasts longer than the few pennies saved in the process of rendering it.

Indeed.

I’ve “done a Glenn” many a time myself–as recently as Saturday morning in fact. If the store’s prices are just so low that I can’t beat them elsewhere, or I just really want the item that I have in my hands badly enough, I’ll wait. Otherwise, I’ll walk out in a heartbeat.

I guess bad service doesn’t matter so much in smaller towns where Wal-Mart is the only choice (I’ve lived in several). And, for people who make a small fraction of a law professor’s salary and can’t afford boutique grocery shopping, bad service may be something that must simply be endured. But I hope retailers get smarter about the bad service they offer. What’s always baffled me is why places like Super Wal-Mart will have 40-50 checkout lines and invariably fewer than 10 cashiers employed. I think it would be less maddening to simply have 10-15 cash registers and make it appear that management is operating to capacity and it’s just a popular place.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Guy Cabot says:

    Glenn Reynolds isn’t a particularly deep thinker as illustrated by this piece.

    Generally speaking, retail stores which don’t have enough cashiers suffer from a lack of good management, not a shortage of personnel. I’d bet the mortgage that if Glenn had taken a look in the back of the Target store, he’d have found plenty of cashiers, goofing off.

    I live in a large metropolitan area and, as such, can easily compare the very same retail stores. I can tell you which Home Depot will have long checkout lines and nobody to help you on the floor and which one will have short lines and plenty of knowledgeable staff. Even my child understands which is the ‘stupid’ McDonalds and which one is the ‘good’ McDonalds.

    In fact, I know Safeways employ ’emergency managers’ who come in a take over management of certain stores if it is getting too many complaints or if sales start to dip.

  2. Kevin Drum says:

    You should also keep in mind the very thin profit margins that retail stores work under. There are enormous variances in line length, and if they staffed to meet the maximum lines it would easily mean the difference between profit and loss.

    You’d be amazed at the difference between employing, say, 30 people at a Target vs. 33. That’s all it takes to go into the red.

  3. Kevin Drum says:

    By the way, they have 50 checkout lines because they really do need them at Christmas. Most sit empty the rest of the year, but them’s the breaks.

  4. James Joyner says:

    Kevin,

    Good point on Christmas and other seasonal boosts.

    One wouldn’t think a couple extra minimum wage cashiers would be that expensive in a large operation like that, but I don’t know that for sure.