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Key to successful grocery business is upping your customer service game

New study shows customer service, sales promotions and expanded offerings are key differentiators

In an evolving Canadian retail landscape, retailers need to up their customer service game to stand out.

That’s the conclusion of the third annual American Express Retail Insights Report, which provides insight into the current state of Canadian retailers within the gas, grocery, restaurant, fast food and retail sectors.

On behalf of American Express, Nielsen surveyed 375 decision-makers in the five sectors. Despite uncertain economic times, the majority of retailers (84%) said the financial outlook over the next 12 months is positive, compared to 75% in 2014 and 80% in 2012.

Of the five sectors, grocery proved to be the most positive in both industry (89%) and business (93%) outlook compared to the other industries surveyed.

“Although there’s increased competition within the industry, the grocery sector has also seen several closures and Canadian exits, so the silver lining is they’re sales are increasing–grocers are feeling more confident,” explained Jennifer Hawkins, VP and general manager of merchant services at American Express.

In the survey, 62% of respondents from the grocery sector said their sales have increased compared to last year, against 46% reporting a sales increase in 2014.

All industries focused on customer service as a top differentiator for their business.

Offering sales promotions or discounts (85%) was a key differentiator for the grocery sector. A focus on expanding product offerings and services was up 8% from last year from last year.

“Everybody has upped their game because of increased competition,” said Hawkins. “Retailers are focused on customer service to improve loyalty. They’ve seen it work, and now they’re doubling down.”

Roberto Sbrugnera, vice-president, treasury, risk and investor relations at Metro, points to life-smart, better-for-you and gluten-free products as driving a lot of growth in Metro stores. The acquisition of Premiere Moisson, he said, also means the stores can differentiate themselves by selling high quality, artisan products.

“It’s about changing to meet customer needs, finding products that are innovative and being first to the market with them,” he said. “ You differentiate yourself by having an exclusive bread or meat, or private label products that the customer can only find in your store.”

When it came to key concerns regarding competitors, gas, fast food and retail businesses proved to be the most concerned about competitors expanding product offerings, while grocery and restaurant sectors were most concerned about new competition.

Surprisingly, shifting online was not a priority for retailers.

“I was a bit surprised to see that Canadian retailers are still lagging behind their U.S. counterparts in terms of their focus on e-commerce,” said Hawkins. “However we’re seeing more grocers consider online delivery and in-store pickup, so they’re definitely testing the ecommerce space.”

Fifty six per cent of respondents in general retail said online isn’t relevant to their industry, followed by grocery at 55%.

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