"Enlightened hospitality" in your retail business

Even if you’ve never heard Danny Meyer’s name, you probably know Danny Meyer’s food. The founder of Union Square Hospitality Group, he has been making his mark on the New York restaurant scene for nearly 40 years. Union Square Cafe, Gramercy Tavern and Shake Shack all have a place on his resumé. But beyond his James Beard Award-winning eateries, Danny has made a name for himself as a business and hospitality guru.

Now if you’re a restaurateur, we might as well have just explained LeBron James to a basketball player. Danny is acclaimed for his impact on the restaurant industry, after all. But if you’re a retailer, you may not be familiar with his legacy and enlightened hospitality philosophy.

Don’t worry: We’re going to tell you why you should be.

Danny wrote the book on hospitality (literally — it’s called Setting the Table), and many regard his methods as the gold standard for running a restaurant. We’ll let you in on a little secret, though: You can apply most of his concepts to nearly any customer-facing business. And retail, specifically, can greatly benefit from a hospitality-oriented mindset.

Want to work his methods into your business? We were lucky enough to have Danny in The Entrepreneur’s Studio, so we’d love to share some of his wisdom and how it can help your retail business succeed.

What is enlightened hospitality?

Enlightened hospitality is a customer service strategy that puts employees above customers and defines a clear line between service and hospitality.

You’ve undoubtedly heard that “the customer is always right.” Customer needs trump all, no? Well, not necessarily — at least according to Danny Meyer. His philosophy emphasizes employees over customers, and for good reason.

Think about it: If your staff is in good spirits, they’re more likely to provide good customer service and create a positive customer experience. And vice versa: Teaching your team always to follow the customer’s lead can often leave them feeling demoralized. So an employee-first workplace – one where you’re prioritizing staff’s working conditions, health and satisfaction – creates happier, stickier employees and increased customer satisfaction. It’s a virtuous circle that ultimately boosts your bottom line.

Another key part of Danny’s philosophy focuses on the distinction between great customer service and a great customer experience (and the need for both).

Service is “the technical delivery of a product,” be it a Gramercy Tavern five-course tasting or the latest pair of Air Jordans. Customer experience – or hospitality – is “how the delivery of that product makes its recipient feel.” You need excellent customer service and a standout hospitality experience to win hearts and boost customer retention.

How to win hearts with the 51% solution

Danny’s 51% solution is a crucial piece of the enlightened hospitality training he requires for new hires. He instructs his employees to look at every interaction as a test and aim for a score of 100 on each. The most percentage points they can get for level of service is 49. The correct dish gets to the correct person and everyone at the table has a full place setting and a drink. That’s good service.

The other 51 points come from how you make the customer feel. If you serve a guest the most perfectly prepared, beautifully presented crème brûlée in the world, but you appeared distracted during the ordering process, neglected to ask about any food allergies or didn’t empathize when their favorite special was out of stock, that’s a failing grade.

In retail, if you sold $500 worth of impeccably tailored, high-quality workwear to a new customer going back to the office after maternity leave but failed to ask about her job, baby or what she feels most confident in, that’s also not going to win you many customer loyalty points.

So here’s a nugget that applies across customer-facing industries: Train your employees to really get to know clients – their needs, preferences and what they want from your business – instead of trying to make a quick retail sale. People can see right through that. You can sell superior products and boast excellent product knowledge, but if you don’t go the extra mile to have meaningful interactions with your customers, you’re unlikely to secure many repeat purchases.

What does enlightened hospitality look like in retail customer service?

Couple great service with a great experience

For retail businesses, it’s never been more important to give shoppers something that goes beyond the traditional, transactional shopping experience. Between heightened competition with big box stores and a massive spike in online shopping (partly thanks to the pandemic), you’ve got to provide a unique in-person experience that people won’t find elsewhere and can’t be replicated through an ecommerce site. And you’ve got to provide a customer service experience that makes them feel good while you do it (remember the 51% strategy!).

What does that look like? Here’s inspiration from brands nailing the retail customer experience by offering premium hospitality.

REI gives customers the convenience and confidence they crave

From in-store backpacking-for-beginners classes to wilderness survival workshops, outdoor retailer REI is king of retail experiences — and has a loyalty program to boot. The REI Co-op’s one-time fee gets you a lifetime membership and includes perks far beyond free shipping: limited-edition products, free repairs, events and access to a members-only gear trade-in program.

But while the membership program offers a convenience that should certainly get some credit for turning casual shoppers into loyal customers, it’s the retail store’s staff that really leaves an impression. Sales associates are outdoor experts. When someone is gearing up (literally) for a trail marathon, their first camping trip or highest summit attempt yet, that employee expertise and genuine interest in the customer’s goals may be crucial to their confidence in not only making the purchase, but embarking on the journey.

Sephora creates an inclusive community

A stroll through a beauty store can stir up various emotions, not limited to insecurity, vulnerability and seclusion. But Sephora doesn’t want you to feel any of the above. The personal care retailer, in addition to its standard makeup services, launched Classes for Confidence a few years back: free sessions designed for specific communities, like cancer patients/survivors or those who identify as transgender or non-binary. In the historically exclusive beauty industry, Sephora stands out as a retailer that values diversity and strives to make every customer feel confident.

Fabletics puts shoppers in control

They buy approximately two times more than the browser, and they return less, too. And yet convincing customers to use the fitting room isn’t always easy: They don’t want the awkward half-dressed back-and-forth with a sales associate, don’t want to say their size out loud and don’t want to feel pressured into a purchase.

But Fabletics has cracked the code on an optimal fitting room experience. The activewear brand – which started as an online store and broke into physical retail in 2015 – has seamlessly merged the in-store and online retail experiences into an omnichannel one, while removing the awkwardness from it all.

Fitting rooms have mobile tablets — one on the outside of the door, one on the inside. The attending sales associate scans items the shopper brings in: Now the sizes, prices and even discounts are listed on the customer-facing tablet mounted inside (and already in their virtual shopping cart). Shoppers use the digital screen to request different sizes or items, get styling advice (an excellent tool for cross-selling) and sign up for the membership program. So employees follow the customer’s lead, giving both parties a more relaxed experience.

Always be collecting dots

Danny’s enlightened hospitality methodology also reminds us that we should ABCD: “always be collecting dots.” Dots = data; the more you have, the more personalized experience you can deliver.

Every interaction you have with a customer – new or returning, online through a chatbot or offline at your checkout counter, from their first time walking through your doors to their third purchase this month – can give you insight that will help you boost acquisition and retention.

Some of those dots will be personal anecdotes that help you form a more meaningful connection. Others could impact your greater business decisions (things like customer questions and initial reactions to products and displays).

Don’t skimp on this. Because if you don’t really understand your clientele, how can you cater to them? When you know them inside and out and then act on your findings, that’s how you get an edge.

Use technology to empower employees

One way to elevate the employee experience (and in turn, the customer one) is to make your staff feel empowered: Empowered to collect those dots, offer customer recommendations and make and close a sale on their own.

Unless you’re employing a tiny team of full-time sales reps in a small shop, it’s unrealistic to expect every employee to be familiar with every regular (even if that is the customer expectation). A point of sale with customer dashboards, though, can make doing so (or at least faking it!) easier. Heartland Retail POS’ customer management tools let sales associates collect the data most relevant to your store, from favorite brands and shoe size to kids’ names or social media handles. You can even use a custom notes section to track customer issues, exceptions granted to a return policy and general customer feedback.

Having this data at your (and your team’s) fingertips not only creates highly personalized interactions, but also assists with upselling. Look up a customer’s profile from any device to make recommendations based on purchase history or other data you’ve collected. Ask about their family and if they have any upcoming celebratory events to shop for. Keep an eye on their loyalty program status, so you can alert them of how close they are to their next reward or if they have any coupons to spend.

Connection + attention = retention

Many are quick to assume that the ultimate measure of retail success is profitability. But enlightened hospitality reminds us that success is so much more than that. When you make your staff feel good, your customers feel good. And when your customers feel good, they’re more likely to become frequent buyers, recommend you to friends and family and spend more. Likewise, when your employees are happy, they’re more likely to stick around for the long haul and recommend you as a prime employer.

Your goal as a retailer? Be more than a transaction. Create a culture and experience that makes your four walls a place where people know they matter and would miss if you were gone.

At Heartland, we’ve got retail customer and employee management solutions to help you do so, but few things are more valuable than hearing directly from those who have already walked in your shoes. Be sure to tune into our conversation with Danny Meyer, and for more inspiration from other entrepreneurs, head to The Entrepreneur’s Studio.

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