The No-Service Economy

For all the talk about the importance of service, it seems that retailers are going in the opposite direction. The "Wal-Mart-ization" of the retail industry puts low price ahead of anything else. It's fine for a no-frills operation like, well, Wal-Mart.

But as Dr. Jeffrey Pfeffer blogs, it has spread even to upscale retailers like Nordstrom's.

If service is so important, why is it so scarce? To me, it seems to be a vicious cycle. Retailer loses money. To cut cost, retailer cuts employees. Fewer employees means less service. Less service means lower customer satisfaction. Lower satisfaction means lower financial performance. And so it goes.