How small retailers can leverage customer service to remain competitive this holiday season

Small retailers may have to step up their customer service standards this holiday season, as the shopping environment and personal touch of a local merchant may be the only advantages they have over their large competitors.

Small retailers may have to step up their customer service standards this holiday season, as the shopping environment and personal touch of a local merchant may be the only advantages they have over their large competitors.

However, as recent studies have shown the importance of customer service in a retail environment, large companies have been ramping up their customer service standards as well. American Express released a report earlier this year that found 70 percent of Americans are willing to pay up to 13 percent more with brands that they see as providing quality customer service.

What's more, a recent Manta study found 38 percent of small businesses reporting improved sales from last year. These findings should incite small merchants to consider their own marketing and service standards as the shopping season kicks into full gear. For example, how is your store or service unique in regards to the competition? Are the higher prices justified? Are customers returning for your services and shopping experience?

"When customers shop locally, there are also green benefits of not having to have things shipped across the country," Greg Garrick, vice president of marketing at Manta, told Inc. magazine. Local retailers can highlight these benefits in their marketing strategies, while reinforcing them on the customer service front.

However, as consumer sentiment tends to fluctuate from season to season, merchants also need to understand what makes this year different from past years. Foremost, pessimism over the economy is worse than it was a year ago, meaning consumers are likely to be more frugal about their decisions. A number of other surveys have clearly suggested that this year's sales figures will not match the record-highs of 2010, but revenues are still expected to soar.

Another way that this year is different than last is in the volume of technology available to the average consumer. Smartphones, tablet computers, QR codes and social media, among other innovations, allow customers to conduct in-store research and inform themselves on better deals and superior products. Furthermore, advances in transaction technologies, such as mobile payment and near field communications, point out the need for retailers to address consumer demands with updated pricing structures, payment options and service standards.