Retail Contrarian

Right Action + Extreme Focus = Desired Results

I spent most of Monday talking with retailers around the country to get a better feel for this past weekend and what it means for our clients and newsletter readers.

There's no doubt that the biggest difference we'll see this year versus last is a more cautious middle-income consumer.  They want to - and probably need to - stretch their dollars this year.  One retail executive I spoke to on Monday told me that in all his years being in stores on Black Friday he's never heard so many customers ask about what's on sale.

If you're a specialty retailer and you came anywhere close to your last year's Black Friday weekend numbers I consider that pretty darn good. I'd take it and move forward after the craziness of those "Midnight specials" and the "4:00 a.m. Doorbusters" from the discount retailers. Most of you can't and shouldn't compete with those Black Friday specials.  What you are competing for is those dollars the customer is going to spend going forward.  They're going to be cautious. They want value.  But most of all, they want to feel good about their purchase.

I firmly believe that most of your customers want to shop in a specialty store this season.  While your customers are also going to shop online or in a discount store, they still want to - and will - shop with you. Over 90% of all U.S. consumers are still shopping for the holidays!  And they still have a lot more to do.  The key to making this holiday a successful one is to execute when they come into your store.

So unless you're exclusively serving a high-income customer, chances are you need to have some good values in your store(s).  Beyond that, what's most important is that the staff knows and executes the critical actions for your business to succeed.  The days of just ringing sales is gone, or at the very least gone until the economy starts heating up again.

So let me ask, what are the three to five actions your employees must take with every single customer?  You have to be able to answer that or there's no way you are going to maximize your customer opportunities.

I'm not talking just about greeting customers, although that might be the first action on the list.  I'm talking about the actions they need to take to create a sale.  It might be getting a product into a customer's hands or on their feet.  It might be to say "when" not "if."  It could be saying "let me show you this" instead of asking "is there anything else?"

Actions alone aren't enough, though.  You and your staff need to stay extremely focused this year.  In one store I visited yesterday the staff was so busy stocking the store and straightening up that they totally ignored me.  I wanted to shout, "People! You can't afford to miss me.  Focus on the customer!"

My greatest concern for this holiday is the challenges that regional and independent retailers may have.  I am positive that retailers like the one above will not make their sales numbers.

No actions + No focus = Poor results

So what's your actions? Even more important, does your team know and do it?

I recommend you spend the next few days with your staff sharpening their ability to execute right actions with extreme focus so you can achieve your desired results.

Let it Snow (Money)

A few months ago Doug wrote about a promotion being run by Boston-area retailer Jordan's Furniture which involved a full refund of purchases customers made within a specific timeframe if the Boston Red Sox won the World Series.  Well, we all know what happened with the Sox, and evidently Jordan's has cashed in their insurance policy to make good on their promise.  Everyone wins!

Now, a local jewelry store has implemented a similar promotion.  Springer's Jewelers (with three locations in Maine and New Hampshire) has decreed that if more than six inches of snow falls on Christmas Day at their Portsmouth, NH location (smart move, considering that location probably gets less snowfall than the Maine stores), any and all purchases made and paid in full between November 23rd and December 8th will be refunded, assuming the purchaser has followed the myriad rules and regulations that dictate the promotion.

This type of "conditional rebate" promotion is becoming more common among specialty retailers.  Do a Google search for "conditional rebates" and look at the growing number of companies that will sell a retailer insurance to cover the off-chance they have to pay out. It's promotions like these that let specialty retailers differentiate themselves from their Big Box competitors, and, at the very least, encourage visits by new customers.

Just like with Jordan's, Springer's is a specialty retailer with limited locations, doing something to not only drum up business and make sales, but to create a buzz.  Jewelry stores, like furniture stores, are plentiful to the point of over-saturating some markets.  This promotion makes Springer's stand out, gets people talking about them, and drives traffic into the stores.  I'm sure a lot of shoppers who hadn't considered buying their loved ones a piece of fine jewelry or a watch for the holidays will now consider spending a few bucks there, in the off chance Jack Frost delivers on December 25th.

I’ll Take Some Jeers with Those Black Friday Cheers

While I may be a Contrarian on many points, I try to stay extremely upbeat when it comes to holiday forecast and sales results. But while everyone is cheering the Black Friday weekend results, I don’t like what I’m seeing. Here’s why.

1) Average spending is down. Clearly the consumer was extremely focused on what they were going to buy. I believe that is going to continue throughout the holiday and as a result we’re likely to see a hefty decrease in impulse purchases. Will we actually see less gift cards sold this year? I hope not but wouldn’t be surprised.

2) Number of people shopping on Black Friday, especially before 4:00 a.m. Are more consumers doing this for fun or because they feel they need to? Yes it is fun for some people, but I believe a lot more people want or need to stretch their holiday dollars this year. I still can’t think of anything worse than 4:00 a.m. shopping. Oh wait, midnight madness. That’s worse by four hours.

3) The 10% increase in the number of consumers who shopped in a discount store this year compared to last. This one really worries me. Yes it’s good for Target, Wal-Mart, Best Buy, and other big box discounters. But I’m worried that this could be at the expense of the regional and local independents. I spoke with a lot of retailers today and almost across the board the independents had a disappointing weekend.

I am really concerned about the regional and independent retailers this year. They have no room for error. The good old days of opening the door during the holidays and making easy sales are gone. Giving “service” won’t be enough. They absolutely must nail every customer opportunity by delivering a great experience that results in a sale.

Holiday 2007 is either sell it cheap or sell it better. There’s nothing in-between.

We're Off and Running

Black Friday officially got underway here at midnight on the east coast and, true to form, the Retail Contrarians were asleep.  But after speaking with some retailers and reviewing early news stories it appears that the initial wave of shoppers was pretty strong.  Here's the big question: Will the shoppers keep coming? If I'm stuck in a traffic jam trying to get into an outlet center at 1:00 a.m., will I keep shopping as the day goes on?  I think many people are going to head home to either go to bed or regain their sanity. Don't be surprised if the weekend is a bit of a disappointment for many retailers.

The Wall Street Journal reports that investors await signs of how well retailers might fare during the holiday shopping season. Let's get this straight....how retailers do today tells us nothing about the holiday season as a whole. It did, years ago, before "Midnight Madness" and "4:00 am. Doorbusters" became big events, but those days are gone. The only thing investors will really learn after this weekend is who won the media competition and bragging rights for the day after Thanksgiving.

In New York City and many other places around the country the holiday shopping season actually got underway on Thanksgiving Day. Bah, humbug!  As you can imagine, we've been outspoken about non-food stores being open on Thanksgiving Day.  Here are articles from both The New York Times and The Philadelpha Daily News with our comments about this pernicious practice.

25 Ways to a Stress-Free and Enjoyable Holiday

Here are 25 ways that retail employees can have a stress-free and enjoyable holiday.

1. Get your own holiday shopping done early.  There's nothing worse than having to go shopping on your days off or lunch hour.  Go shopping because you want to, not because you need to.

2. Invest in some new shoes if your current pair is worn or not comfortable.  Happy feet make for a happy you.

3. Skip the food court and bring something special for lunch or dinner.  Plan your meals for the entire week and have one less thing to think about before work.

4. Get your November and December errands out of the way now.  The last thing you want to do on your day off in December is to hang around waiting for your car to be tuned up or be sitting in a dentist's chair.

5. Plan one or two "All About Me" days off during December.  Some people might want to treat themselves to a massage or a getting a manicure and pedicure.  Others might stock up on junk food and movies and stay in bed all day.  The key is to chill out and give yourself some very necessary R&R.

6. Leave home early to give yourself plenty of time to get to work.  Those extra minutes can ensure a stress-free start to your workday.

7. Don't skip the things that keep you centered.  Whether it's church, the gym, Starbucks, or whatever else it may be, don't be too tired to do what you like to do.

8. Don't overindulge in the sweets.  It's pretty easy to eat your way through the holidays.  The problem is that you keep eating the stuff even when you're not hungry and the sugar crash is ugly.

9. Don't skip your breaks. They're extremely important to being productive and having a good attitude.  Refrain from bothering anyone who is on break unless it's a matter that absolutely can't wait.

10. Use your iPod during your breaks to take a breather from the hustle and bustle.

11. Try to do something nice for someone else every day.  Don't tell anyone else.

12. Drink plenty of water. Don't over-caffeinate yourself.  Yeah, yeah, I know we retailers run on caffeine, but too much of it actually leaves you ragged and edgy.

13. Be a resource and mentor for seasonal hires.

14. Ask to take five minutes off the floor when you get that crazy and overwhelmed feeling.  Even better, suggest a five minute breather to a co-worker who clearly needs it.

15. Keep smiling. The best part about giving smiles is that you get them in return.

16. Organize a food drive or a Toys for Tots collection in the store.

17. Get plenty of sleep. As you get closer to Christmas and the mall/store hours get even longer, managers should try to avoid scheduling people to open after they've closed the night before.

18. Don't lose control of your store.  No matter how busy the store gets, as long as the team works together and stays focused on moving customers through you'll never lose control.

19. Don't take things personally, especially when dealing with an unhappy customer.  As a friend of mine says, don't let other people's character defects bring out your own.  Fix the problem and move on.

20. Keep conversations with your co-workers positive and upbeat.  Don't participate in gossip and negativity.  Suggest others stop when you hear it.

21. Make an effort to leave work at work. I knew a manager who always clapped her hands when she walked out the door at the end of a shift. It was her way of physically moving from work mode to personal life mode.

22. Never be so busy on the floor that you don't take a moment to know your customer a bit better or do something a little extra special.

23. Have something to give to the children who come into the store.  Making a child happy is one of the best stress removers I know.  Those of you who don't like kids, think of the gift as small treat that will keep them quiet and get them out of the store sooner.   

24. Focus on the spirit of the holiday.  If you're in a mall, walk down and watch the kids as they get ready to get on Santa's lap. (Don't watch the ones in line who are still more than an hour away from Santa. That's never pretty.)

25. Have fun. It's pretty hard to be stressed when you're bent on having fun.

26. Go a little above and beyond whenever you can.

Shopping Under the Influence – Creating the Holiday Sales “Buzz”

The Cleveland Plain Dealer has a pretty funny article on the perils of SUI – shopping under the influence. Since The Retail Contrarian is a retailer’s blog we’ll use the article Guilty of SUI? to discuss the strategy of selling to the customer who is buzzed.

The article shares some examples of people shopping under the influence including an example I shared from my days of running a Sharper Image at Faneuil Hall Marketplace in Boston. But the article also point out there are some actual benefits to the customer to drink and shop.

“Still, sipping while shopping is not always a bad thing. A drink can help you relax, loosening you up to finally treat yourself to a new gadget or outfit.”

There you have it. Helping people who are buzzed buy things is our civic duty.

As a matter of fact lingerie stores have used this strategy for years with their Men’s Night promotion. Then again that might be called shopping under the influence of alcohol and lust.

Which is Worse...

We here at the Red Friday Coalition recently received a report from a casualty of a Big Box retailer's November-long tactics to get customers into their stores. It seems that this potential customer found the Big Box's offer of a new High-Definition DVD player too good to pass up. Imagine, a $300 next-generation movie machine for only $199, plus two free movies in the box, three more free movies (customer's choice) at check-out, and five more free movies by mail-in rebate! Even his wife was willing to let him spend the money.

Unfortunately, there was a higher price to be paid in the form of indifferent, poorly prepared and trained store employees. The first challenge was to find the product. Despite there being at least a dozen associates in the electronics department, they all looked, moved, and acted as if they were well-occupied with activities more important than selling. When the customer finally had the chance to inquire about the DVD player, one associate pointed him to a display that turned up empty. Another confidently stated that the store didn't carry that model. The third took the time to find the product and confirm the sale price, but then disappeared after handing the box to the customer and instructing him to pay at the register.

The second challenge was to confirm the offer of three free DVDs. Evidently nobody in the store was aware of the offer despite the ad appearing in that Sunday's circular. The cashier had no knowledge of it, so she called a supervisor. The supervisor was equally flummoxed, and called an associate from the electronics department. The associate called the department supervisor, who finally looked at the circular sitting next to cash register and confirmed the deal.

Nearly ninety minutes after entering the store, the intrepid customer walked out with his new high definition DVD player and free movies. He also left with a new understanding of the old line (often attributed to Jimmy Buffett): "Which is worse, ignorance or apathy? I don't know and I don't care."

The Season is Only for Giving and Receiving

Once a year or so I try to write something about internal theft.  Last year by accident I did it on Valentine's Day.  I'm sure there is something very Freudian there so I vowed to never make that mistake again.

Like many things in life, internal theft is not an enjoyable topic but one that's important to talk about. If you'd rather skip this topic then just delete this email and I'll talk with you next week about the 25 Keys to Having a Stress-Free Holiday.

Please don't take offense that the manager or owner asked you to read this newsletter. According to the National Retail Federation's annual Retail Security Survey, nearly 50% of the $41.6 billion dollars lost by retailers was from employee theft. The exact loss for 2006 was $19.5 billion. Yikes.

But why do this right before the holidays you ask?  With the influx of seasonal employees and the added pressures on all us during the holidays, it's just a good time to have our annual discussion on this touchy subject. And afterwards we can move on enjoy the season.

Now I don't know about you, but whenever I worked in a store and we discussed internal theft I almost always got worked up. Either I was mad because I felt I was being accused of something or I was ready to confess to taking the pencil home by accident.

Whenever I do bring this topic up it seems everyone always says they've never done it and most people will even say they've never even thought about stealing something.  I'm not sure I completely believe them but who am I to say different.

Here's the deal.  Stealing anything from work is about the stupidest thing we could ever do. 

I think it's human nature for us to consider doing something we know we shouldn't do.  I can't be the only person in the world who has had those arguments between the devil on one shoulder and the angel on the other!  Okay, I've been watching too many old cartoons but throughout my years in retail from time to time the thought would occasionally occur to me that maybe I could "borrow" something from the store.  Of course I didn't consider it stealing because I wasn't that type of person.

And 99.9% of the time I'm not that type of person.  But when I was tired or felt underappreciated by my manager or was thinking I was underpaid, these thoughts entered my mind.  It happens. Luckily for me I would either think through the consequences or hear the voice inside of one of my parents or grandparents and that would stop the dangerous thinking.

The sad fact is that I've met a lot of people who didn't think through those consequences or listen to any voices inside them telling them to stop.  I've seen lives shattered because of one wrong decision at work.  I've shared with my Daily Retail Experience readers about having to fire a favorite cashier as well as employees I had become quite friendly with.

There was the store manager I knew who was arrested and taken out of the store in handcuffs in full view of his staff.  Company representatives and the police went to his home and confiscated the stolen products. Those stolen products included jewelry he had given his wife, toys he had given his son, clothing he had worn, and other items used in the home.  Unfortunately, I could go on and on about the details of people I know whose lives were negatively impacted because of a bad choice.

Last year when I wrote about this topic in my Daily I got an email from a reader who shared that he/she had been stealing from the company he/she worked at for a long time.  He/she started out taking small things and over time seemed to do it more and more. They don't know why. The person shared how embarrassed and ashamed they were, and worried about what would happen if they got caught. Something they should be worried about.

If you're one of those people who have never had the urge to help yourself when an opportunity presents itself, my hat is off to you.  Keep it up and I hope the temptation never arises.

If you're like a lot of people in retail who on that rare occasion has a fleeting thought about doing something they know they shouldn't do, don't be concerned.  It's nothing but a fleeting thought.  Let it go and be thankful you didn't cross over that line.  There's a high price to pay if you do.

And if you're someone who has crossed that line, don't do it again. There's not a thing in the store or any amount of money worth what you will experience if you get caught.  Your life will be forever altered if you're caught.  And trust me, there's a good chance you will be caught.

The reader who sent me the email about currently stealing in their store ended by saying this, "I was once an honest person and I don't know how that changed but I'm determined to change back." 

I don't know if that person still receives our Daily newsletter or not.  I hope they do, and I hope they changed.  With internal theft we rarely get a second chance from the company but we can always give ourselves another chance so we never have to worry about it again.

Lest we never forget that the holiday is for giving and receiving, not taking.

This concludes this bummer of a topic. Have a great week.

A Happy Wal-Mart is a Good Thing

Wal-Mart reported an almost 8% in net profit for the third quarter on a comp-store sales increase of 1.5%.  While most of us either don't care about Wal-Mart's performance or we're rooting for them to do poorly, good news from Wal-Mart helps the press shift away from the doom and gloom holiday stories. 

It's clear that they are giving up on their quest to move up-market to a more affluent customer and are focused on doing what they do well.  For most of readers of this blog that's a good thing since you serve that more affluent customer base.

Join the Red Friday Coalition

Check out our posting Red Is The New Black for our tongue in cheek movement for retailers who want to quit the Black Friday madness.