Retail Contrarian

Creating a Structured and Authentic Retail Experience

As you may already know, The Retail Contrarians firmly believe that retailers should use a systematic approach to engaging and selling customers. Canadian research company Verde Group along with the Baker Retailing Initiative at the Wharton Business School has a study He Shops, She Shops: Gender Differences in the Retail Shopping Experience that proves why it is important that employees be comfortable using such an approach to engage and sell their customers. 

The study found that men and women shoppers from 18 to 40 years old are far more attuned to employee insincerity than their older counterparts.  They are roughly twice as likely to decide that a sales associate seemed “phony” and was simply trying to make a sale.

While some might use this data to show why you don’t have a systematic approach, we disagree. Without a standard approach there’s no way a retail staff can maximize all of their customer opportunities. Our own shopping experience proves this day in and day out.

What this study does show is that we have to hire people who are comfortable learning to work with customers within a structured approach.  It also reminds us that our approach shouldn’t be so rigid or scripted that employees can’t be themselves.  It’s definitely a balancing act, but one worth doing.

There are a lot of other interesting elements in this study. If you’d like to download the executive overview from Verde Group, or you’d like to purchase the study you can do so at http://www.verdegroup.ca/report_teaser.htm.

Thanks to Mike Buckley at the Mine Your Own Business blog for first writing about this study.

Post-Holiday Returns and Exchanges = Incredible Sales Opportunities

Happy Day after Christmas! I hope and trust that those of you who celebrate Christmas had a fabulous day with family and friends. We had a splendid and relaxing day. The girls were excited that Santa Claus had put them on the "nice" list and left presents under our tree. We had a splendid dinner with extended family and a wonderful time was had by all.

Today retailers move into the third holiday season. The first season is Black Friday, the season of bargain hunters and lookers. The second season is the week before Christmas, the season of procrastinators.

The third season, which runs for the next ten days or so, is The Season of Me. Starting today, customers will be descending on your stores armed with gift cards, cash, and a strong desire to buy for their favorite person, themselves. Many of them will also have gifts that were purchased before Christmas to return and/or exchange.

Here's how to maximize this third season, The Season of Me.

* It's vital that everyone on the team understands that the next ten days offer great sales opportunities. Customers with returns and exchanges offer opportunity, not inconvenience. Think sales, not refunds.

* Be aggressive in turning returns and exchanges into additional sales. There are three common mistakes retailers make when it comes to holiday returns.

1. They assume the customer wants a refund. Wrong.

2. If the customer doesn't have a receipt, or they have a gift receipt, the retailer assumes that the customer will only spend the amount of the product they're returning. Wrong.

3. They assume that if they can just break even on the few days after Christmas they are doing well. Wrong.

Last year I shared with readers our Three 'I's with a Smile approach to handling returns. Do this and I'm sure you'll maximize your post-Holiday opportunities.

Intercept all customers before they get to the counter. Greet them with a warm smile, a heartfelt "welcome" and an offer to take the return from them. In most stores associates ignore customers with refunds, or at the very least just point them to the counter. This is not only a big mistake that ends up increasing the amount of returns, but makes the person with a return feel less important than person making a purchase. A store manager I once worked for told me that any retailer can make buying something a good experience for a customer, but it takes a great retailer to do the same with a return or an exchange. Try to engage the customer as close to the door as possible without making them feeling accosted.

Identify why the customer is making a return. Since you are assuming the customer will make an exchange (and quite possibly spend even more money,) listen carefully to what they say as you will gain information that will you help your next step be the correct one. One important thing you need to know is whether the person returning the product is the original buyer or received the item as a gift.

Influence the customer by suggesting or recommending products that better meet their needs than the product they are returning. The customer may object to this and state that he/she just wants a refund. With a smile and the information you've gained from your identify step you can easily try to overcome the objection by stating what you've learned from them. I think we owe to the customer and ourselves to always try and overcome at least one refund objection. This can save a retailer thousands of dollars in returns. If the customer objects again then of course you escort them to the counter and get their return handled cheerfully and efficiently.

You can download a Three 'I's with a Smile poster to use in the backroom here.

* A store manager once told me that a customer's disappointment is an individual problem that needs an individualized solution. As sure as Christmas comes every year, so do a few unhappy customers. When you're faced with an unhappy customer, listen carefully to what she has to say and don't determine your solution until she is done. Then look for the "individualized solution" that satisfies the customer and seems fair to you as well. My best advice is to do everything you possibly can to make your customers happy. I would consider it a failure if a customer stomps out of the store - unless you've let her do it because what she wanted was insanely out of line. Don't lose a customer for life unless her request would make her an unprofitable customer for life.

* Keep recommending products and suggesting additional products until the customer says he is done. Remember our all-you-can-eat-buffet approach? It is even more important during the Season of Me. I guarantee that most retailers will leave money on the table by being too quick to ring sales or do refunds. Be one of those retailers that takes the cash off the table and puts it into their pockets.

Never for that any retailer can make buying something a good experience for a customer, but it takes a GREAT retailer to do the same with a return or an exchange.

Have an awesome week.

My Best Management Lesson from Christmas Past

Every Christmas I’m reminded of one of the best management lessons I ever learned. It was 1989 and I was an assistant manager at The Sharper Image in Palm Beach Gardens, Florida. On the Sunday before Christmas we were mobbed from open to close; it was a record-breaking day.

Actually, the day had been a lot of fun, and the entire staff was in a good mood. All day the store manager, Keith, talked about the lobster dinner he was going to cook that night after work for some friends who were visiting. Keith, who was from New Orleans, had said to me, “Buddy, it’s going to be an exceptional dinner and evening.”

At the end of the day, I told him I would close out the register. While going through the closing out process, the system jammed up. Without thinking, I did the unthinkable:

I rebooted.

And to my utter disbelief and considerable horror, when the system booted up, every single sale from the day was gone. Every single sale vanished.

All I could think was that Keith was going to kill me.

Knowing how much Keith was looking forward to that lobster dinner, I dreaded the conversation we were about to have. I walked over to where he was feverishly cleaning and reluctantly told him that I had wiped out the entire day’s sales, and I would have to re-ring every single one. I quickly added that he could go on home to his dinner, and I would stay by myself and ring them.

He looked at me with a smile and said, “Buddy, things happen. The lobster can wait. Let’s get busy.”

About four hours later, well past the dinner hour, we finished the last transaction, and I closed out the register correctly. As we were leaving, I asked how he could be so calm about what happened. He looked at me and said, “An employee’s first mistake is always on me. Make the same mistake twice, and I won’t be so understanding. Time for me to go home and have some lobster. Merry Christmas, Doug.”

I replied, “Merry Christmas, Keith. Thank you for being so understanding.”

As I watched Keith walk down the mall hallway he turned, looked back at me, and yelled, “No problem buddy, the first mistake is always on me.” He turned the corner and headed home to his much anticipated lobster dinner.

The management lesson I learned from Keith that night is one of the best presents I’ve ever received. It’s one I gladly pass on to new managers. By claiming the first mistake for the employee, you allow the employee to grow and learn from his or her mistake.

We can’t learn from our mistakes if we’re worried about how much trouble we’re in when we make the mistake. People will almost invariably cause more damage covering up their mistakes than by the mistakes themselves. And, besides, for the most part, employees don’t make mistakes on purpose. I knew how to close out the register correctly but, that one time, I messed it up. On purpose? Of course not.

So the next time an employee makes a major mistake that causes your blood to boil, don’t yell. Practice this habit instead: Count to ten and repeat these words in a soothing voice: “Don’t worry. Things happen. The first mistake is always on me.”

Believe me, after hearing those words from Keith, I never ever made a mistake closing out the register again. I also became a better manager because of them.

Every Christmas, I think of Keith and the management lesson he taught me, and for that I am grateful. And wherever he is, I hope he is happy and still enjoying a lobster dinner.

Are your employees willing to admit to you that they’ve made a mistake?

Have a Merry Christmas and Happy Holiday buddy!

How's Your Santa Doing?

It was a few days before Christmas and it seemed like everything was going wrong. The biggest issue I had as the store manager of the Sharper Image store was that two stock guys quit right before Christmas. This created a real challenge since this store had multiple remote stockrooms on different floors.

We were already a bit challenged since some of my people were college students and we had agreed to let them leave to go home for the holidays. It was unusual to let people not work through Christmas but the rest of the team had agreed to work longer hours so these kids could go home. We had enough staff - we thought - except we weren't planning on being down stock guys.

I had been working some very long shifts and was getting pretty thin on patience and tolerance and what holiday spirit I'd had was long gone. The last thing I needed was to lose those stock guys. Without the stock guys we had to run for our own stock which required us to use a public set of stairs to the main remote stockroom.

The first time I had to run down the stairs to get product I was annoyed because a mother and her three children were blocking the bottom of the stairs. I rushed passed them and asked them to please move. I wouldn't say that I was gracious about it but I wasn't obnoxious either. I was really too busy to be either. A few minutes later I had to run down the stairs again and saw that the family had moved over to the side. This time I noticed that this was not a family who would normally shop in this upscale mall and had probably stopped in to get warm on their way somewhere else.

A few minutes later they came in the store and started to look around. I didn't pay much attention since we were busy and I knew they weren't going to buy anything. I was actually a little annoyed with them since it seemed the kids were always in the way when I was trying to show something to a customer. We had cleared out the rush and for a few minutes about the only people left in this store was this family. As they walked by me, one of the children said to the mother that he sure hoped Santa was going to bring him a remote control car like the one he had just played with. She put her arm around the child and said, "I'm sure you'll like whatever Santa brings you. Don't forget, Santa's had a tough year." And off they went, down the escalator and out the door.

Clearly the mother was preparing her children to not be disappointed with the presents she could afford to give them. All day I kept thinking over and over about what she said, "Santa's had a tough year." I realized that I was so wrapped up in work and my "challenges" that I had lost the spirit of the holiday. I was failing to see all the wonderful things in my life.

My Santa wasn't having a tough year at all. I had a great job, a terrific staff, a wonderful new wife, and an overall fabulous life. I had just gotten too busy to remember. As I walked to the train that night I made sure to throw a little something in every red bucket I could and give out a few extra dollars to the homeless. I may not have been able to help that family, but I did find my holiday spirit again.

Some fifteen years later I was walking through the same area with my family after enjoying a Boston Pops concerts and I couldn't help but think how blessed I am. I know you'll be insanely busy this weekend. I hope you take a moment to remember how well your Santa is doing. At that concert  Pops conductor Keith Lockhart asked Santa Claus what the true spirit of Christmas is. Santa replied that it isn't about the good things you do for others at Christmas time but the Christmas things you do for others the rest of the year. I do hope you and your staff can help someone else's Santa have a good year.

Five Thoughts For The Final Week Before Christmas

1. The biggest impediment to maximizing your sales is being too quick to ring.

2. The second biggest impediment to maximizing your sales is being too slow in getting the customer who is ready to go rung up and out the door.

3. Your best seller is whatever is in stock.

4. Give every customer a chance to add a giftcard to his/her purchase.

5. No matter where you stand for the month, you still have almost two weeks to blow away your goal.

The Gifts That Keep On Giving... Back to You

The holiday season is fast approaching its inevitable conclusion for another year. Hopefully your sales have been better than last year and your staff has delivered exceptional experiences that will turn your customers into loyal advocates. And hopefully you've had the opportunity to complete your personal yuletide duties. In addition to meeting your responsibilities to your family and friends, you've hopefully remembered to include your peripheral business associates in your holiday cheer. Consider how many individuals impact and support your business without being your direct customer. Of course, you should already include your employees in your year-end thanks. How about the FedEx/UPS/DHL courier who picks-up/delivers to your site every day? The janitorial staff? The postal worker? The bank tellers? How about the staff of neighboring stores? The caffeine king or queen who provides you with your first jolt of bean juice in the morning? If you're on a first-name basis with any of these people, do yourself a favor and include them as recipients when it comes time to hand out small gifts or cards. Heck, even if you're not on a first-name basis (and goodness, you should be) these folks you interact with regularly can become great advocates for you and your business.

What's that you say? You're already paying some of these folks for the privilege of your business? Well, of course you are. But thanking somebody for helping you to run your business is different than paying an invoice. And we're talking a token gift here, not a college endowment. In fact, many companies forbid their employees from accepting gifts above a certain dollar value. A personal note of thanks, a $5 gift card to the coffee hut, or some tchotchke is sufficient.

When you remember those who helped you succeed throughout the year, they'll continue to do so throughout the new year and beyond.

Predictions for Retail in the New Year (Plus One)

The National Retail Federation's Stores.com website recently published a list of predictions for the upcoming year in retail. While there were no real surprises (consumers will continue to shop despite threats of recession, "green" practices will continue to pervade the way retailers appeal to customers, shopping excursions will become less of an event for more shoppers), there were a few interesting points of interest and one glaring omission.

First, the interesting bits. While social networking remains a dominant activity on computers, its infiltration into portable devices (cell phones, smartphones, media players) will drive a need for retailers to provide a more proactive approach to engaging customers. When a customer is able to get their questions answered by referencing a website or personal expert via their handheld device while they're standing in front of the product, retailers will need to be able to communicate a compelling reason to buy from them.

Another interesting, if not perplexing, conundrum facing retail in the next year is the growing rate of consumers' paradoxical desires. As Stores.com puts it:

You know this guy, right? Installed solar panels on the roof of his home; insists on cutting his grass with a push mower; recycles with vengeance. Yet, parked in his driveway is a Hummer. Having trouble putting the pieces together? That’s the challenge retailers and marketers face.

The real challenge will be to provide an experience on the retail floor that appeals to all sides of this consumer's psyche. Expect to see more and more customer segmentation and personality profiling studies over the next twelve to eighteen months.

Finally, it looks like one prediction was left off of the list. It speaks to a few different items on the list, but it deserves to stand out on its own because it's something retailers can have direct control over so that it doesn't adversely affect their business. We predict that over the next twelve months, customers will continue to grow increasingly intolerant of unengaging store personnel. As time and money start to reach parity in terms of value and scarcity, and more and more retail employees are brought on board with little-to-no customer engagement skills development, the result will be more consumers turning to the web or other avenues for their purchasing, eroding the loyalty that's so valuable to growing a business.

Well, just like Ebenezer Scrooge was able to prove the Ghost of Christmas Future wrong by changing his ways, retailers can thwart this course to destruction by investing the resources into making their sales talent engagement specialists. The retailers that succeed beyond the next year will be the ones that have customers singing the praises of their people.

Heat Up the Holiday Sales and Not the Customers

During the holidays we need to be careful not to set the thermostat too high in the store, making it uncomfortable for the customers. Retailers would be shocked if they ever added up how many sales are lost because the store is too hot.

Retailers make the mistake of setting the temperature in the store based on what is comfortable for the staff, usually first thing in the morning. What they don’t take into account is that the customers are more bundled up and the store warms up as it fills with people.

We made this mistake one year when I was running a Sharper Image and a customer passed out right in front of the cashwrap. Talk about slowing down your sales. It's not easy to keep the sales going when you have to step over someone waiting for paramedics! Just kidding, we dragged them out of the way.

Managing your store’s cooling and heating is just as important as any other element of the customer experience. Heat up your sales, not your store.

Create a Fun and Profitable Store with Holiday Squares

It's hard to believe we have just two weekends left until Christmas. Most shoppers are now in a buying mood but with a little bit of extra effort from the staff you can help the customers complete even more of their shopping list in your store(s).

Here are some suggestions and ideas to ensure a fun and productive week or weekend.

1. Using assumptive language with your customers inevitably leads to more sales. Doing the same with your staff also leads to more sales.  When talking about the day or the upcoming weekend use very positive and assumptive language. "We are going to absolutely blow away goal this weekend." "We're going to be slammed." "The buyers will be out this weekend."

2. Whenever possible no backroom work; it's all hands on deck.  At this time a year a store can go from library quiet to rock and roll crazy in a matter of seconds.

3. Keep the checkout line move and grooving. Not only should all registers should be open and ringing away but someone should be assigned to engage the people in line. This is very important because people still have time to skip standing in line and go finish their shopping either online or in another store.

4. This week and weekend offers many opportunities to create additional sales if you're careful to not be just an order taker. One way to do that is to ensure people are selling and suggesting different products and/or product categories by playing Holiday Squares. To reward that behavior, take a large poster board in the backroom and divide it into 9 or 12 squares.  In each square write a product or category. You can also use a smaller copy of Holiday Squares at the counter by downloading the form.

For example, a wireless store might use the 12 square model and put 3 handsets in the first row, 3 accessories in the second row, different plans or services in the third row, and extended warranties and other additional offerings in the last row.

A women's accessory store might do product categories only.  Using the 9 square version the boxes might include handbags, luggage, shoes, sunglasses, earrings, necklaces, etc.

Whatever you do, it has to be easy for the staff to know and remember what they need to sell.  Every time a staff member makes the first sale in the box they put their initial. First person to sell something from every box wins. You can also arrange it so everyone wins a prize if they selling something from each box.  Or you can do both, where everyone wins but the first person wins something extra.  Obviously you'll need to personalize it to your store(s) based on how your staff schedule works, how competitive your team is, etc.  This little game is fun and will keep people suggesting additional products.

5. Consider giving out some goodie bags, candy, and other prizes to your staff throughout the weekend. Remember these equations:

Happy employees = Happy customers
Happy customers + Happy employees = Lots of sales
Happy customers + Happy employees + Lots of sales = Happy you!

Cashwrap Perceptions

We've all heard the saying "perception is reality."  Well, there is no place in a store where that's more true than at the cashwrap. 

What the customer sees while standing in line to pay has a HUGE impact on her/his experience.  One store I was in last week had 6-8 people in line to pay, two employees ringing sales, and five or so employees floating around the store. You could see the customers staring at the registers that weren't being used. Big mistake. 

Another store I visited appeared at first glance to be doing much better.  They had about the same number of people in line but this store had all three of their registers in use.  That was a good thing.  Unfortunately there were two members of management leaning on the counter behind the cashiers just watching the cashiers and talking among themselves.  So while they were smart to have all three registers open, managers standing there doing nothing to help move the line clearly has a negative impact on the customer's experience.  They should have helped bag product, talked to the people standing in line, or gotten the heck out of the customers' sight. 

Our customers should always feel that they are our first priority and this is especially true when they want to pay and leave.  It's vital that we manage both process and perception throughout the checkout process.