Retail Contrarian

The Self-Inflicted Economic Slowdown

Excuse me while I rant. On Saturday my daughter and I went shopping. The center was packed with barely a parking space to be found. I guess nobody told these shoppers that we are supposed to be in the midst of an economic slowdown. The only slowdowns I saw were by the staffs of almost every store we went into. 

My shopping experience was nothing short of pitiful. The first store Kate and I went into couldn’t be more than 800 square feet.  Three employees working and all three of them completely ignored us. It’s almost impossible to ignore customers in such a small store but they managed.  Since this store sells premium frozen meats it’s not like we weren't easy to greet and engage.  But nope, the staff talked among themselves and possibly even missed a sale. Yep, there’s a slowdown alright.

The next store was a company-owned athletic shoe and apparel store. The most engaging part of our experience was when an employee looked up from the computer, said “How’s it going?” and then went back to looking at the screen without waiting for an answer.  Never acknowledged us again. Yep, there’s a slowdown alright.

The next store I figured would be different since it is a partnership between a cable company and an consumer electronics retailer. We walked into a surprisingly quiet store, which we didn’t expect given the number of televisions and home theater systems surrounding us.  We were immediately approached with a “May I help you?”  What could I say but “Just looking?”  It seems to me that you might ask me questions about my cable provider or if I have HD.  But no, she went back and hung out with the five other employees doing nothing. Yep, there’s a slowdown alright.

We hoped in the car and went to another shopping center.  This one was more crowded than the first one.  Yep, there’s a slowdown alright. 

It was here that we had by far our best experience. The staff was attentive, engaging, and helpful.  You won’t be surprised to learn that it’s also where we made our only purchase of the day. It’s also the only big box store we shopped at. That’s right, the only store where we received a high quality engaging store experience from the staff was at the Sports Authority store in Woburn, Mass.  In every department we walked into there was a staff person who acknowledged us, engaged us, and was genuinely interested in us as shoppers. At a big box store!!

I don’t think there is a specialty retailer out there who can afford to ignore their customers and not attempt to create a sale, but that happened to me on Saturday time and time again. Yep, there’s a slowdown alright, and on Saturday it was mostly taking place in specialty stores.

Come on guys, we need to put the “special” back in specialty stores and quit causing our own self-inflicted slowdown. Remember, we win and lose with what happens between the staff and our customer. Do that well and you will overcome any economic challenges and have a great year at the expense of your self-inflicting competitors.

Investing in Beyond Sorry

Last month I was in San Antonio to speak at the National Association of College Store's annual show. I was supposed to stay at a brand-new Hyatt hotel but due to construction delays it wasn't open yet.  I was moved to the Marriott hotel across the street and when I checked in I was given an envelope from the Hyatt.  In the envelope was a letter from the Hyatt general manager apologizing for any inconvenience - and a $100 American Express gift card. It was a wonderful gesture and a smart investment.

It's one thing to say you're sorry; it's another to ease the customer's inconvenience.

I sought out the Hyatt manager at the Convention Center and thanked him for Hyatt's generosity.  I have already told at least 10 people about this and with told thousands in my daily newsletter The Daily Retail Experience. And the next time I'm in San Antonio you can bet I'm staying at the Hyatt. Smart investment, that easing the inconvenience

Go beyond "sorry" and invest in easing your customer's inconvenience.  Remember, a customer is a terrible thing to waste!

Helping Customers Trade Up Not Down

According to Retailing Today, a survey by AlixPartners of more than 7,400 consumers, shoppers are keeping low cost in mind when making purchasing decisions. The survey found that pricing is now important to consumers at all income levels, and all were likely to shift "one level down" in terms of the type of stores they shop, with aspirational high-end retail shoppers shifting down to department stores, department store shoppers now buying at mass-market stores and so on.

I have a bit of trouble with the "all were likely to shift" comment since it makes it sound like customers are all engaged in some sort of mass exodus.  But there is no doubt that some customers may have to trade down and others are at least considering trading down.

Does this mean that every retailer needs to drop their prices or risk losing their customers?  Of course not. What it does mean that our employees must be able to articulate the value of our products to our customers so they don't consider trading down. It also means that we do need to price products with a sharp pencil. 

Consider focusing on attributes like durability and versatility.  This is usually a secondary consideration for customers but could now be a key driver in their decision process. When showing a woman a piece of jewelry a retailer might point out that the piece can be worn with both casual and formal attire.  Or if a retailer is showing a jacket or a handbag they might point out that many customers continue to enjoy their jacket or handbag for many years.

Help your customer picture the use and pleasure the product will bring them. I believe many customers trade down because some retailers are treating the products like a commodity. Treat every product and every purchase like something special - because it is.  For example, if a woman is looking at a silk dress you could find out where she's planning to wear it and talk with her about the place or event.  This is the hardest value to articulate to the customer but also the most effective.

Get the product in the customer's hands and demonstrate its value. Open up that luggage and have them unzip some special compartment.  Get the phone in their hand and have them call someone.  Have the customer open and close those premium pruning shears, just watch your hair!  I bring this up time and time again because time and time again I see people miss this chance to demonstrate a product's value and transfer ownership.

Though some customers might trade down, continue to show the customer the best product that meets their needs first.  While a retailer might be tempted to show their lowest priced product first, that's really unfair to the customer.  Always lead with the best and, based on the customer's reaction, you can move to a less expensive product if it's appropriate.

Remember that if a few of your customers trade down, so are some other retailer's customers as well. So make sure you continue to deliver the best experience all customers will receive that day.  No matter what, customers will always want to do business with a retailer that respects them, appreciates them, and makes them feel good. Add a great value on top of those things and you, my friend, just made a sale.

Making Sales by Stimulating the Senses

When I was a little kid my dad owned and operated several movie theaters.  He'd been in that business for many years, and his office was full of relics from the golden age of Hollywood - though most of them were from the exhibitor's point-of-view.  One of my favorites was a handbook of sorts for successfully running a concession stand.  It was really nothing more than a collection of best practices from theater owners all over the country, collected, typed up onto fifty or so pages, and bound with three brass clasps along the left margin.  I can remember rifling through the pages and learning all about how the way a snack bar was merchandised, presented, and staffed could have a positive effect on the amount of money people would spend.

One of the things that always stuck with me was the recommendation that popcorn be popped while customers were waiting for the movie to begin.  This flew in the face of conventional wisdom that dictated you pop your corn when there were no customers around so you wouldn't be too busy to tend to customers.  However, the smell of freshly popped popcorn and the visual of it bursting out of the popper would send customers into a buying frenzy, enticing even those who already had their Ju-Ju-Bees and Coke into buying a bucket.  And do you know what?  It worked. 

Today, we know for a fact that we can influence buying by stimulating more senses simultaneously.  Show somebody a product, and they might have an interest in it.  Let them touch, hear, smell, and maybe even taste the same product, and the level of interest rises into a level of desire.  This has worked especially well in the food industry with free samples, and it's a staple of the automotive industry where a test drive lets you feel all the aspects of the vehicle, smell the new-car smell, and hear the solid THUNK of the door as you close it. 

So, here's an opportunity for you.  Look around your store.  What are you doing to stimulate more of your customers' senses?  Is your background music conducive to your brand and products?  What does your store smell like?  Can customers touch the products?  Is the lighting effective in showing off merchandise?

You probably won't be able to stimulate all the senses, and depending on what you're selling, you might not want to.  But if you focus on stimulating more of the senses than you are now, you'll find customers' interest levels rising.

Okay, I've got to go get my popcorn.

What Does the Staff Own?

One of the complaints I often hear from retail executives, owners, and managers is that their employees don't take enough ownership in the business.  I always respond with the same question, "What have you given them to own?"

Doing what they're told to do is not ownership.  Owning is being responsible for something and then figuring out what to actually do. I like to see stores have every employee responsible for some function or area. Get them involved! Have them make some decisions and try new things, and maybe even make a mistake or two.

I suggested this to one retailer and she said, "Oh I can't ask a part-timer to do that."  Sure you can. Your customers don't know who is part-time and who is full-time.  They rarely know who is a manager and who isn't. All they know - all they need to know - is if they have a good experience or not.

So let me ask, what do your people own?

An Education from the Observation

One of my favorite parts of my job is spending time with owners and executives in their stores observing how the staff goes about their business.  Sometimes improving some of the smallest details can pay some of the biggest dividends.  I decided today to share with you some of my observations from a recent store visit. 

* One employee always positioned herself in approximately the middle of the store so she could greet and engage customers from where she was standing.  Another staff member stayed closer to the counter that was in the back of the store.  To greet and engage the customer she had to walk towards them.  It was interesting to see that customers were more open and friendly to the staff member who didn't have to physically move towards them.  I'm not sure I ever noticed the difference before but you could see how much more defensive the customer became when an employee walked towards them.

* The owner had coached the team to focus on making multi-unit sales. One thing we observed is that about half of the team would tell the customer about an additional product while walking towards the counter.  The other half transitioned to an additional product in the same spot or led the customer to a different place in the store.  When we looked at the historical units per transaction averages for the staff it wasn't surprising to see that most of those who tried to talk about a second product while going to the counter had the lowest average.

* I've talked about this one a lot but it was fun to see in person. The best salesperson always got the product into the customer's hand.  It was obviously second nature to her because I'm not sure I ever saw her hold a product except for the brief moment it took to pick it up and hand it to the customer. We observed that the less productive salespeople had a tendency to point at products or just stand in front of them but rarely got them into the customer's hands.

* I was really impressed with one woman's ability to engage customers who said they were just looking. She would welcome and engage a person and whenever they said they were just looking she responded by thanking them for coming in and giving them a 10-second overview of what made the store unique. What made this woman's approach stand out is that she never took it personally or became defensive when the customer said they were just looking.  As a matter of fact her enthusiasm level was where it would be if the customer had just said he would take one of everything in the store. We compared that to other employees, whose energy level dropped and approach changed if the customer said they were just looking.

* One thing the entire team did well was to reinforce the customer's purchase during the checkout. This is a skill that the owner had clearly spent time teaching her staff.  Every single customer walked out of the store not just believing but knowing that they had made a good purchase.  I really liked when they linked it back to something they had learned from the customer when asking questions.  Not surprisingly, this store's return rate is extremely low.

I think the owner was quite surprised what we could learn in just a few hours. It's not that these things are terribly hard to see but you have to look for them and then put what you've learned into improving your team.

So let me ask, when did your team last spend time observing the fine details of each other’s sales and experience approach?  I think you'll be amazed at what you can learn that will improve your store and your overall sales.

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An Education From the Observation in Your Store

Send us an email with “Tell me more” and I’ll share how you can receive your own education from the observations in your store with our Store Visit service.

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Loss Prevention Hits Home For One Reader

Here's a note from one of my Daily Retail Experience newsletter reader that is a good reminder about loss prevention.

Hi Doug. It is with a broken heart that I'm writing to tell you I just terminated my assistant manager for stealing. I only discovered the theft when a friend of mine called and told me that she didn't think the cash purchase she made at my store was rung through the register. I audited that day's register journal and discovered that my friend's sale had not been rung up. I also saw that the register drawer had been opened numerous times by the assistant without making a sale.

Whenever you wrote about internal theft I never believed it could happen in my store. Now I can't believe how long it went on without me knowing about it. I'm embarrassed to tell you how much I lost and I wouldn't have discovered it if my friend hadn't alerted me. Please tell all of your readers to know that it really could happen to them.

I guess I don't have to, I think this owner did a good job herself.  Remember the old advice, the only people who can steal from you are the ones you trust so much you don't believe you need to have a loss prevention systems in place or execute the one you have.

This owner would have discovered her employee's dishonesty a long time ago if she had been auditing her daily sales, something everyone should be doing. 

Retail Employees Wearing Campaign Buttons

The presidential primary campaign was in full swing during my recent visit to San Antonio and I was surprised to see a Brookstone employee wearing a campaign button while at work. I'm all for getting involved in the political process - but not sure we should while on the job. I even heard one customer comment that he wouldn't buy anything from that person even if he really wanted to purchase it. Guess he wasn't a Hillary fan.

Making goal can be challenging enough without turning a certain percentage of customers off. Why risk it?

Am I off base here or do you agree that campaign buttons shouldn't be worn at work?

Coaching Sales to Success

One thing I've learned is that high-performing store managers and owners are extremely focused on being good sales coaches. I see some managers and owners who are good people coaches and have strong business skills but their stores never reach the desired level of performance because they fall short in coaching sales.

One of the mistakes I made when I first became a district manager was rewarding strong operationally focused managers before those who were more sales focused. While running an operationally sound store is certainly important, I now see that a manager/owner needs to be focused more on coaching sales than running a perfect store.

Here are some of the activities I see those high-performing sales coaches carry out on a regular basis:

1. They coach each individual - as well as the team - to perform at a peak level. Many managers have a tendency to coach the team as a whole but unless they work with each individual the team will never reach that next level.

2. They regularly meet with each individual as well as the team.  High-performing managers and owners know that constantly communicating with their team is key to their success. Taking time to meet one-on-one with their team at least once a month pays huge dividends. They use the time to discuss the employee's strengths as well as those areas that need improvement.  A mentor of mine once told me that if every employee doesn't know what areas they need to work to improve then you're not effectively coaching your team.

They also have a monthly staff meeting that no one would dream of missing.  Those meetings are used to improve the team's teamwork and performance by focusing on training and business development. These managers/owners never use this meeting to communicate information that transmitted in a memo or one-on-one.  Having the team all together is so valuable that the time should never be used for anything except improving the team and business results.

3. High-performing sales coaches have their team focused on the behaviors that improve sales performance. The key word is behaviors.  High-performing sales coaches know that right behavior drives the desired results.   Just talking about the desired results isn't enough; you have to teach people what those behaviors are.  I have sat through countless rah-rah meetings where a manger/owner went on and on about making goal but never once said what the team needed to do to achieve it.

In sports, before every game a coach will meet with his/her team and tell them what they need to do to win.  They don't just say "Go win the game," the players already know that; they tell them how to win.

4. They spend a lot of time on practice and feedback, feedback and practice. High-performing sales coaches never miss a chance to praise an employee and tell them what they could do better.  They find the time to roleplay every day until it becomes second nature to the team.

So let me ask, are you a strong sales coach?

Return and Shipping Policies

Whenever sales are a bit tight it seems so many retailers do the same with their return and shipping policies. Looking to save a dollar here and there, they instruct their stores to "hold to the policy" and cut their customer very little slack.

The problem is they should be doing the opposite!

Whenever the sales environment becomes a little challenging we should become even more liberal with our returns and shipping policies. I'd rather eat a little margin than not make a sale. I'd rather take a product back or do an exchange that's outside the official timeframe than lose a customer.

Now that I think about it, I don't care how sales are, stores who tip their policies and procedures in the customer's favor will win. Period.