Retail Contrarian

Four Months and Counting

Around here on the week of the 25th of August most people are thinking about summer winding down and the kids heading back to school. But I know what you're thinking. . . . it's only four months to Christmas!  That may seem far away to most people but we retailers know it will be here before we know it.  We'd better be ready.

Here are some of my predictions, thoughts, and tips to prepare for the 2008 holiday season.

1. My 2008 prediction. While most pundits and experts will be predicting holiday shopping season that falls somewhere between soft and disastrous, I'm taking a different route.  I'm predicting that (short of some catastrophic event beyond human comprehension) there will be a holiday season.  That's right; I'm going out on a limb and predicting that we will indeed have a holiday season in 2008.

Since we know the holiday is coming, why not plan to make it a successful one?  Why go into the holiday not planning to succeed?  Here's my advice: Look at your 2007 holiday results, review how you're trending over the last eight months, then create a realistic stretch goal. Don't plan low, don't plan unrealistically high, but do plan to be successful.

2. Be very picky about your seasonal hiring.  One of the upsides of this "challenging" economy will be the higher number of quality people in the seasonal hiring pool. People who either would not have considered a second job or are re-entering the workforce will be looking for a holiday opportunity.  You might as well be the person to give it to them - if they have the makings of great employees.

Don't settle for a run-of-the-mill carbon-based life form when you can hire people who will help you achieve your planned success. And don't be afraid of hiring highly-, if not over-, qualified applicants. Some of my best seasonal hires have been pharmaceutical salespeople, bankers, and college professors.  As with every holiday season, be aggressive in seeking out qualified applicants and wrap up your seasonal hires as early as possible.

3. Use this holiday to successfully steal your competitor's customers. We're calling this year the Beg, Borrow, or Steal Holiday Season.  Retailers without unique products, enticing store events, or a differentiated store experience engaging events will Beg for shoppers to no avail.  There are too many options available to consumers for them to settle for shopping in boring me-too stores. Those are the retailers likely to lose their own customers this holiday season.

Other retailers will successfully Borrow their competitor's customers by advertising rock-bottom low prices.  While this may create a short-term sales bump, unless the retailer can profit from this approach the benefit will be extremely short-lived.  January and February could be littered with broken-down retailers who tried to Borrow their way through the holidays.

The most successful retailers will use the 2008 holiday season to Steal their competitor's customers.  Attracting customers through a blend of unique products, compelling events, and aggressive pricing all delivered via a memorable experience will result in new loyal customers with a future revenue stream.  At the same time, these retailers will be able to retail their own customers against the aggressive discounters and e-tailers.

4. Last but not least, now is the time to plan how you will capture every single store visitor's contact information. Prepare now for drawings, giveaways, and birthday clubs - whatever it takes to get that store visitor to tell you his name and how to contact him again. Every contact is a potential future sale. Use your success this holiday season to create a successful 2009.

Ho, Ho, Ho, four months and counting.  Are you getting ready to succeed?

Win Retail Gold Like Michael Phelps

This article ran in my Daily Retail Experience newsletter on 8/13 and I thought I should share it as the Olympics are winding down. You can learn more about the Daily newsletter at the bottom of this post.

How can you not be in awe of Michael Phelps? He now has  the record for winning the most gold medals in a single Olympics and the most  career gold medals than any other athlete.  This guy is awesome.

I sat at my desk this morning thinking about how I could become the Michael Phelps of retail. At first I thought it must be the Speedos, but heaven knows the sight of me in a Speedo would not be a good thing. Those of you who are having me speak at their events in the next few months can feel very grateful I came to that conclusion.

What is it that makes him the Superman of swimming and what can we mere mortals learn from him?  From watching the Olympics and from everything I've read, I've identified a few things we can learn from Michael to help us bring home our own gold.

1. Let your competition motivate you. Michael Phelps doesn't worry about what his competitors do or say; he uses it to motivate him to achieve his goals.  When a competitor knocks or doubts him he cuts out the article and posts it in the back of his locker.  He doesn't whine, complain, or try to one-up his competitors; he just goes out and beats them.

The same holds true for successful retailers. They watch and listen to their competitors and then go out and try to beat them at their own game. On the other end of the spectrum, retailers who are struggling inevitably are the ones to moan and complain about their competition. One thing I've learned in life is that moaning and complaining never get me anything. It's action that delivers results.

2. Train to win.  Did you see the interview with Michael Phelps' mother where she said his coach came to her when Michael was 11 and said it was time to start preparing for the Olympics?  She laughed at the idea but the coach was serious.  He saw the champion in Michael.  From that day forward Michael started serious training. Today he eats, sleeps, and trains.

I'm not saying you should only eat, sleep and work, although I'm sure some of you already do just that. We need to have a good work/life balance.  But while you're at work, train to win.

I used to see training as a deliverable, something that once I read or gave to employees I could walk away from.  I now know that training is an activity.  It might involve reading something but it also means working with people to improve both their skills and mine. I guarantee that if you dedicate time every single day to training, and I mean every day just like Olympians do, you and your staff will improve and achieve your goals.

3. Stay focused. Phelps lets absolutely nothing get in the way of his goal.  His goal coming into these Olympics is to win the most gold medals of all time (check) and the most in a single Olympics. He knows what he wants and that's what he plans to do. He's so focused that he skipped the opening ceremonies at both Athens and Beijing because they were too close to his first event. Makes me wonder how many of his competitors were at the opening ceremonies that night.

While everyone around Michael talks about the big picture, he must compartmentalize. U.S. national team coach Mark Schubert said it well,  "Michael really does a wonderful job at taking one day at a time and attacking whatever's in front of him for that day."

What's your goal for today? Not just your sales goal, which you need to have, but what are you going to attack today that puts you one step closer to achieving your overall goal? Don't let the petty distractions and flare-ups that always happen get in the way of achieving your goal, or if you will, your gold.

Have an Olympian kind of day!

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Features and Emotional Benefits

One of the first things we learn in specialty retail is to demonstrate or point out a product's feature to a customer and then translate that feature into a benefit.

That concept was pounded into me at my first Sharper Image new store training.  Features - benefits.  Features - benefits.  As part of the training we were given a random product and had to be able to rattle off at least three features and benefits.  Let me tell you, that's easier with some products than with others!  Especially when you can't include, "the company is making a huge margin and me a big spiff."  But I digress.

While I've always fundamentally agreed that successful retail selling includes features and benefits, I also knew that something was missing in that approach. This becomes even more evident when you apply the features and benefits approach to non-demonstrable products.

Salesperson showing clothesWhat's missing is the emotional benefit to the customer.  An emotional benefit is the positive impact a product, or at least purchasing a product, has on a customer's feelings. The emotional benefit can be joy, happiness or hope.  It can be something that helps the customer overcome sadness, fear, or worry.  It can also instill confidence or make the customer feel sexy and attractive. The list is as long as people's emotions.

Most of our purchases are emotional purchases.  Anybody who doesn't agree obviously doesn't buy ice cream when they they're feeling down or fine wine when they're feeling good.  Or maybe it's the other way around.  Either way, almost everything we buy is as much based on a feeling as it is a rational decision.

This is especially true with non-demonstrable products. A customer doesn't usually decide to buy a beautiful necklace because of the clasp.  She buys a beautiful necklace because of how that necklace makes her feel.  Most of the time, the emotional decision to buy is a subconscious thought not easily recognized by the customer.

There are two ways to communicate emotional benefits to a customer. The first is to translate a tangible benefit to an emotional benefit.  This works well especially well with demonstrable products.  Good salespeople already add the emotional benefit to the tangible benefit but the more you can articulate it separately the more likely it is to connect with the customer.

Here's an example using a cellphone.

Feature: "This phone's atomic battery last three times longer than similar phones."

Tangible Benefit: "What that means is you can go up to two weeks between charges."

Emotional Benefit: "You won't have to worry about not having enough battery for your daughter to reach you at the end of the day."

The other way to communicate emotional benefits is to use them instead of the tangible benefit.  Again I think a lot of people do this naturally but may feel they aren't properly selling with features and benefits. They are; they're using emotional benefits.

Here's an example using a pair of earrings.

Feature: "These retro-style earrings are absolutely beautiful. They will be perfect with the dress you're wearing that day." (The feature is the beauty.)

Emotional Benefit: "You're going to look beautiful on your daughter's wedding day." (Customer will look beautiful is the emotional benefit.)

The more you know about your customer and the deeper the relationship you build, the easier you'll find it to communicate emotional benefits to your customer.

I encourage you to roleplay with your colleagues today on using emotional benefits.  Afterwards, try to communicate at least one emotional benefit with every customer. As a result, you'll probably make more sales. Then you'll get to realize an emotional benefit as well - the joy of making more money.

More Realistic Roleplaying

I've often equated roleplaying on the sales floor with flossing. You know that it's good for you and you should do it more often than you do. One of the biggest challenges with roleplaying is that it isn't very realistic. One way to make roleplaying more realistic and interesting for your staff is to create a series of customer profile cards.

Write down on an index card the following information:

Customer's Name
Sex
Age
What product the customer has previously purchased
Reason for coming in the store. "Just looking" - "Need a gift" - "Need a certain type of product"
What products they might be interested in.

Then have each staff member role-play once every day with a colleague.  One person is selling; the other draws a customer card and uses that profile for the roleplay exercise.

I believe if everyone on the staff role-plays daily that a store can't help but improve sales. And don't forget to floss too.

Experiences and the Positive Impact of One

Here's a story that I think you'll appreciate. The other morning I dashed into my local grocery store to pick up a few items. While waiting in line I couldn't help but notice that the woman bagging the groceries wasn't doing her job as quickly as I wanted her to and (in my opinion) was perhaps a bit too talkative.

My incipient annoyance turned to a smile as I watched her work.  She was amazing. No she didn't speed up by any means, and as a matter of fact she might even have slowed down.  What she did spectacularly well was make a personal connection with every customer.

The customer ahead of me was a paramedic from the firehouse across the street.  As she bagged his groceries the cashier talked with him about the dangers of heat stroke. I'm not sure how the topic came up since it wasn't a hot day but she did seem to be passionate about the topic.  As he started to leave she smiled and told him to enjoy his steak tips. He smiled back and said, "thank you."

When it was my turn to check out I realized I was looking forward to talking with her.  She said hello and immediately picked up on my Black Dog shirt from Martha's Vineyard. She started telling me about the "fabulous trip" she once took to Martha's Vineyard and asked if I liked it.  We chatted about Martha's Vineyard and the cereal I was buying.  When the transaction was completed she handed me my groceries and with a big smile said thank you and wished me a good day.  I walked out the door smiling and thinking about what a good day I was going to have.

I believe this young woman gave some of the best customer service I've had in a long, long time.  She greeted me, she engaged me in conversation, she connected me with the products I was buying, she completed her task efficiently, she smiled, she was personable, she said thank you, and I believe she really wanted me to have a good day. How fabulous!

This woman is not a member of management and she never will be.  She is, I suspect, as high on the company ladder as she is going to get.  She is one of the several developmentally disabled persons employed by this supermarket.  I'm sure that because of her disabilities she is probably limited in the types of jobs open to her.  Luckily for me, she picked this one. 

She reminded me that delivering an outstanding customer experience is the result, first and foremost, of having a genuine interest in the people we meet.  If we simply take time to connect one-on-one, for whatever brief time we have with our customer, it will almost always result in a good experience for both the customer and for us. 

I believe that woman had a good day as a result of her ability to brighten the day of her customers. I know I did!

So let me ask, how have your days been lately?

Dude, Where's My Customer?

There's a very funny quote in the Times Tribune from Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and banking firm. In an article about Boscov's Chapter 11 filing and the chances of them emerging successfully, Mr. Davidowitz said,

“Young people don’t find department stores cool. Every time there’s an obituary, the department stores lose a customer.”

Ouch!

Department stores operating in rough retail environment

How to Attract More Customers

Money magazine recently asked me to answer this question posed by a retailer:  "How can I attract more customers to my retail boutique without spending a lot of money?"

Here's some part of my answer.

“One of the cheapest and often most successful direct ways to boost retail traffic: Send an e-newsletter to past customers.  ‘It's always more effective to market to the person you know,’  says Doug Fleener, president of the Dynamic Experiences Group, a Lexington, Mass. retail consulting firm. ‘This way, you don't need to advertise to the whole local market just to get these shoppers back in the store.’”

Read the rest of my advice, as well that of other experts, here at CNNMoney.com.

Maximizing Today's Consumer

I was recently shopping in an upscale vacation town and overhead a conversation between two middle-age women. Okay, I put myself in a position to overhear them, but it was all in the name of research for you, my readers.  Both women were what I would consider affluent consumers and regular buyers of luxury goods.

They were both carrying several shopping bags and had just exited a women's boutique. One woman turned to the other and said, "Last year I would have bought that outfit."  To which her companion replied, "Same here. It was cute but not today."

Granted, I only heard part of the conversation, but it was a textbook example of today's consumer. They had shopping bags in their hands and money in their wallets but they made a conscious choice to pull back their spending a bit.

This is exactly why it is so important for specialty retailers to execute at the highest possible level. Today's consumer is still spending money - but not as much as last year. There's little room to fall short. You want these consumers cutting back in someone else's store and not yours.

Here are three things specialty retailers can do to maximize their opportunities with today's consumer.

1. Have what the customer wants in stock.  Having the right product in stock has always been important.  Today it's more important than ever.  Not having a product in stock gives your customer extra time to consider whether he/she should buy the product or not. I can't necessarily measure it but I guarantee that second chance sales and drop ships from stores are down this year compared to the past.

At the same time, the staff needs to sell what's in stock. Obviously you want to match the customer up with the best products that meet their needs, but getting customers excited about something they can't buy right away rarely meet their needs either. Sell what's in stock!

2. Create a great first impression. That first minute when a customer enters a store is crucial to setting the stage for a great experience.  Last year those two women I overheard walked into stores with a lot more purchase intent than they did this year.  A memorable and unique store experience will begin to sway the buyer from "maybe I won't" to "maybe I will."  As I told a potential client the other day, I'm convinced that the first one or two minutes have a greater impact on sales than any other element of the customer's experience.

3. Engage with purpose. When the economy is humming along most retailers make sales in spite of their approach. When things tighten up, those easy "low-hanging fruit" sales are the first to go. Retailers have to work harder for their sales.  That's great news for retailers who can create sales.

Engaging with purpose begins with the belief that every customer is a potential buyer. In order to create that sale the retail staff must make a strong enough connection with the customer to identify his/her true needs and opportunities. "How may I help you?" won't create a sale. Engaging your customer in a friendly non-threatening way will. Asking questions so that every answer leads the associate to recommending a product will.  Recommending a product with enthusiasm and passion will.  Engage with purpose or leave money on the table.

Those two women I overheard weren't in your store and chances are they aren't your customers. But, every single one of you has customers just like them. It's important to ask yourself everyday, are you and your staff executing at the highest possible level so they cut back their spending in somebody else's store and not yours?

The Karma Loss Prevention Approach

Happy August 1st.  I don't know about you but as far as I'm concerned, this summer is flying by way too fast.  And why is May 1st called May Day but August 1st isn't called August Day? Well, I'm starting a movement - HAPPY AUGUST DAY!

 

Here's a great sign I found in this in a funky and fun store called Revolution in White River Junction, Vermont.  The owners of Revolution classify their store as "eco-chic apparel & ultimate gear for men and women."  Since I'm not eco-chic I didn't purchase anything but I did see a wonderful selection of clothing by up-and-coming independent designers, vintage fashion, and some well known designer labels.  The store has a fabulous vibe, an espresso bar, and outstanding customer service.  This sign certainly beats the typical "we prosecute."