Retail Contrarian

Green or Green?

Here's something for non-mall stores to consider.  Those of us who have been in retail for a long time have long since accepted the custom of propping open the front door to encourage more foot traffic.  As customers and retailers alike become more focused on green initiatives and energy conservation, is this still a good idea? 

Does an open door while the AC or heat is on inside a store actually turn off more customers than it brings in?  I don't know the answer but it is something to think about. Got any thoughts?

What's it Going to be Today: Distractions and Reactions or Actions and Satisfaction?

I got a call the other day from a retail colleague of mine I haven't spoken to in a long time. We talked about family and mutual friends, and then the conversation turned to work.  He said that his business is off from last year and immediately launched into an economic dissertation worthy of the front page of The Wall Street Journal.

He started with "the recession that started a heck of a lot earlier than the feds want to admit." From there it was the collapse of the housing market, the rising price of gasoline, spiraling food costs, tightening credit, and consumer confidence.  I think he eventually even tied in Paris Hilton but I'm not sure because by then he had lost me.

When he was done ranting I asked, "But aren't those just distractions? A lot of stores are hitting their goals."

And off he went again.  This time he told me about all the challenges he faces as a result of the above. His payroll was cut, his marketing budget is down, his inventory has been reduced and his travel budget was cut, which he doesn't seem to really mind since it means he is home more.

To which I replied, "But those are just reactions to the distractions. What are you doing to help your stores achieve their DAILY goal?"  There was a long pause on the phone, and then he said, "Probably not as much as I should be doing."

My old colleague is an excellent motivator. He's wonderful with people, he's a great coach, and people love working for him. But he's gotten so caught up in the distractions and the reactions he can't control that he hasn't been doing the things that will enable his stores to succeed.

I reminded him that he could have a great year by just having a successful day. Today. That's all it takes. One day. If he can lead his stores to hit today's goal in spite of the distractions and reactions then he is on his way.

I told him to forget everything he just ranted about.  I jokingly suggested that he clearly needs to spend less time online or watching the news. What he needs to do is figure out what actions he and his managers can take to achieve today's goal.

The actions he needs to take today are no different than last year or even five years ago. Be a great leader. He needs to encourage and motivate his team, set high expectations, coach them to achieve those expectations, and take action if someone is falling short.  How he does those things might be different than before, but the actions are the same. Because he manages managers he also needs to make sure this is happening in every one of his stores.

It was a great call for both of us.  I was energized by the conversation and you could hear the difference in my colleague's voice.  He seemed excited to get off the phone and do what he can to make today's goal.

Of one thing I am absolutely certain.  If we set aside distractions and reactions and focus on the right actions, we'll receive the satisfaction of hitting the one goal that's most important. TODAY'S.

So regardless of your position, what actions are YOU taking to achieve today's goal?

Michelli + Fleener = Shared Wisdom

Dr Joseph Michelli, bestselling author of The Starbucks Experience, recently posted a brief podcast on his site in which he talks about our own Doug Fleener's 50 Ways to Improve the Customer Experience. An insightful and outspoken proponent of the customer experience in his own right, Dr. Michelli offers some flattering words for Doug and Dynamic Experiences Group, and shares 12 of Doug's 50 tips with his listeners. It's definitely worth four minutes of your time.

The First Sale is Made Internally

One of the worst things that can happen right now is for your salespeople to start believing that a customer coming in the store will not be making a purchase.  Remember, the first sale we need to make is to our own people.  We need to keep reinforcing our own store's value proposition and points of differentiation to our employees so they remain positive with every customer interaction.

Obsession: Your 2008 Strategic Competitive Advantage

One way to not simply survive but thrive during the current financial (insert whatever word you'd like to use here - situation, opportunity, challenge, crisis) is to become even more obsessed about your customer's shopping experience.

Contrary to what some people are saying, customers are shopping and they are spending money.  Malls were packed with shoppers last weekend.  While consumers are not spending the way they did this time in 2007 or 2006, it's not really that far off.  They're just being more selective in what they buy and where they buy. 

What I see when I walk malls and strip centers are retailers who haven't changed many of their actions beyond marking merchandise down faster and faster.  Sure, customers want value but they also want to feel good.  As a specialty retailer, part of your value proposition is how you make your customer feel when he/she is in your store and, most importantly, when he/she makes a purchase.

Is there any better time to make customers feel good about their experience with you?

Since that retail experience is indeed part of your value proposition, you must deliver a better experience in 2008 than you did in the past.  Failure to do so will have a direct impact on both your top and bottom lines.

Ask yourself and your team these six questions about your customer's 2008 shopping experience:

1. Does your customer feel a positive and energetic vibe when he/she enters the store?

This usually comes from a combination of the staff's attitude, quality of greeting, music, and other variables.

2. Is it clear to your customer that he/she is the staff's highest priority - without being pounced on as they walk in the door?

Some retailers have cut back staffing to a point that the employee's priority is now completing tasks instead of focusing on the customer.

3. Are you creating some type of memorable moment for your customers?

What is happening inside your store that isn't happening anywhere else?  Is it that bottle of water your customer is offered, a comfortable chair, a piece of candy or a product sample?  While the best memorable moments are usually the result of your staff doing something spontaneous with a customer, a planned strategic memorable moment is a very effective tool.

4. Are your customers able to check out quickly when they're ready?

Customers never feel good if they have to wait a long time to finalize their purchase. Sometimes they don't even bother. A friend of mine was at a department store last weekend and wanted to buy over $400 worth of clothes but the only register open was much too slow for him.

5. Is your store impeccable?

Not just clean, not just well merchandied, impeccable! Beyond the staff, the store environment plays a big part in the customer's experience.  Are the product displays well maintained  Are new shipments put out quickly without causing any disruption to the customer?  Is the cashwrap clutter-free?

6. Most important of all, is every single employee in your company obsessed with your customer's experience?

That by far is the most important thing you can and should be doing right now. Every employee in your company or store should be obsessed with the customer's experience because they know that it is the highest priority and there's no one more obsessed about the customer's experience than you.

So let me ask, are you obsessed enough to be a strategic competitive advantage?

Note: A printer friendly version of this article to share with others or to use in a store meeting is available here.

Into Action Tip: At your next store meeting have the staff brainstorm additional ways that they can add value with the store experience they deliver. Think outside of the box and use this as an opportunity to create an even stronger strategic competitive advantage.

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.

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.