The Forgotten Employee: The Store Associate
The other day I was at the dentist, and while I was being prepped before my dental work began, I found myself in the middle of a discussion between the dentist Dr. Kara and the dental hygienist, Molly, about shopping for the holidays. Both were complaining about the lack of time. Dr. Kara prefers stores, and as someone in her early 30s with young children, it’s not easy, but she prefers seeing before buying and likes the opportunity to browse for ideas. Not Molly. “Oh no, not me,” she stated. “It’s Amazon, find it, click, and it’s on its way. I hate going to the stores.” “Why?” Dr. Kara asked. Molly replied, “Not only does it save time, but seriously, the lack of regard for the customer.” She asked, “Tell me you’ve never gone into a store and couldn’t find anyone to help you. Then, when you finally did, they acted like they couldn’t be bothered?” Dr. Kara smiled and said, “Yes, it does happen, but I feel sorry for those people.” And that’s when the real conversation began. “Sorry?” asked Molly. “Yes,” said Dr. Kara.
Dr. Kara went on to talk about her two younger brothers, one in undergraduate school and the other in grad school, both working in retail stores to earn money while in college. She told Molly about how bad the pay is, the working environment, how they always have to fight for hours to work and how physically demanding the job can be. So, with that, Dr. Kara said that she understands why many store associates are unhappy and don’t feel motivated to do a good job. At first, Molly wasn’t buying it, but the conversation continued.
Dr. Kara told her that her younger brother makes $9 an hour and how the store manager continually takes advantage of him: making him close one night and be back early to open the next day. She shared how he is stuck working every weekend and holiday. He only gets, if he’s lucky, ten maybe twelve hours to work a week. After taxes, his job isn’t even worth it. But he’s doing it for now while in school. Her other brother has the same complaints and feels terrible for the employees that need those jobs to make ends meet. And when they don’t receive enough hours they are forced to work two, three, sometimes four jobs just to get a full week of work. One employee was full-time, and then one day for no reason they cut him to 15 hours a week. How do you do that to someone? The employee quit a month later, and the store manager gave him a hard time for leaving.
NOT JUST PART TIMERS
We tend to look at retail store jobs as something only teenagers and college students take. The truth is there are many adult store associates who work full time and those people have it the hardest, especially when they are kept to a limited number of hours to prevent them from qualifying for health insurance. And because schedules are usually finished last minute, those associates are forever juggling their personal lives just to make sure they’re available to work whatever hours they can get. That means sometimes an associate works a full shift followed by closing the store and then has to be back early the next morning to open the store and work another full shift. Dr. Kara said both her brothers have seen many instances when a full-time employee, living pay check to pay check becomes very worried and upset when suddenly hours they were expecting one week weren’t there. Then they get to read about how their high-level executives are earning millions of dollars a year with their compensation packages. It’s very hard for them to accept that when all the associate wants is a chance to earn a living.
Now Molly was listening. Dr. Kara went on to tell her about the physical requirements that go beyond standing on your feet all day. She explained to Molly about how even though there are supposed to be stock employees, often there are none, and the store associates are forced to unload heavy boxes themselves sometimes weighing 30 – 40 pounds each. It’s not too bad for her younger brothers Dr. Kara said because they’re both healthy guys, but they’ve both shared stories when female associates or part-time senior citizens were made to move inventory and how difficult that was. One woman complained that she had a bad back and her manager told her she had no choice and that is was part of her job.
LACK OF TRAINING
It’s no wonder turnover at the store level is so high. Another complaint Dr. Kara shared was that both of her brothers said they received no training. Her one brother said on Day One he was put out on the floor because of the staff shortage, and having received no training, he felt quite inadequate and embarrassed when customers had questions he couldn’t answer. Her other brother said that every day when he started his job he was supposed to get training, but it never happened so he had to figure out everything on his own. Molly was quite surprised and now began to share Dr. Kara’s empathy for these employees.
What is unfortunate is that too many retailers today don’t realize that the way many of them treat their store associates does not help the customer experience. In fact, it creates a bad customer experience and that costs sales! Dr. Kara told Molly how some managers insist on tasks getting done regardless of whether customers need help or not. Too often it’s why customers receive useless answers to their questions that they don’t like. Responses like, “If it’s not on the shelf, I guess we’re out of them,” or “I’m not sure if we carry that item anymore, so you need to go online and look.” And typically, after being given one of those answers the associate goes back to their task or worst yet, just walks away.
Molly mentioned how when she did shop in stores she would get annoyed when she would walk into a store, and the store associate would walk in the opposite direction or look down at the floor avoiding her. Dr. Kara laughed and said, “Oh yeah, probably because of the pressure of getting tasks done.” Then Molly asked a straightforward question, “Don’t these retailers realize that by not paying the store associate more money, providing better working conditions with more working hours and training that they are driving the customer like me away? Dr. Kara said, “Yep, but that’s the leaders of so many of these one-time great companies. Today it’s more about them, their bonus and of course the stockholders than the customer. It’s sad, too, because I still love to shop but when I can’t find anyone to help me or when I do, someone who really wants to help me, it does take the fun out of shopping. But when I do find that special person, there’s no more significant experience. I love the holidays, and when I find that friendly, well-trained associate to help me pick out the perfect gift, I can’t help but think of them Christmas morning when I see the reaction of the person’s face I gave the gift too.”
All I can say, is I hope retailers start to wise up soon and realize that they really can be doing a lot better if they just took care of the internal person that matters the most: the forgotten employee, better known as the store associate.
FAKE NEWS? WHAT ABOUT FAKE CUSTOMER SERVICE?
Every high-level retail executive I talk to is always quick to state how important providing excellent customer service is to the success of their business. In fact, most senior executives claim to have good people at the store level and that they provide good customer service. But do they believe it?
If they do, I suggest they either visit their stores in disguise, which many never do or find a different career.
Today I went shopping with a friend who wanted to purchase a washer and dryer for her new townhouse. Her budget was small especially after moving, but she had researched items online and found a few that she was interested in seeing. Our first stop was Lowe’s. Upon arriving at the store, we made our way over to the section to immediately find an excellent selection of washers & dryers that were almost all on sale. We looked around, and my friend found two washers and dryers in her price range and had some questions. Soon we realized there was one important part of the in-store experience missing: there was not one sales associate in the department to help us. There was no one. What made it worse were the two other couples looking for assistance were also waiting. One customer said there was an associate there when she arrived, but the associate left to go to find something. And according to the customer, that was 15 minutes ago. Eventually, the associate returned, and with two other couples ahead of us, I politely asked her if there was anyone else who could help us. I could not believe her response. “Are you buying or just looking?” I asked myself, "What kind of service is this?" I told the associate we’re buying if we find what we want. With that, a sarcastic, “hold on” and then she paged someone. Several minutes went by, and finally, another associate entered the department who was instructed by the associate at the desk to help us. My friend pointed out the two washers & dryers she was interested in and asked a few questions. It was apparent that the associate had no idea and even though he was quite polite, he soon apologized, admitting he was from another department and knew nothing about washers & dryers. So, after all the time we wasted, we were nowhere. Looking back at the desk for the other associate, I noticed two more customers were waiting for the associate who was once again no longer in the department. That was it, and we left. I realize this was only one Lowe’s store and you can’t judge a chain of over 2370 stores by one location. But this was a busy store. They were having a sale, and we were there on a Sunday afternoon. Wouldn’t they think to have some staff available to help customers? And yet in a recent article, their CEO, Robert Niblock said he was committed to improving customer service by increasing staff hours. So, is that real or Fake Customer Service?
Our next stop was the Sears at the mall because my friend had seen a washer and dryer advertised online. We found the set, and she had questions. That didn’t matter though because the two sales associates engaged in a personal conversation were not about to assist us until they finished. I politely gestured to one of them who acknowledged me, but they were not about to end their conversation. Finally, I walked over to the associates and asked nicely if one of them could help us. This time the person looked at me and said, "Just give me a minute, and I’ll be right over.” Then they went right back to their conversation. Now that I was standing right there, I could hear they were discussing the Mayweather/McGregor fight. Silly me. Surely that conversation was more important than assisting a customer who was interested in making a purchase. Almost ten minutes later, with me periodically looking over and them giving me a nod that they were coming over. At last, one of them walked over to the washer and dryer we were interested in purchasing.
My friend was on a budget and did not want to spend too much money on a washer and dryer. She had about $800 and while researching online, found a washing machine and dryer on sale for $349 each. Then added the tax and hookup fees, she would be within her budget. The sign said Free Delivery with purchases over $399.
Unfortunately, it turns out many retailers today are doing this. It was Free Delivery with any single purchase of $399 meaning that at least one item had to cost $399 to qualify for the Free Delivery. Well at first, she wasn’t happy, but the gas dryer was $100 more, so that put her at $449. It was a bit over budget, but she was willing to come up with the difference. But that didn’t matter. As I read the sign more carefully, it also mandated that the Free Delivery with a purchased item of $399 or more was only good provided the customer use their Sears charge card. So now how is that for good customer service? She didn’t have a Sears card, didn’t want a Sears card, so with that we left. This experience also meant another lost sale at a second retailer all because of Fake Customer Service.
It turned out that Home Depot, our third and final stop, did it right (which would explain their recent successful 2nd quarter). My friend still had to meet the minimum cost requirement of an item purchased. This time, the cost was at least $396, but we could pay for it with any method we wanted. Their hookup prices were a little better than Sears as well. But what mattered most was the person in Home Depot who assisted us. This store did not give us Fake Customer Service but instead gave us the real thing. The associate took the time to answer all my friend’s questions and made sure we took care of all the details. Delivery will be in a few days, and we remain hopeful that my friend will get everything Home Depot promised.
But Retailers beware. What I noticed today and have been seeing is customers are coming back. I doubt we’ll see customers in droves like in the 80s. Nevertheless, store traffic is improving. Why? For the first time in many years, we saw a 3.1% growth in GDP. Consumer confidence is at an all-time high and unemployment is at an all-time low. So, retailers beware. The way retailers can compete with the internet as well as each other is by wowing their customers with outstanding customer service. Keep playing the game and providing Fake Customer Service and as retail continues to improve, yours will not, and you may very well find yourself out of business! Fake Customer Service is NOT Real Customer Service!
Invest in your stores, invest in your staff and find out what real customer service can do for your business before it’s too late.
What's More Important: The technology of Tomorrow or The Needs of Today?
Many retailers are continuing to close stores, filing for chapter 11 or worst yet, going out of business. The reasons vary, but most commonly is there is too much debt brought on from either too many underperforming stores or too aggressive loan terms when going private. The Internet, namely Amazon, has taken a big chunk out of sales, fewer people shop in-store and younger people don't buy as much as the older generations did. However, with all that said, the most significant problem of stores losing sales remains with retailers not addressing the needs of today while too many of them are chasing after unproven and possibly not a necessary technology of tomorrow.
In today's retail environment according to a recent report by Axonify, 32% of retail employees say they do not receive any formal training, which is higher than any other industry surveyed! https://www.retaildive.com/news/most-retail-employees-receive-no-real-training/517522/ Does that make sense? How many sales do retailers lose because the customer who has taken the time to come into the store has a bad experience with an untrained store associate and leaves unhappy, without making the purchase? Most retailers talk a good game about how vital, adequate training is, and yet many of them only provide at best 10 hours of training time. In fact, in many retail environments where the staff is very thin, it's no surprise when the new hire is on the floor the first day because the store has no coverage. How unfortunate is it when we hear that standard line coming from an embarrassed employee who when asked a question they cannot answer responds with, "I'm sorry I don't know, today's my first day?" We've all had that happen, and although we may feel bad for the untrained associate, we are never happy with the store for putting that person and the customer in an unfortunate position.
Yet, rather than invest in a few dollars for hiring more staff and most importantly providing effective training, each day we read about another retailer investing in some unproven technology that will one day do amazing things. That may be ideal for their business but what about the customer? Will all the AI technology create the positive in-store experience or aren't humans capable of that as well? Don't get me wrong, I love technology, and I find myself very excited when trying out new devices, software, and services that make my life easier. I enjoy them even more when I have downtime to play with them. But until we can build an android-like Data from Star Trek, which is many years from now, most of the technology that retailers invest in today will fall short of its expectations. The result is that retailers will continue to lose more customers and more sales from poor store performance.
Ask yourself this question: why does a customer go to a store? Usually to find or buy something. Yes, they could be browsing, or they could be looking for the item to see it in real life with the intention of going home and buying it elsewhere, or they could be looking for the item for purchase immediately in the store. So, let’s address each possibility and how technology is not the solution.
The customer enters the store just to browse. First, the customer received no acknowledgment from store associates who are either engaged in tasks or personal conversations, which is common when there is no training that explains why associates need to engage customers. The customer walks around the store and leaves without making a purchase. That's what we expect. Now, the same situation happens with a well-trained associate. In this scenario soon after the customer was looking for an item, the associate greets and welcomes the customer to the store. They get into a conversation about the item the customer was looking at, the associate answers a few questions and shows the customer some competitors’ products with different features. Suddenly, the browser decides to make a purchase and is now a buyer. How is technology going to do that?
The second possibility is the customer interested in seeing the item before going home and buying it online. The customer finds the item, reviews the product features and the price confirming it's a few dollars less on Amazon and leaves. Now, what if in the same situation while looking at the item, the customer is approached by a friendly well-trained associate, and they begin a conversation about the item. The associate knows the item is being sold for a few dollars less on Amazon and tells the customer, "You may have seen this on Amazon for a few dollars less." Of course the customer, who is slightly embarrassed, doesn't admit it. But the associate knowing that the model sold on Amazon, that although looks identical to the one in-store, has somewhat less quality and she points out the differences of a few extra features the Amazon model does not have. Now the associate has the customer thinking, and soon she realizes that she would rather have the additional features and decides to purchase the item at that moment in the store. How is technology going to do that?
Then, of course, the most common scenario is the customer comes into the store to buy an item. If left completely alone and the customer finds what they are looking for, there is a good chance they will make the purchase. Of course, if they can't find the item or anyone to assist them, they will leave. But what if the well-trained associate greets and engages the customer? Now we have all kinds of upselling possibilities where the associate recommends more or other items after the associate learns more about the customer's needs. And in both cases, there is the opportunity to add on to the sale with accessories to further help the customer with their needs. And lastly, of course, is having a chance to share something unrelated to the customer such as new items or a current in-store promotion leading to an even higher sales purchase. How is technology going to do that?
There is nothing wrong in investing in technology especially if has proven value to your business. But retailers who have more competition than ever today can't afford to abandon some of the basic principles that will always lead to sales, and that starts with having enough associates at the store level and most importantly making sure they are well-trained. I always say, "There is no one or nothing more important than the customer." The customer must come first, and we need to address ALL their needs. Until we have Data, no technology will do that.
LTraining®: The Best Way to Train Store Level Associates!
Most retailers are faced with the same issues when approaching store level training: time, payroll, scheduling, turnover, and delivery. These concerns make or break effective training. Time is a big issue, especially if it's online or classroom training and you need to pull the store associate off the floor. Payroll is another problem, mainly when management has only allocated 8 hours of training, but the training programs require 30 hours. And then, of course, there's store associate turnover, which in most retail companies is very high. You're all set to continue training the new hire, but they've already quit. And lastly the biggest challenge of all…delivery.
So, let’s start with delivery.
COMMON DELIVERY METHODS OF STORE LEVEL TRAINING
Let's begin with "reading." First, the trainee will need a quiet place to read. And, if there is a lot to read or the document uses a higher vocabulary level than the trainee's comfort zone, it may not generate much success. If your delivery method is online, it requires a quiet place most often off the floor. That means the retailer will have to allocate extra payroll dollars for the trainee and make sure they have another associate covering. Also, the trainee has to remember what he or she watched online before attempting to transfer those skills to the job. As a result, online training can be challenging for trainees to learn and retain the skills they need.
Another method of delivery is live training that is usually conducted by a professional trainer. However, it can be difficult to coordinate times for the trainer and the part-time associate or group of associates to receive the training. There are times when those needing the training do not receive it due to the difficulty of scheduling part-timers.
Next, there's peer level training. Why shouldn't a skilled worker or manager be able to teach the trainee what they need to learn, right? Well, for starters, just because a person has the skill it doesn't necessarily make them a good teacher. Some employees assigned to train another employee may rush through the training, cut corners or not take enough time to make sure the trainee is learning what he or she should.
We all do things differently. Workers who have become skilled at their job tend to have found shortcuts, workarounds and often, different ways of doing something that they feel are better than the company method. It's natural, and we are all guilty of this flaw. However, when the skilled worker shares "their way" with the trainee, the result quickly becomes store level inconsistency, something that is not good for business.
So, if every common method of delivery has challenges, what can a retailer provide that is effective?
LTRAINING® IS BORN
A few years ago, a retail executive who was frustrated and searching for the best way to train part-time store associates challenged my firm. That was when LTraining® was born. LTraining® was created specifically for the part-time store-level associate, for the retailer with little or no payroll for training and for the company who needed immediate results.
Leaning on my many years of music teaching, I realized that people learn best by doing. You don't learn to play guitar from watching a video, reading a book, or taking an online course; you learn to play guitar by holding the instrument, the pick, feeling the strings, frets, and slowly learning the notes and the chords. Then with lots of practice, you master playing the guitar. How could I use a music instructional method for training store level associates?
Thinking about how to deliver the in-store training, it became clear that if the goal was to train part-time employees, the training had to be self-paced and self-contained, so the trainee could learn at their own pace. As I continued thinking of all the issues, the light bulb went off; the trainee had to train in their working environment! The training would take place during business hours so there would never be an issue of payroll and the trainee would have to able to assist customers in between the training so there would be no risk of losing sales.
LTRAINING® MAKES ITS DEBUT
Our first client was Barnes & Noble, and we introduced product knowledge programs like "How To Sell Children's Books" and "How To Sell Computer Books." Immediately, the custom-produced training modules were exceptionally well received, but we wanted to take it further. Barnes & Noble preferred having the trainees sit in the comfortable chairs and listen to the program, but I wanted them on the floor in the specific area touching and feeling the books so that the trainees would be more familiar with them, where they were and would know what to recommend to their customers. Luckily, I found an ally at a growing retail chain at the time, Linens' N Things. Back in 1999, Linens 'N Things loved the idea of LTraining® and allowed The TSi Company to experiment. Our first program was a product training program for Pillow & Pads featuring their private label brand. We piloted three LTraining® programs in 30 stores.
The program had associates training in the pillows and pads department, taking items off the shelf, feeling the differences between textures, and reading the packaging to understand the features and benefits. Most importantly, trainees learned how to engage and share the information with customers. The results were overwhelming. Within 30 days of rolling the training out to the "test" stores, those Linens 'N Things locations saw a sales increase with pillows & pads of nearly 30%! This led to two things: 1) rolling out the training to all the stores and 2) a long-lasting relationship with Linens 'N Things until a private equity firm purchased them with The TSi Company producing and delivering over 30 training modules a year.
During our time together, The TSi Company experimented with other uses for LTraining®. Soon in addition to product training, LTraining® became the perfect tool for systems training. Now trainees were learning the POS terminals and RF Gun technology through headset based LTraining® custom produced modules. LTraining® provided new hires the opportunity to do the functions for themselves, and by the time they completed the training, the associate was running the system. Typically, store systems were taught with a buddy and often there would be scheduling issues. Also, the training that took place because of the "buddy" system and trainee talking, along with other job interruptions, took a lot longer than LTraining®. LTraining® reduced the company's standard training time by as much as 70%. Our methodology was now saving the company money! Soon, new hires used LTraining® programs for a store tour, orientation training; even customer service all successfully.
LTRAINING® RECEIVES A PATENT
In 2008, we received a patent from the US Patent Office making LTraining® to date the only training methodology ever to obtain a US Patent. Through the years, some of the biggest names in retail like Kohl's, Petco, HomeGoods, DXL, Raymour & Flanigan, Wakefern and more have used LTraining®.
BENEFITS OF USING LTRAINING®
LTraining® always achieves success. Today more than ever, retailers recognize LTraining® as the best method to train their store associates, especially the part-timers. Retailers are pleased that there is no need for additional payroll or a buddy and they can simply schedule the training the same way they schedule a task. Moreover, having store associates train on the sales floor during business hours is practical and highly effective. And, because LTraining® allows trainees to pause the training when needing to assist customers, there is no risk of losing sales. Lastly, because of the combination of audio, visual, tactile and kinesthetic learning styles in one program, trainees learn by doing, achieving retention of up to 90% after a single session.
LTRAINING® GETS RESULTS
LTraining® has helped retailers see up to 30% increases in product sales, 10 - 15% increase in comp store sales, 6-7% increases in conversion and significant improvements in customer satisfaction scores. Today delivered in an easy to use mp3 format, LTraining® provides complete mobility on the sales floor with custom programs produced for virtually any topic or need.
With so many clients through the years using and benefiting from LTraining® it has become a must-have for any retailer.
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Retailers Never Had A Better Opportunity Than Now!
The other day I went to the mall. Yes, a mall. It was still there, and amazingly, people were shopping and making purchases. They weren’t glued to their mobile devices while shopping as so many of those tech articles lead us to believe. They were looking, touching, feeling and many of them making purchases. As I walked through the mall, what was easy to notice was all the sameness from one specialty apparel store to another, one department store to another, while noticing stores like Apple of course having the crowd. Then I started thinking about why retailers today have the best opportunity to attract shoppers to their stores than ever before. And believe it or not, it is the internet.
Sales in retail have always been achieved through the skill of supply and demand; successfully matching potential customers with the right merchandise at the right price. It is supported by advertising first to get customers in the store and then once they are there, talented sales associates and alluring store displays do the rest. Years ago, all retailers could rely on were newspaper ads, radio and television to attract customers to their stores. Creative people would lay awake at night coming up with the next brilliant ad campaign with slogans to stand aside of the competition, many of which older people still remember today because they were that good.
WHEN DID IT CHANGE?
The change began in the late 80s when creative campaigns started to slowly be replaced with what was to be the sure thing, Direct Marketing. Direct Marketing skyrocketed almost overnight—first through Direct Response ads—with the thought being that advertisers could say their message directly and without the bells and whistles if they had a toll free 1-800 number for customers to call. It was great for service businesses, but of course didn’t do much for retail stores. At about the same time, the Direct Mail boom came to be. There was no longer a need to spend huge dollars on radio and television advertising. Now, marketers could reach their target customer directly through the mail. And what happened? Soon, we had junk mail. What was wrong with most of it? It was junk because it lacked creativity and didn’t get the person’s attention. So, in the trash it went.
The focus on most of the direct marketing ads was the offer, usually being some type of discount. When calling the toll-free number, all you had to do was give them the word or code you heard in the ad. As for Direct Mail, you just had to take the coupon that was delivered in your mail box and bring it into the store to get your discount. Creativity was further lost and soon business people were all talking the new term, ROI (Return on Investment), because marketers could track callers via the toll-free number and could track customers coming into the stores with coupons.
In the mid 1990s, the internet started to boom. (Remember dial up AOL? Another must have.) Soon everyone had email. Retailers learned they could directly send emails to customers to get them into their stores. It worked until every retailer and every other type of business flooded them with too much stuff, mostly discount offers. Once again, we had “junk mail.” What do most of the email offers we receive lack? Creativity. So, we just hit delete.
RETAIL DEALING WITH TECHNOLOGY TODAY
Today we’re told that retailers must have websites, store apps and every conceivable method of reaching their customer through technology, or the common term, “touchpoints.” That’s fine and much of it is very cool. But where’s the creativity? What is supposed to motivate the customer beyond price and product to do business with you? That’s what real advertisers and creative teams were once responsible for and it worked.
If retailers today implemented some real creativity, they could be using the internet like radio and TV was used to feature engaging and exciting messages with appealing reasons to shop them. The reasons should present a company image, company uniqueness, and customer benefits other than the product and the price.
To get the customer in the store, give them an exciting reason to come see you; personalize their visit with well-trained associates who know how not to pressure the customer, but rather to engage them and make them feel special. Let them experience your merchandise. They can’t do that online, but use your website to entice them to come try the items if they’re not already buying them from your website.
You want technology, fine. Spend money on it, but invest in useful technology to enhance the customer experience. Does it really please the customer when the cold computer voice at the self-checkout says, “thank you” after the purchase? When a human being does it, and adds a smile, I don’t know about you, but it makes me feel good and I smile back. That’s an important part of the customer experience.
EMBRACE THE OPPORTUNITIES
Retailers, wake up and embrace all the opportunities you have today, especially through technology and the internet. Start by looking at your stores from the customer’s point of view. If they feel bored, make them feel excited.
Start with the simple things. For example, make sure you’re playing the right in-store music and bring up the volume to make it appeal to your shoppers. Make your stores bright with charm and not overcrowded with merchandise. Use the internet as the go between of online and in-store. Yes, you should allow customers to pick up online purchases in-store and take online returns in your store. And of course, when you don’t have the item the customer wants in the store, assist that customer and let them purchase the item from your website along with giving them the choice of in-store pickup or free shipping to their home.
Bottom line, every time you get a customer in your store, do everything you can to make them feel special, appreciated and valued. And when they click on your site or app, remind them about what makes doing business with your brand special for them. Be creative! Let them enjoy the shopping experience. Use these tools creatively and your competition will be scratching their heads as they try to figure out your success!
RETAIL WILL NOT ONLY SURVIVE…IT IS SURVIVING
You can divide today’s retail news articles into three categories:
1) Store closures
2) How the Internet is taking all the brick & mortar business
3) The next must technological need retailers MUST have
Article after article repeats the same negative information over and over. When you look at the facts, they are telling a different story. First, just this past April retail sales were up .04% after a first three-month slow start. And just last month, many retailers posted positive comp store sales increases. How can that be? Retail is destined to fail, it’s over, right? Well, tell that to Ulta who saw a 14.3% increase in comp store sales their 1st quarter, which was close to 4% higher than expectations. Home Depot saw comp store sales increase 5.5%! Even chains like Best Buy saw a 1.6% increase in comp store sales, and they were predicting a 1.5% decrease! Other chains like Lowe’s, Five Below, Dollar Tree and GameStop all saw increases in comp store sales. Why?
Looking at Ulta by example, they have been and are continuing to do everything right with strong customer focus and an amazing in-store shopping experience led by CEO Mary Dillon. She is passionate about her brand, her employees, and her customers. Through her leadership, Ulta makes shopping in their stores fun and exciting. How many retailers that are struggling can say that? You don’t see Ulta getting into other categories, or experimenting with new strategies. No, they have found a winning formula, and they are sticking with it. Best Buy, the only remaining national consumer electronics chain, is succeeding as well because they too concentrate on what the customer wants. Their company CEO, Hugh Joly, is not averse to change and trying new ideas, but he has kept the core Best Buy strengths and continued to expand upon them.
Unfortunately, so many retailers are not doing what they should be doing to improve their business, and as a result, more will fail. They will, of course, blame Amazon and competition as well as Millennials who no longer browse brick & mortar stores. But again, look at the facts. Today, still over 65% of all shoppers prefer shopping in a store and depending on the kind of retail, that could be as high as 80%! In fact, today e-commerce sales have yet to hit $300 billion while brick and mortar sales are over $4 trillion! That is a huge difference. So, what are retailers to do?
1) Hire CEO’s and Top Executives who are interested in growing the business:
Retailers need to hire executives who are passionate about the company, want to solve problems and plan long-term strategies and growth. Today, too many executives are only interested in short-term profit because it affects their compensation. Some retailers are paying CEOs today between as much as $14 million to $22 million, when you take into account base salary, bonuses, stock awards and incentives. If the company is not doing well, this is not the time to spend that kind of money. Spend less on your executives, and reinvest the savings into your business with more staff and better training.
2) Stop Chasing One Another:
Many retailers insist it is better to get into other categories to build sales rather than fixing the business they already have. The problem is rather than gaining a competitive edge, these companies are just adding competition. There may be some success early on, but in most cases, the success is short term because of the greater competition. In many situations, the next CEO will cut the category.
3) Look At The Stores You Already Have:
So many retailers think that opening more stores is the solution to growing sales. It may be true that new stores bring in customers for a while, but eventually whatever store problems the retailer had with its existing stores will be present in the new stores. Focus on the existing problems stores have first, and only after they improve sales should you consider opening more stores. It costs millions of dollars to open new locations, and that money could be better spent investing on failing stores with more staff, better training and reasons for the customer to shop you. Use traffic counters and look at your conversion, not at transactions to see how much business you’re losing. Work at improving it before expanding.
4) Listen To Your Customers and Your Employees:
It is so easy today for any retailer to not only survey customers electronically but to also look at social media and read what customers and employees are saying about your company. If customers are complaining about not honoring policies, confusing coupons, bad shopping experiences due to unfriendly and unaccommodating store associates, then the focus should be to fix it. When employees are writing negative remarks about unprofessional store management, weak pay, poor scheduling and useless or no training, then that is the mission on hand because happy employees mean more satisfied customers, and that in turn means more sales.
5) Stop Trying To Fix Problems through Acquisitions, Mergers, and Buyouts:
How many retailers think the easiest way to grow their business is to buy a competitor or merge with them? In principle, it could be a good idea, but unfortunately, when your company already has major internal issues, buying or merging with another company who also has major issues will not solve a thing. Instead, once the cost cutting savings are applied, including the reduction of staff, the retailer now has twice as many problems to correct, which becomes much more difficult and often leads to a failed business. If you’re looking for the solution to come from a private equity firm buying your business, think again because after completing the sale, the retailer now becomes burdened with paying back an enormous debt, often putting the company into bankruptcy. Sports Authority, Gordmans, HHGregg are just three retailers all bankrupt in the last year who had been bought by private equity firms. Gymboree owned by private equity firm, Bain Capital just files for Chapter 11 Bankruptcy June 12th!
These five points, if taken seriously, can turn any failing retailer into a successful one. If Best Buy, Ulta, Lowe’s and others are improving comp store sales during a time when retail is reported to be doomed it just goes to show that you cannot believe everything you read and most importantly if a retailer wants to be successful in today’s shopping environment, it can.
TODAY THERE ARE TWO TYPES OF SHOPPERS AND RETAILERS CAN HAVE BOTH!
Recently, I attended a large family reunion with guests from ages 3 to 90. After dinner, a group of us got into a discussion about shopping today; stores, online and how technology was impacting their shopping experiences. What I found interesting about the conversation were the many opinions and ideas about what retailers should and should not do. But what was fascinating to me was that there were as many people over 50 who will do anything they can to avoid going to a store and equally or more guests ages 18 to 30 who hardly do any buying online and prefer shopping in stores. The conversation also addressed how today’s technology has made shopping better for some and for the others, how it’s made it worse.
The first topic we discussed dealt with how when a retailer puts in technology, sometimes it puts more onus on the customer and for some of the people in the discussion that was an inconvenience. We began talking about how ordering a sandwich in a convenience store was no longer convenient. In many C-stores today, even though the sandwich employee is standing right behind the counter, the customer must take it upon themselves to go to a kiosk and order what they want as if any dialogue between the employee and customer was not allowed. Two of the guests loved it because they were confident they would get the sandwich exactly how they wanted it. However, three of the guests found it to be impersonal and an inconvenience much rather preferring to speak with a human being. So, what’s the point?
TWO TOTALLY DIFFERENT SHOPPING STYLES
Simply, today we have evolved into two very distinct shopping groups: the personal and the impersonal. And by impersonal, I don’t mean cold or indifferent, but rather just a group of people who don’t want the fluff and prefer speed over conversation as well as preferring to do it themselves rather than having someone do it for them. There’s nothing wrong with that. However, what retailers must understand is that these two groups are very different with their wants and needs. To be successful, retailers must equally address both and not abandon one over the other.
A LOOK AT THE STATISTICS
Even when looking at the most recent statistics, there are still many shoppers who prefer shopping in-store and they cannot be forgotten. According to a recent report posted by Jeff Edberg on his IC Blog (http://bit.ly/2nMtEfR), today current e-commerce sales are approximately 294 billion annually, while U. S. brick & mortar are just under 4 trillion, a huge difference. Yes, online sales are growing at a rapid rate and will continue to do so, but his report shows the difference between the two shopping styles and what they’re looking for. For example, 55% of online shoppers prefer to buy from a merchant with a physical store presence over an online-only retailer, thereby giving brick & mortar retailers the advantage. But what most customers want, is a strong omnichannel experience allowing them to decide where to shop: online or in-store, and how. Eventually, when the balance of technology is properly blended with all the brick & mortar advantages, the dedicated in-store shopper may begin to enjoy some of the online shopping conveniences just as the staunch online only shopper may acquiesce from time to time realizing that when buying certain products, the in-store experience is much better.
Looking at the convenience store example, providing kiosks is great for those who prefer it. However, wouldn’t it be better to have kiosks for those that want them while also having one employee behind the counter taking orders for those that don’t? The human taking orders is more inclined to provide a better customer experience, if the person is pleasant and engages the customer. The store employee will also provide more business for the convenience store because as a human being he or she should be able to make good add-on suggestions about what extra items to put on the sandwich or to have with it, whereas the kiosk in all its technological efforts can provide choices but not with a friendly smile.
WHERE RETAILERS ARE CALLING THE PLAY WRONG
Now think about the retail store. When focusing on the in-store experience, so much effort today has much attention on the need to expand technology with Wi-Fi and mobile apps that allow customers to find everything they want simply by looking on their phone. The problem is that there are as many shoppers who may like it and embrace it as a great convenience, while as many if not more, who don’t.
My concern is that too many retailers in a panic are tilting too far to the technology side and by doing so will alienate the customer who prefers the more traditional in-store shopping. Too many retailers are not investing in effective training for store personnel and whenever something needs to be cut, it’s store employees.
HOW THE RETAILER CAN USE THE ADVANTAGE
Providing the in-store experience for both shopping styles guarantees the retailer will win. The retailer has the advantage through brick and mortar to offer the customer a great shopping experience with the opportunity to see, feel, touch and experience the product(s). Online, the same retailer can provide shopping/browsing conveniences on an easy to use website in order to deliver the customer a positive online shopping experience.
Retailers, be smart. Think about balance. How do you continue to keep the traditional in-store shopper happy while at the same time embrace the shopper who wants a quick in and out shopping experience through technological conveniences? If you feel you need to invest in Wi-Fi and an app that does everything in place of the store associate, fine. But beware of the customers who will not respond positively and will walk out if they can’t find a well-trained associate to help them when needed. Think about what in-store conveniences you can add for the “I’ll come to you only when I have to” customer, like a quick and easy area for in-store pickup and online returns. Think about what merchandise may make sense to set up in self-serve areas. But for every convenience you add for the “I’d rather do it myself” shopper, be sure not to take one away from the traditional shopper. Simply employ a good balance of both and always offer both shopping opportunities.
THE RETAIL OPPORTUNITIES ARE THERE
For those who think it’s all technology and only technology that can save the in-store experience, keep in mind that the e-commerce world will keep changing as well; one reason why many e-commerce sites are opening stores is because they already realize the touch and feel benefits of brick & mortar. In addition, expect to see more virtual stores online simulating the in-store experience. But remember, as good as that may be, it won’t replace the real thing. For the shopper who prefers technology and the do-it-myself mindset, he or she will be elated while the traditional shopper will not.
For retailers to truly win, be sure to keep a balance of both shopper styles. Technology is great and provides many benefits and conveniences, but remember the traditional shopper as well and you’ll have the best of both and no doubt, great success!
5 Reasons Why Brick & Mortar Can Start Celebrating!
There have been many articles written about the doom and gloom of brick & mortar and these reports mean everyone is shopping online. Well, it’s not true! Read on to find out the facts and judge for yourself what is taking place in retail stores today. In fact, the situation is only getting better.
1) The Improving Economy
Since January, we have seen a steady increase in consumer confidence, job growth, and low unemployment. Consumer confidence is now the highest it has been in almost 17 years, and unemployment is the lowest it has been in sixteen years. Moreover, we have just had two consecutive quarters of 3% GDP growth something again we have not seen in many years.
To date, retail has seen a 4.4% increase in sales since September 2016. In fact, there are retail chains that are posting comp store sale increases. Here are just a few that posted a second-quarter comp store sales increase:
Ace Hardware: 3.2%
Ross Stores: 4%
Home Depot: 6.3%
American Eagle: 2%
The point is, if these retail chains can see increases in sales, so can others. As the economy continues to get stronger, these numbers will continue to rise with more retail chains in the plus column and not the minus one.
2) The Internet is Not Where Everyone Shops
If we only shopped online then why do we continue to see customers shopping in stores and malls? The traffic is not what it once was, and part of that is due to the internet. But there’s a lot to be said about that. Over the last several years, we had a weak economy that was impacting all retail shopping. Moreover, we have had the most significant amount of competition with more and more retailers getting into each other’s space. All of these factors combined have given retailers less store traffic. It is not just the Internet’s fault. Yet brick & mortar still manages to get the lion’s share of business far beyond the Internet. Internet sales have increased and will continue to rise, but the actual amount of online dollar purchases versus in-store sales isn’t even close. To date, all US online sales totalled $294 billion with anticipated 2018 sales equaling $414 billion. Brick and mortar? $3.9 trillion or about 94% of all retail sales. And for those who do shop online, 55% of those shoppers would prefer to buy from a merchant with a physical store presence over an online-only retailer. Brick & mortar is here to stay.
3) Millennials Do Shop In Stores
While the economy was struggling during the last decade or so, we were led to believe that millennials don’t shop in stores. Well according to a CNBC article, the Northeast region of the U.S. has seen the highest "behavioral shift" between where the young and the old look for deals. In that region, 25% more millennials than baby boomers are visiting multiple stores when out shopping. 71% of millennials are visiting various stores in search of bargains, compared with 57% of baby boomers. And 67% of Generation Z shop in brick & mortar stores most of the time.
And now for the first time, millennials are buying houses. That means they’ll need items for those homes which means they’ll be visiting more stores and making more purchases. As millennials get older and have children, they will need to buy clothes and other items for those children. Sure, they’ll make some of those purchases online, but they will also visit stores to see, touch, and feel--many of the things they need to do before purchasing something, which means brick and mortar will have an opportunity to make more sales.
4) The Opportunities
Let’s take a good look at what is also keeping customers away from purchasing items. Here are some impressive statistics. 65% of consumers when shopping brick & mortar complain that physical stores didn’t personalize their discounts or promotions. That means there’s an opportunity to do more business with an easy fix. And 65% of customers shopping in-store stated that they were annoyed they couldn’t find the product or products they wanted. Lastly, almost as many as 60% of brick & mortar shoppers didn’t appreciate the lack of in-store help from associates.
So, retailers, wake up. Look at these three major problems preventing customers from spending money in your stores. Why drive them away? Just fix the problem, and you’ll be dancing all the way to the bank.
5) You Can Do It
The customers are out there, and they have interest in shopping your stores. Don’t let your competitors get the jump on you and don’t lose out on the opportunities you have. Take a good hard look at your in-store shopping experience. Make sure you have enough staff and focus on giving them the right training they need to do their jobs efficiently. Listen to your employees and let them tell you what your customers want, not the other way around. Most importantly, do everything you can do to truly wowyour customers by providing the best customer experience possible. Every customer that comes into your store is an opportunity to make a sale. Never lose sight of that.
It’s true that today the retailer has to work for the sale, unlike the days that merchandise just sold itself. Today, the consumer can check out prices and promotions at competitor choices while shopping your store. Don’t let that happen. See a customer in your store and treat them like they’re the most important person in the world. Don’t pressure them but make them feel wanted and valuable. Soon you’ll be generating more sales than you’ll be able to handle. The opportunity is there, so grab it.
Do everything right, and yes, you will be celebrating! Comp-store sales will be that good!
RETAIL IS FAR FROM BEING A THING OF THE PAST
It doesn’t take much to find so many articles, many of which regurgitate the same information, that are quick to shout the news of all the stores that are closing, retailers going out of business and retailers that are on the verge of bankruptcy. Of course, these writers praise the internet, namely Amazon as the cause for which all the tech people jump for joy. However, whereas some of what has been written is true, retail is far from being a thing of the past.
A RECURRING CYCLE
The truth is we are in a cycle, one that happens every twenty years or so as concepts, ideas, technologies along with consumers’ interests and desires change. Retail, once nothing more than the local general store, grew into what became the full-service department store in the late 1800s. Macy’s was founded in 1858 but started out as a dry goods store.
Then in the 1940s, the full-service department store became known as the “anchor” store as shopping malls were being built. By the 1960s shopping malls were everywhere but by the 1980s, malls were considered doomed if they weren’t enclosed and had a food court. So, during the 1980s the new malls had all the bells and whistles, including movie theatres and entertainment areas, while the old malls were being reinvented with enclosures and add-ons. But by the early 2000s it was time for another change. The Strip Mall, which was created to appeal to the customer in a hurry with in and out convenience, allowed customers to drive to the store of choice, run in, get what they wanted, and leave.
The strip mall also had a second phase which we now know as The Outlet Mall. In the beginning, the Outlet store sold left over merchandise from their parent store. But as time progressed and the concept became so strong, soon retailers realized the opportunity they had by stocking their outlet stores with knock offs of the higher quality merchandise now sold for a lot less. This new retail opportunity for the discount-minded consumer was and still is a huge success, but also a major threat to full price stores. Yet, retail has managed to survive with customers becoming educated and learning that the quality in the outlet is not the same as the full-price store. There are still many great deals and bargains but it depends on what the customer wants.
THE TRUTH ABOUT TODAY
So where are we today? Are there too many stores? Yes. Are many of them going to close? Yes. Are some retailers going to be forced to go out of business? Yes. But what we’re not hearing about is what’s next and I can assure you, it won’t just be the internet.
Each week, there’s another e-commerce business getting into brick and mortar. In many ways, these new stores will be the retailer of the future because they will open stores unlike old retail, but rather new and fresh with the latest technology, conveniences and very “cool” merchandise. And we’re not just talking about Amazon. Warby Parker for eyeglasses, Bonobos for menswear, Blue Nile for jewelry are just a few of the once e-commerce only businesses all opening stores. And many of them are already offering some very different brick and mortar selling concepts. For example, if you go into a Bonobos to try on the clothes, while you’re being fitted, the company is putting together what you need online and having it delivered to your home. This type of in-store opportunity will become as common to us in the future as bringing a newspaper coupon into the store was in the past.
These new brick and mortar stores will be more like Apple and a lot less like Macy’s of today. They will be exciting, alluring, and appealing to a new generation of shoppers. The old tired retail stores will eventually go away. Some retailers will be able to convert and survive and others, because of format and product, will not—but that’s retail.
SOMETHING TO REMEMBER
We have long forgotten about store names like Gimbels and Hudson’s, Caldor and Ames. Each of those chains had their time, but were later pushed aside as other retailers came into the market with newer concepts and appeal. We take it for granted today but when Kohl’s was taken over by private investors in 1979 and went public in 1992, it grew into being the second largest department store we have today. In the early 1980s it was still a new concept and many were not sure it would work.
What will retail look like in the future? We all have ideas of what it will be like, but none of us have a crystal ball. Usually, when we predict the future, it’s only partly accurate. But I do know that retail will never be a thing of the past provided there are humans on the planet.
Some of the newer inventions and concepts may start off strong and then fizzle out and some of the “this will never work” ideas may be a huge long-lasting success. Again, that’s retail. That’s what makes it fun, exciting and something so many of us love being part of. So, simply said, retail is far from being a thing of the past!Type your paragraph here.
WHAT MOST RETAILERS LACK TODAY? COMMON SENSE!
Many articles written today focus on the same issues such as the decline in store traffic, the increase in online sales, and how millennials prefer exotic vacations and dining out experiences rather than shopping. We read how technology is taking over everything and all the opinions claiming that the days of in-store retail shopping will be a thing of the past.
What we don’t read enough about are the 62% of shoppers today who prefer to shop in-store rather than online, according to a recent Retail Dive Consumer Survey http://bit.ly/2m8tMWG
And that does not take into account customers who buy online and in-store. So why are so many retail chains doing poorly? The real answer: they lack common sense. Here are 10 reasons that prove it:
The bottom line is that retailers have many opportunities today to increase their store sales. All it takes is understanding that when you have a customer in your store, you have a chance to make a sale. Do what it takes, engage and “wow” that customer. Go back to the retail basics which are the product and the price, but most importantly, service. Be different and give that customer the type of attention they deserve. If you do that, the customer will not only buy from you, but they will also look forward to returning and tell their family and friends about you. It’s just a matter of using common sense!