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.
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!
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!