Guest Post from Bloomberg.com
U.S. retailers eked out a 2.3 percent sales gain on Thanksgiving and Black Friday, in line with a prediction for the weakest holiday results since 2009.
Sales at brick-and-mortar stores on Thanksgiving and Black Friday rose to $12.3 billion, according to a report yesterday from ShopperTrak. The Chicago-based researcher reiterated its prediction that sales for the entire holiday season will gain 2.4 percent, the smallest increase since the last recession.
Retailers offered more and steeper deals on merchandise from flat-screen televisions to crockpots that, while luring shoppers, may ultimately hurt fourth-quarter earnings. Many consumers showed up prepared to zero in on their favored items while shunning the impulse buys that help retailers’ profits.
“You could get the same deals online as you could get in the store, and yet there were still a ton of people out there,” Charles O’Shea, a senior analyst at Moody’s Investors Service in New York, said in an interview. Going out to stores, “is part of the experience,” he said.
About 97 million people planned to shop online or in stores on Friday, with about 140 million intending to do so Thanksgiving through Sunday, the National Retail Federation said. That’s down from 147 million last year.
With more stores opening on Thanksgiving, sales were pulled forward from Friday, Bill Martin, ShopperTrak’s founder, said in a telephone interview. Sales on Friday fell 13.2 percent from last year, with foot traffic down 11.4 percent. Foot traffic for the combined Thanksgiving-Black Friday period rose 2.8 percent to more than 1.07 billion store visits, ShopperTrak said.
“The consumers really responded to Thursday’s openings, actually more than anybody anticipated,” Martin said.
Jennifer Doval had an easier time getting to the stores for her Black Friday shopping this year at the Mall of America in Bloomington, Minnesota.
“It’s just quiet -- I don’t know if it’s because it was open yesterday,” Doval, a 42-year-old stay-at-home mother from nearby Edina, said on Friday while shopping for clothes for her 12-year-old daughter and gifts for her parents. She arrived at 7 a.m. and was “shocked how empty the parking ramps were.’
The continued rise of e-commerce also may have kept some shoppers at home. Online sales rose 20 percent from last year on Thanksgiving and 19 percent on Black Friday, IBM Corp. said. Target Corp. (TGT) said it had twice as many online orders early on Thanksgiving morning as a year ago. Amazon.com Inc. lured shoppers by offering discounts as often as every 10 minutes during the holiday week.
‘‘I went a little happy doing Amazon lightning deals, and I got my toy shopping done last Friday at Wal-Mart’s pre-Black Friday sale,” Swati Parekh, a 44-year-old ophthalmologist in Towaco, New Jersey, who didn’t go shopping on Friday, said in a phone interview.
Faced with smaller crowds of less confident consumers, as well as six fewer days between Thanksgiving and Christmas than last year, retailers poured on margin-eating discounts to grab market share.
More than a dozen retailers also opened earlier or for the first time on Thanksgiving Day. Among the first-timers were Macy’s Inc. (M), Kohl’s Corp. and J.C. Penney Co., which is in the midst of turnaround efforts. About 33 million shoppers intended to shop on turkey day, said the NRF, a Washington-based trade group.
Wal-Mart Stores Inc. (WMT) said it served more customers on Thanksgiving than the 22 million who shopped on the holiday a year earlier, without providing a specific figure. The Bentonville, Arkansas-based chain processed more than 10 million register transactions from 6 p.m. to 10 p.m. and sold 2.8 million towels, 2 million televisions and 1.4 million tablets.
Some shoppers took advantage of the discounts and focused only on the items they needed while shunning impulse purchases of goods retailers have kept closer to full price.
Giselle Suazo, 28, and her husband Luis Aracena, 26, of Lawrence, Massachusetts, shopped with their 7-year-old daughter and three-year-old son at a Wal-Mart store in Salem, New Hampshire, on Friday.
Suazo, who was unemployed and in school at this time last year, now works as an intake coordinator at a home health services agency. While she and Aracena, who works at a power-supply company, plan to spend slightly more money this year than last, their budget remains tight after moving into a new apartment.
The family is shopping with a plan, and she prepared by looking at retailers’ websites last week.
“You’ve got to know specifically what you want to buy,” said Suazo, who already had two Barbie dolls in her cart marked down to $8 from $20.
While traffic at the Mall of America was higher than last year, shoppers planned ahead of time where they were going and what they were buying, said Maureen Bausch, the mall’s executive vice president.
There was “a lot of mission shopping, and you don’t normally see that until later in the season,” she said.
That’s bad news for retailers, who normally get about 20 percent of their holiday sales from impulse purchases, said Marshal Cohen, chief retail analyst for NPD Group Inc.
Thom Blischok, chief retail strategist with Booz & Co. in San Francisco, said every one of the 300 shoppers he spoke with on Thanksgiving and Friday had a list.
“They had an absolute plan,” said Blischok, who hit malls and shopping strips aroundParadise Valley, Arizona. “I found virtually no browsing.”
Some shoppers even walked away empty-handed. Katherine Miao said she had been at the Mall at Short Hills in New Jersey with her father, mother and sister for almost eight hours on Friday without getting the black high-heeled shoes she was looking for.
“The store had a blue shade on sale, but the black shoe wasn’t, so the manager tried to talk me into different black shoes,” said Miao, a 16-year-old high-school student from Randolph, New Jersey. “But I had my eyes on the first pair, and I ended up not buying anything.”
Sales have been undermined by wobbly consumer sentiment in recent months. Confidence (CONCCONF) among U.S. consumers, whose spending makes up about 70 percent of the nation’s economy, declined in November to a seven-month low, the Conference Board said Nov. 26.
This year, 65 percent of Americans said they were living paycheck to paycheck, up from 61 percent last year, in part because their purchasing power has been eroded by higher costs, according to Booz’s research.
The NRF has a more optimistic forecast and last week reiterated that U.S. retail sales may advance 3.9 percent to $602.1 billion during the holiday season, up from last year’s 3.5 percent gain. Online holiday sales will increase as much as 15 percent to $82 billion this year, the group said.
Sales in November and December account for 20 percent to 40 percent of U.S. retailers’ annual revenue and 20 percent of their profit, according to the NRF.
The term Black Friday is believed to derive from the myth that retailers didn’t become profitable until this day each year.
To contact the reporters on this story: Lauren Coleman-Lochner in New York email@example.com; Lindsey Rupp in New York at firstname.lastname@example.org; Leslie Patton in Chicago at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org
By Matthew Hudson
I just read another story about a retailer who did an event for a local charity. It was a canned food drive in which they asked their Customers to bring in canned food items and in return the Customers received a discount on their purchase. Another story told of a clothing store that did a “trade-in” promotion giving the Customer 10% off the purchase of a new shirt when they brought in their old shirt and donated it to the local homeless shelter. Both are examples of inspiring stories and great ideas for marketing.
But what is the one thing both of these stores have in common? You might guess something like visionary leaders or caring employees or creative marketing. The answer is they are both closed. Gone. Out of business. Not a very inspiring way to start an article, yet I hope you continue reading; otherwise, you might think the moral of the story is that charitable marketing is closing down stores!
The truth is that in each of these examples, as is the case with about 80% of what we see today, the focus was not on being charitable, but on making sales. In other words, the purpose of the event or drive was not to raise awareness for a need in the community, but a clever way to increase traffic into the stores.
Because of the heart or motive behind these events, they never wove themselves into the fabric of the culture of that retailer. Nor did they change the opinion or impression of the retailer with the community in which they were located. If you are running a retail store today, you know the dying breed is the Customer who crosses your threshold. You are seeing more and more people go online for their needs and less people coming in your doors. You are looking for a way to stop this trend and you might try one of these “events.” But the problem is you do not need to get them in your door, you need to get them offline. You need them to choose to come into your store because of reasons beyond selection and price (which is why shoppers go online and why we cannot compete.)
You need a conscience – a social conscience. Socially conscience retailers operate on four key principles.
1. The purpose of engaging in charitable work is to become part of the community where the retailer lives .
If you own a home in your town, you may be part of a neighborhood or homeowners association. You may volunteer at your kid’s school or help the local church down the street do meals for elderly people. The point is that you do things that serve the community where you live. Think of your store as your home. If it were your home, what are the needs around your home you see that you could meet like the meals you do at your church?
2. There is a regular rhythm to their activities.
If you want people to choose your store over the competition and to come in your door versus going online, then they have to see a regular rhythm of charitable activity. They must see you have a social conscience. In other words, when a Customer makes the decision to leave their current retailer to shop with you, they need to know that this is not a ruse to get them in the door. And if your biggest competition is online, then you need a weapon they cannot touch.
It’s not an event to these retailers. They put in place activities and behaviors that continually reward the Customers and not just one time a year during the “drive.” They weave this into their core values and every employee and every Customer knows about it. If you want to collect toys, then do it year round. The hospitals often get inundated with toys during Christmas, so much so, that they store a lot of the donations to be able to make it through the year. Otherwise, they would have kids who did not get toys for other special days like their birthday when they are in the hospital. If your store collected toys year-round, the children’s hospital would get these toys year-round and you would be establishing yourself as a value member of the community year-round and not just another retail store.
3. Sales growth is a byproduct of this core value and not its purpose.
If you go into charity for the purposes of creating a “clever” marketing campaign you will get a lift in sales, but no loyalty or retention from those Customers who participate. If, however, you institute programs that have lasting impact and effect and your focus is not about generating sales, but rather serving a need in your community then your efforts will be returned to you many times over.
4. They focus locally.
The best retailers find relationships within the community they are serving and serve them. For example, when we had our shoe stores, we wanted to develop a social conscience that related to a need in our community. At the time, the cat population was out of control. So, we put a cat in each of our stores from the local shelter. Customers would come into the store and the cat would do the “selling.” In fact, if you went to the shelter and adopted a cat, our store paid 50% of the adoption fee. After awhile, we became known in the town for this and we would get people stopping by with a kitten they found wandering the streets. They would say, “we know you guys help cats find a home so we brought them here.” Think about it – they brought the cat to our shoe store and not the shelter!
I cannot tell you the number of times we had people tell us that they shopped with us because of Hugo Boss or Kate Spade or Mezlan or whichever cat (we named after products) was in the store at the time. Even dog lovers would support us. At times, we even had people leave us a “tip” for our service and say “it’s for the cats.”
The point of this example is simply that instead of doing a drive or campaign, we looked around our community for a need, matched that with something the employees were passionate about and created a name for ourselves as “citizens” of the community.
For your store, it might be food for homeless, or sporting goods for the community center or books for the impoverished library. The key is do not look for the “obvious” fit. For example, we had shoe stores. And yes, before the cats, we founded our own charity called Sole Hope. We collected worn shoes from our Customers and “retooled” them for the homeless in our town. Then when Soles4Soles got their huge grant and became a national charity, we started supporting them instead. But the impact in our town was not there. We kept this program in place, but since it was not connected to a need in our community, it did not resonate well with our Customers. Our shoes were now going around the world. And while this was a blessing (and still is) it did not place our store into the hearts of the city the way our cat program did.
The purpose of this article is not to diminish the importance of the charitable things retailers do even if it is just one time a year. In fact, we encourage every retailer to do something for charity at least once a year. There is great work done through these efforts and its disrespectful not to recognize it. However, we are trying to highlight the difference between having a social conscience and becoming a member of your community meeting and serving needs of those who live and shop in your community versus having a sales conscience and putting together a clever event for July 4th.
If your store cares for your community, your community will care for your store. And when the community cares about your store, they do not haggle over price or “showroom” you; they are loyal ambassadors for your store. The Customer might even choose to buy in your store versus shopping online (even if it costs more) as they did for us. All because they wanted to reward us for caring about the community and city in which we all lived. And there is no amount of marketing money that could ever match the impact of that.
Weekdays After Black Friday Mean Good Shopping
The weekdays immediately following "Black Weekend" will be some of the best days to hit stores this year for those who like to avoid the crowds, according to Shopper Trak, a leading provider of shopper analytics. For consumers looking to do their shopping in a less frenzied environment than Black Friday, ShopperTrak predicts the following ten days will be the best because they will have the least amount of in-store traffic:
- Monday, Dec. 2
- Tuesday, Dec. 3
- Wednesday, Dec. 4
- Friday, Dec. 6
- Monday, Dec. 9
- Tuesday, Dec. 10
- Wednesday, Dec. 11
- Thursday, Dec. 12
- Friday, Dec. 13
- Monday, Dec. 16.
"There's a reason Black Friday and the Saturday before Christmas attract the heaviest crowds - retailers flood consumers with discounts and special offers on those days," says ShopperTrak founder and executive VP Bill Martin. "But quieter shopping days also present their fair share of deals for consumers, along with more attentive customer service and a leisurely shopping experience."
Historically, the majority of shoppers flock to malls on the weekends between Thanksgiving and Christmas. With four weekends between Thanksgiving and Christmas this year - compared to five weekends in 2012 - consumers will have fewer weekend days to complete their holiday shopping. The weekdays will see stores with fewer crowds and more attentive sales staff offering shoppers an opportunity to complete some of their holiday shopping without competing with the crowds. And although store traffic may be comparatively lower, weekdays offer retailers an opportunity to promote and move merchandise that remains after the weekends.
"Consumers are often more alert to sales and promotions than if they shopped on chaotic weekend days," says Martin. "Retailers can use traffic benchmarking reports and real-time analytics to better prepare their store and staff to seize selling opportunities on these slower-traffic days and turn browsers into buyers."
By Matthew Hudson
In today’s fast-paced business world, with its mass emails, multiple texts and continuous tweets, the most effective way to show customers or clients you appreciate them around the holidays is about as old-fashioned and low-tech as you can get: Send a card. In the mail. Stamps, handwritten signatures and all. This may seem a little quaint, like something your parents would do. But the gesture will strike a sentimental, traditional chord with recipients, and it's an excellent and easy way to connect with and improve your company’s business relationships. Take these tips to create a strong, effective message with your holiday cards:
Sign Them All
Ty Largo from Salt Marketing Public Relations and Design told the Phoenix Business Journal that he signed and sent 1,600 cards in 2012 to everyone involved in every aspect of the company’s operations, including vendors, clients and general business colleagues. He felt signing them all himself demonstrated a sincerity that wouldn't have been present had he simply ordered them with his name printed on them, a move that anyone can do.
Consider asking all your employees (if that's feasible) to sign the cards as well. This shows recipients that everyone shares not only in the company’s success in the past year, but in the general holiday sentiments and happy wishes for the year ahead.
Keep Things Neutral
Everyone has different senses of humor, and there are several distinct religious or cultural observances that take place at the end of the year. Amy Levin-Epstein, a writer with CBS News’ Moneywatch, suggests you include a secular message. This strategy potentially avoids accidentally offending someone you have a business relationship with who may not appreciate an overly religious Christmas card or an off-color joke.
Include a Picture
Signatures are good, and photos are better. Adding photos to your card gets the whole team involved and enables your recipients to put names to faces, a challenge when some products or services come from other parts of the country. Minted cards for Christmas include a variety of templates for holiday messages, photos and designs. Photo cards can fit nicely into standard-sized envelopes, and they're also a good size for many bulletin boards.
Don't Try to Sell Anything
Carol Klein and Sandra Nutting, authors at WritingCenter.com, discourage including a business card with your holiday card or gift. Your greeting card should be a nice, friendly gesture by itself, and tucking in your business card gives the recipient the impression you’re only interested in future sales. The recipient likely already knows how to contact you.
Go One Up
If your budget permits, give extra special clients something more, like a gift basket, plant or a tray of cookies. Many of these items can also be delivered to other parts of the country, which can work nicely for colleagues you may not know in person.
By Matthew Hudson
Another title of this post could be a line from the old Talking Heads song, Same as it ever was. (gotta love David Byrne) Anyway, I had a meeting last week with a group of executives and we discussed a topic that was exciting to them and repeat for me.
You see, this group of execs was different from the last ones, but it was the same company. They were telling me how they were headed down this new path - but by new, they actually meant old. I shared with them my experiences from before and how the idea had failed. And then came the magic words, 'oh, but this time it will be different!'
"Ah, yes, this time it will be different." We hear this line in organizations of all sizes, shapes and types. Whether for profit or non-profit, we have talked many times before on how the principles of corporate culture are the same.
So, why tell this story. Simple. Because when someone says to us "this time it will be different" what we look for is the change in their culture that supports that statement. 99% of the time, it is not a corporate culture change, but actually a personnel change. A new person is brought in to lead and they want to try an idea that was attempted before. Sometimes they do not even know that it had been attempted and failed. Often times, thought, they do, but they believe in the magical, mystical words "this time it will be different.'
When what caused the idea to die a slow death before was the culture, no one person or even one team of persons can make it work the second time around. While logically it might make sense that having more people in the boat rowing with you will make a difference, you have to understand that you are rowing upstream in the rapids of corporate culture. (insert image from all those river wild movies scenes you have seen)
I remember sitting at lunch with Milton Moskowitz at the "100 Best Companies to Work For" symposium. I had commented on the fact that I was impressed with all the new initiatives being presented by the various winners of the distinction who were asked to speak. Milton said, "my prediction is that 90% of these initiatives will never work. The company's culture will never accept it." (He knew I was a corporate culture guy, so he was speaking right to me.) The example he gave was paternity leave, which was the hot new idea being presented. He said, "most companies who add this benefit see no results. The culture of the company is such that a man would be afraid to take advantage of this benefit for fear of the repercussions."
Exactly. If the culture of the company will not except it, then it will not work. So, next time you hear those magic words, first ask the team, "what is different about our culture this time that will allow this to work?" After everyone looks at you bizarrely for this question, you can feel assured in the fact that you are actually saving the team a bunch of heartache and avoid them being cast in the sequel of Groundhog Day.
Tech Upgrades: Expense Them to Save Money
Tax expert and author Bonnie Lee says many small businesses do not know that Section 179 of the tax code, on expensing purchases of capital assets, sets the rules for writing off technology upgrades. According to Section 179, if a business buys a new computer or manufacturing equipment or other item that has a useful life of more than one year, it can write off the entire cost immediately, instead of depreciating the cost of the item's useful life. And, according to Lee, Section
179 expensing can be applied to software purchases and other technology upgrades.
Current law allows businesses to deduct up to $500,000 in accelerated depreciation; the amount is scheduled to drop to $25,000 in 2014, which is when Windows XP is predicted to phase out. Lee advises small business owners to consult tax and accounting professionals to see whether they can save on taxes by investing in new technology upgrades before December 31.
Lee, author of Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRA Doesn't Want You to Know, owns Taxpertise, which consults with taxpayers in all 50 states and is based in Sonoma, California.
Guest Post from Jennifer Shirkani, author of Ego vs EQ
Make no mistake about it, everyone watches what you do. As a retail leader within an organization, your behavior - for good or for ill - is the primary model by which everyone else acts. People will follow your manners, conduct, even writing or presentation style. It's not a bad thing, necessarily. What is a bad thing is to underestimate or abuse it. For example, when the leader jokingly calls out an employee for bringing lunch from home - while the rest of the team orders in - the employee may quickly calculate that to fit into this culture, she has to give up her healthy mid-day meals and up her lunch budget. Simple statements and actions often take on great weight when it's the leader who's making them. Individuals want to please the leader, out of respect, and because they often perceive their jobs depend on it. So they take each and every word and action by the leader seriously, even when the leader says something off-handed or even in gest.
Whereas the ego can make it easy to focus on self - and forget how others' see you and interpret your behavior - a sharpened EQ reminds you to step into other people's shoes and observe yourself objectively for a time. What is it that others see when they look at you? Do they see a leader who runs chronically late for meetings or who exempts oneself from company policy and values? Or, instead, do they see a leader who embodies company values, respects and honors employees, and understands that even little actions by a leader make a big, important statement about the organization and its culture?
Just as ego says, "I am special," EQ reminds the leader, "I have a special role to play and I am watched." Where ego says, "I can do as I please without affecting others," EQ says, "My own behavior is my primary tool of influence to the group." When EQ is activated, there is a clear awareness of how self affects others that helps the leader to make the kinds of choices needed. EQ tells the executive to leave the late-night party at the conference at 11PM, not 2AM. It reminds the leader to pop onto to the factory floor and say hello to the individuals who won last year's quality award before rushing off to the next meeting. It makes the sales director think twice before sending out an email to the team at 3AM, knowing that they might interpret it as a sign that the boss is losing sleep over an issue, not that she got back from a late-night flight, jetlagged, and is catching up on work. EQ reminds the leader that his every move is carefully watched, then interpreted, and often magnified.
- Are there areas of my work where I preach one thing but do another?
- When it comes to company procedures, do I hold myself accountable or act as if I'm above the rules?
- Do I behave pretty much the same way I did when I was younger in my career or have I matured into the leader my people need me to be?
- When is the last time I was given tough feedback about my behavior that surprised me? Did I make a change?
By increasing your awareness of how much you are being watched practice putting yourself in other people's shoes so you can start to better understand how your behaviors may be perceived. You can use the three R's to help you stay on track.
First, recognize the behaviors and choices you engage in (self-awareness) that may be judged and interpreted by others. Are you setting a positive and professional tone at meetings or can you come across as a little too casual or even sarcastic?
Which departments are you staying connected to and which, if any, are you neglecting?
Just as you size up others and make mental judgments, any area of your leadership and personal conduct is ripe for judgment or interpretation. Are you paying close attention to how you act and interact so you stay aware of your potential influence on others?
Given that you are being watched, and that your behaviors as the leader hold great sway over the group, it's important to take the time to read others (i.e., have empathy).
How might your behaviors be perceived by your team and your people in a given situation? You don't need to be psychic, just look for cues and helpful information.
Are you being mindful and paying attention enough to assess what the immediate situation calls for from you? In a group setting, note the non-verbals, such as body language, being displayed to help you get a better read.
It can also be helpful to work with a coach, who can offer you an outside perspective and help you empathize with others. Coaches give new sight where there are currently blind spots. With a better awareness of your own behaviors and insight into the ways they may be perceived by others, you can make adjustments (i.e., use self-control). This may mean back-tracking, like making an apology for inappropriate past behavior (like chronically cancelling meetings).
Other times, it may mean adjusting future behavior, like scheduling an appointment to visit frontline workers you missed on your last site visit or putting a special thank you to these workers in the upcoming newsletter.
As a retail leader, you are allowed to be human; your EQ is there to help you make the best impression you can on others, whether from the start or to recover from lapses in behavior or judgment. People aren't drawn to perfection; they are inspired and influenced by vulnerability, humility, and courage.
As a leader, people look to you for guidance, validation, and culture setting. How you act, in each and every moment, has tremendous influence over your team; choose your behaviors as if the organization's success depended on them.
By Matthew Hudson
We are all conditioned to help ourselves when we go out and buy something. Many retailers have a requirement to fill a position to keep the business moving, but that requirement is a warm body. Any high school student can work a cash register, organize inventory and “pep-up” the storefront, after all, they are just there to scoot by and get a paycheck. High school students aren’t the only ones, but interns, and temps and too often, even the full-time staff, are just trying to fill in the block of life for their resume and experience portfolios.
The truth is that these types of employees – the ones that are on their way somewhere else – can do more harm than good to your brand. Shopping should be an experience for the Customer, and often becomes a chore due to those retail sales employees who can be like vultures, sniping new customers and making them try on new clothing or worse yet, yell across the store at you as soon as you walk in (a common practice these days that does more harm than good.)
Remember, shopping is an experience that you engineer and if you want repeat customers to help your retail store thrive then each Customer that walks in the door should be worshiped. In other countries, they have customer service right by waiting hand-and-foot on customers to the finest detail. Many retail stores are forgetting about this compassion and moving customers through the store like on an assembly line. Nobody wins with this approach. This is an experience, but not one a Customer is eager to repeat. You must engineer and experience they want to repeat time and time again.
Customers that need assistance will let employees know by their body language, when a Customer crosses the threshold into a store, there is already anxiety but it is intensified when employees are lethargic or over excited to sell products. At least let the tint change on their glasses when they come in before pouncing. Always acknowledge their presence, but do so in a manner that is welcoming, not scary. There must be an even balance of customer support and personality.
People that are lethargic in your retail store need to be mentored to create a positive experience. The incentive for employees should be to make someone enjoy their visit even if they decide not to buy anything.
Employee demeanor is key to maintaining a high level of professionalism and protecting the integrity of the retail store. If employees cannot satisfy a smile, then they can go work fast food, because in retail, the experience, and personable employees that can relate to customers is the real success to have your retail store thrive. Instead of worrying about numbers, worry about how the customer feels – worry about the Customer experience.
When hiring, remember to hire people who fit your culture. That means they may not have years of experience, but their personality and core values match the personality of your store. And if that's the case, then naturally the experience they deliver with a Customer is consistent with the brand you are trying to build. I have hired more people from the drive-thru line at fast food chains to run my cash register in my stores than from anywhere else. If the person working at a McDonlad's all day can take the time to make me smile, then they are someone who naturally smiles. (not that McDonald's is a bad place to work, but I think you understand.) And that is how you engineer an experience.
By Rick Segel
LOYALTY IN RETAIL IS DEAD
That’s the bad news The good news is……..
We can still make customers loyal to us but we must gain that loyalty in a different way. What I am saying is “blind” loyalty is dead. We can no longer expect customers to be loyal to us just because we are the only show in town. We have the internet that is full of well-trained marketers that are hunting for business. Having said that, the local merchant still has certain natural advantages that can create loyalty. The biggest advantage is they know the market better, they know their customers better, and they generally know the other merchants better. In other words, they know how to experience engineer their business. So let’s breakdown those three natural advantages.
1. Knowing the market better. How many buyers from a chain store truly know who they are buying for? The independent retailer knows the marketplace because they are from the marketplace. But let’s not have a false sense of superiority about this. The chains still ask their customers, do focus groups and ask questions to better understand the marketplace. So you might have the natural advantage, but the issue becomes what are you doing with this advantage to better serve your customers? Do you schedule your own focus groups just to ask your customers their opinions? Just asking your customers their opinion is a form of flattery or a compliment because you are saying their knowledge is important to you and how and why they like the products we sell is valuable to us. Plus it’s important to learn products you don’t carry and could or should. This is a very valuable tool.
2. Knowing the customer better. Again the local retailer might have gone to school with a particular customer - BUT that’s just the tip of the iceberg. We need to dig deeper to get as much information about that customer as possible. This is where our employees become gathers of valuable pieces of information about the customer. These are the categories of information we need to capture.
REMEMBER “THE MORE YOU KNOW ABOUT THE CUSTOMER THE EASIER IT IS TO SELL THEM”
The following categories of information are the types we need to collect from each customer
a. The Vitals - Name, address, phone number and mobile phone number for texting messages, & email address
b. Products - What categories of merchandise the customer prefers to buy.
c. How do you reach them - The preferred method of communication. Some people love to text while others like a phone call. The best message is worthless if no one is there to receive the message.
d. Their Preferred Price level - Here are the price levels:
Regular Price- They see it they like it and then they buy it. The problem is there is a real shortage of this type of customer!
Incentive Buyer- These folks just need a reason to come to the store. It might be just a phone call or a text or email them. They will even respond to a 10% incentive First Markdown or 20% off offer. These are the smart shoppers. They want good quality and timely merchandise. But they want a little extra if they are going to spend any of their hard earned money with you. They want an edge.
Clearance Customer – This is one of the two types of customers we aren’t overly fond of. They only shop when the store is 40 to 50% off. However, they believe they are your best and most loyal customer.
Bottom Feeders - These folk are easy to recognize. They are wearing striped shirts and plaid pants. (think Cousin Eddie from Christmas Vacation) They have never paid full price for anything in their entire life. They usually shop “Going Out of Business Sales,” flee markets and auctions. They will come out in droves if you are having a “Down-and-Dirty-Must-Get-Rid-of-it -ale. Don’t waste your money on slick brochures cause an announcement on an old mimeograph machine will do just fine. Just say. Good stuff cheap. BUT don’t forget they also think they are your best and most loyal customer.
In additon, knowing the customer’s personality types can pay giant dividends
The Demanding Type - They want to be in control. Don’t fight them let them just have their way and compliment them for doing a good job
Analytical Type - These are all the engineers and accountants of this world. They love facts and figures. They want data.
The Socializers Type - These folks want to buy from someone they like. They want to buy from a friend. Facts and figures don’t empress them. But a smile and thank you will go a long way.
The Belonging Type - These are the people that love to use the word “MY” a lot. My garage, my store, my lawyer, my, my , my. They think they own the store and you just ask their opinions.
3. Knowing the Other Merchants Better. This comes in two different varieties:
a. Know your Competition. – Don’t let your customer know more about your competitor than you do. Today there is no excuse for not knowing everything about your competitors. We can go to their websites, get their emails, frequent their Facebook sites, and get their Tweets. No excuses for not knowing
b. Know the other Merchants in your Community. WHY? Because they will refer you more than almost any other source. Not to mention there is also a community pride that goes along with supporting your neighbors. Yes Loyalty is Dead but there are ways to avoid the normal pitfalls retailers tend to find themselves. The one area I didn’t mention because it is the most obvious. Constantly plan EVENTS. Make your store a place to go to for more than just buying stuff. Have classes, have celebrations, and bring people into the store and you will be surprised how they can end up being customers and even LOYAL CUSTOMERS.
Listen to the latest episode:
"Empowerment - When Policies & Culture Collide"
- What happens when the culture is not aligned?
- When can the culture hurt my business?
- Is it the employee or the culture?
- How can signs impact your culture?
- What did Zappos.com do to win this battle?
Just click to listen. Or visit our website from your mobile device to download our app.