There is no question that major socioeconomic and technological shifts have changed the game of business. Business is now forced to play by a different set of rules. Those rules, according to popular OPEN contributor Barry Moltz, are reminiscent of how things work in a small town.
"When every customer can now talk directly to each other, it’s like a small town," he writes in a new book called Small Town Rules, which he coauthored with Becky McCray, the founder of Small Biz Survival. "When people listen more to what your customers say about your company than your advertising, it’s like a small town. When it now takes multiple jobs to support a family, it’s like a small town. When the individual human voice is valued over corporate mission statements, it’s like a small town. When everyone online is trying to band together in small communities, it’s like a small town. When everyone wants to buy their products locally, it’s like a small town."
The point is that if every consumer of every company now behaves like they live in a small town, business must now be conducted on a more human scale, and companies now need to play be a new set of rules–rules apply to small businesses and big brands alike–no matter how big or how urban.
Retailers witnessed exciting new developments on both the industry and legislative sides in March 2012. This year’s unseasonably warm winter continued into March and helped give a noticeable boost to consumers’ moods and retailers’ sales. On the legislative front, Congress took steps in the right direction to reauthorize federal transportation funding, and the Senate held a hearing that would help boost travel and tourism to the states by reducing the visa application process – both welcome sights to NRF and retailers alike. Read on below to see what else was hot in March.
- Continuing the trend for 2012, NRF’s 4-5-4 calendars were another big hit in March as visitors wanted to be sure they have the correct dates starred for when retailers report the previous month’s sales numbers.
- The release of NRF’s Easter survey conducted by BIGinsight was popular as retailers were excited to see that rising gas prices weren’t going to deter spending on Easter goodies. Shoppers said they intend to spend $16.8 billion this Easter, a record for the survey
- The exciting news of February marking the 20th consecutive month of growth for the retail industry saw also saw a large amount of traffic last month. According to NRF, February industry sales (excluding automobiles, gas stations and restaurants) increased 0.5% in a month favored by unseasonably mild weather.
- Gearing up for NRF’s Loss Prevention Conference and EXPO, June 20-22 in New Orleans, retailers wanted to know more about honoring loss prevention and law enforcement professionals for their outstanding work with NRF’s 2012 Loss Prevention Awards. The two awards recognize LP cases and a law enforcement professional or agency that has made a positive impact on their company, community and the retail industry as a whole. The winners are recognized on stage in front of more than 2,700 of their peers
- As NRF led the buzz in discussing the dirty laundry on Tide thefts in America, retailers turned to NRF’s2011 Organized Retail Crime Survey for insights and statistics from senior loss prevention executives representing 129 retail companies. The survey chronicled retailer and legislative efforts in battling organized retail crime rings across the country last year. Stay tuned for the release of the 2012 survey this summer.
Post-college poverty may now be the norm as millennials struggle to find jobs and cope with large amounts of college debt, a trend that's worrying retailers who cater to the younger generation, as well as those who depend on consumers who trade up to higher-end brands as they get older. Retail industry experts also say that consumers who come of age during tight times may hang onto the lessons of thrift long after they've attained financial security.
Retailers Look to the Department Store for Salvation
Department Stores May Have Ceded Power to Specialty Shops and Web, But Retailers of All Stripes Are Embracing Power of Bricks And Mortar
Whatever happened to the department store?
When they emerged in the late 1800s, department stores had everything from tea rooms to art galleries to live music, all housed in architectural splendor. For most of the 20th-century, department stores reigned as the epicenter of commerce and a hub of social activity. They were where people shopped for everything from electronics and home goods to clothes and appliances.
A rendering of a Liz Claiborne shop, which will be one of the 100 shops in JC Penney's newly unveiled Main Street concept.
Then shoppers' focus shifted from downtown areas to the suburbs. Teenagers emerged as a new, powerful purchasing force. Department stores slowly relinquished their dominance to specialty stores that catered to niche consumers with specific tastes. The final insult was the internet. The web gave shoppers the ability to easily compare prices, igniting a price war that put department stores at a further disadvantage.
Today, department stores are a shadow of their former selves and have shed many specialized services, such as gift wrapping and tailoring, while winnowing their product selection. Each is now known for just one or two merchandise categories, if it's lucky: Sears is synonymous with tools and appliances, whileMacy's and Kohl's dominate in fashion and home goods.
Sears Holdings Corp.’s home appliances chief is leaving the company, the Tribune has learned.
Dev Mukherjee, president of the home appliances business at Sears since November 2010, plans to leave the Hoffman Estates-based retailer by the end of this week, said Sears spokesman Chris Brathwaite.
Sears, the nation’s largest seller of appliances, didn’t give a reason for his departure. The company expects to announce a replacement “in the next few weeks,” Brathwaite said.
Mukherjee, a former marketing executive atMicrosoft Corp.andIBM Corp., is the Sears third appliance chief to leave the company in four years. He joined Sears in 2007 as senior vice president of innovation and was named head of the toys and seasonal business in 2009.
Mukherjee’s departure comes two weeks after Sears swung to a $2.4 billion loss for the fourth quarter on a 4 percent drop in revenue, dragged down by sales declines in appliances and consumer electronics.
Sears has been trying to revive its core appliance business, including its marquee Kenmore line, for years to combat increased competition from big-box rivals including Home Depotand Lowe’s. Appliance sales account for about 15 percent of Sears Holdings’ overall sales.
In an effort to boost revenue, Sears began selling its in-house brands outside of Sears-owned stores for the first time. Craftsman is available at Ace Hardware and Costco, while DieHard batteries can be found at Meijer. The retailer has yet to sell Kenmore, the core of its business, outside of Sears and Kmart stores.
Sears announced last month that it plans to spin off its small-format hometown dealer stores and outlets and sell 11 stores to raise cash and shore up its money-losing retail business.
Mukherjee took the top appliance job from Doug Moore, a former Circuit City executive, who left Sears in late 2010 after two years in the post. Tina Settecase, who had run Sears’ appliance business since billionaire Edward Lampert took control of Sears in 2005, left the company in 2008.
I’ve been reading the Steve Jobs’ biography and recently saw an interview with a reporter asking him about being successful in business. One of the key themes that is continuously repeated is how important it is to work and get involved in activities that you are passionate about. It struck a sensitive part of me because my positioning statement (the line that comes after your company name) is Retailing is my Passion.
I have two other sets of business cards that say Marketing is my Passion and Business is my Passion. That is as honest and straight forward and, according to me, as accurate as a statement can be. I love being in business, I love marketing any business and retailing has been my life. Having said that and looking back over my career, I realize that the things I have been most successful in are the things that I am the most passionate about.
I recently worked with the owner of a business in Canada who is as passionate a person as I have ever encountered. I related so well to her because I could see myself in her and see the successes and the dark side of passion that can cause pain, hurt, and regrets. I have been described as a person whose greatest asset is my passion and my greatest detriment is my passion.
At first, when this woman would have a meltdown, I thought she might have been unstable or just had the shortest attention span on record. She would, as I have, go from ecstasy to the deepest of depression over the simplest issues. Why is passion so good and why is passion so bad? When someone has passion about a topic or an activity, they don’t punch a clock, they don’t complain about what should or should not be done, they do whatever it takes to make it work. They look at every knock as a boost and they never look at things as failures but rather the steps that one takes in order to be a success.
Failure to them is not an option because they never look at failure as a negative. When we are passionate about something we become so highly focused that hours seem like minutes. I have a friend of mine who is a passionate poker player and can play poker for 10 to 15 hours straight and think nothing of it. If he has to go to the theater with his wife, he is constantly looking at his watch and a layer of sarcasm permeates every word out of his mouth. How should we treat passion within our lives?
The first and most important point is to not settle for any activity, job, or friend that you are not passionate about. The last two years that I owned a retail store were probably the most challenging time of my professional career. Was the business doing well? Yes, it was. Was the staff loyal, dedicated, and experienced? Absolutely they were. Out of 36 part-time employees, 20 of them worked there for more than 15 years. So what went wrong? What happened to my passion for my store? It was seduced by a greater passion for writing, speaking, traveling, and making a difference in the lives of people who I related to because of my background. The excitement of multiple sales was replaced by the challenge of writing speeches, sharing ideas, and performing literally around the world.
I guess some people could call it the alienation of my affection but the advice that I received was simple and to the point. If you don’t love it – get out of it! This is the same advice I gave to this retailer in Canada. She would go from extreme highs to extreme lows. My advice to her was to harness her passion and remember one quote that I say to myself at least once a week and often even more – “we are never as good as our greatest victory and never as bad as our worse failure.” Realize that our passion can open up doors and can be the direct route to success. The reason for that is that people want to associate with passionate people.
We want to do business with businesses that are passionate about their business and industry. We avoid doing business with those negative types who only want to focus on how bad things are, whey they cannot do something, why it will never work and live their lives like a person who keeps saying “poor me.” At least with Christopher Robbins’ donkey Eyor you know what you’re getting all the time. If you’re a passionate person you can be all over the board. The interesting part of the store owner in Canada was that she was fully aware of this irrational behavior, and yet had problems recognizing and controlling it. Her key to solving her problems became easy because she realized that sarcasm replaced enthusiasm.
What’s my advice? It’s not running away or avoiding these negative people, yet professional after professional will tell you to avoid dealing with people who have these tendencies and traits. You could do that, but you’re going to miss out on those moments of magic when that passion and enthusiasm permeates the air and makes us feel unstoppable. I will follow a leader who is passionate. Just as logic makes our customers shop – emotions make them buy. Be a real friend and tell your friend when the sarcasm occurs. You will be doing them a big favor… that is if they talk to you afterwards.
Have a great week.
This week I had an experience with a marketing firm that defies reality. Let this be a lesson to all of us. I had a wonderful face-to-face meeting with this marketing firm that I had planned on using and recommending to my readers. I was so impressed with their ideas and observations, and following our face-to-face meeting, I was convinced that the chemistry was just perfect. I even recommended the firm before signing any contract.
Our meeting was just about perfect with one small exception. They mentioned that the first phase of working together would require them to prepare an expensive and extensive plan. When they mentioned it at the meeting I bristled a bit because over the years I have been burnt by many companies which love to prepare plans but never seem to have them implemented. My recommendation was to implement some of the action steps and after a few months of a mutually profitable relationship where trust had been established, then I would invest in the expensive plan. Other than that the meeting was great.
I then received a written proposal outlining the plan which needless to say took me by surprise considering it was the only thing I objected to. I was terribly disappointed and called up to share any necessary changes. The principal of the company set up a time for a telephone conversation which was later canceled due to a doctor’s appointment. We rescheduled the meeting knowing that it would be taking place while I was driving. I even called in to let her know I was a little early. However, she sent me another e-mail again canceling the meeting. Of course I was driving and really didn’t get a chance to review my e-mails. At that end of the day I wrote and asked what had happened and questioned if they had decided to go in a different direction.
I received a curt response indicating an e-mail had been sent and was questioning why I thought she was untruthful. I wrote back and said if I thought you were untruthful I would not want to meet with you at all. I have learned over the years that when someone says “you can trust me” or “I am honest” or “I am truthful” they are typically the ones you should never ever trust. Why are they even thinking along those lines?
Then I finally have a telephone meeting with the principal of this company who gave another pitch for the expensive plan. I was starting to lose patience when she wanted to know what happened to my previous firm, which indicated that I was perhaps a problem account. I was more than a bit surprised but I stepped back and shared my philosophy on disagreements and how they are truly a healthy step in understanding and compromise. Ask any business person-- they will always share a story about how one of their best customers started out on a bad foot, but then went on to become one of their best and most loyal.
I actually forgave some of the principal’s sophomoric communication skills and I was willing to give this company an opportunity to do business with me and even with you. To my surprise I received a voice message saying that the company had decided to go in a different direction, which is what I had asked them a few days earlier. I only have pity for this company. As the expression goes “if it’s too hot in the kitchen, get out.” Difficult customers are still customers. Difficult people are still people. Difficult situations are opportunities.
Sometimes we have to make our skin a little thicker and don’t let the minutia of the day-to-day he-said-she-said trivia lose sight of the big picture. Because I disagreed I was no longer a prime prospect when in reality we were establishing a much stronger bond because of the conflict in the initial dealings. Always remember to keep your friends close but your enemies closer. It is much easier to deal with someone whom I have to be careful with every word than to deal with someone who I like. You work harder in making the deal and the deals tend to last longer. We dot every “i” and cross every “t.”
All things are for a purpose and I will be signing a contract with a firm that was more responsive to my needs and understanding of my concerns and my readers. I believe that every deal must be a win/win between two parties. Although the road is not always smooth, when two parties overcome obstacles and make things work, it makes for a stronger and long lasting relationship. Maybe the title of this article should have been Opportunities Lost but from my position it is a new door opening.
I want to share three examples of sheer stupidity.
Is the tail wagging the dog or is the dog wagging the tail?
This week I had an eye opening experience that made me feel so stupid that I am compelled to write about it so that you can learn from my mistakes. If you had five customers come into your store and ask for a specific product, would you go out and buy it? YOU BET YOU WOULD. We would pat ourselves on the back for being attentive and listening to our customers by jumping on a trend as early as possible.
We all love to say that we enjoy listening and reacting to our customers. That’s what we call good customer service. Now let’s update that experience into the social media world by writing an article in your newsletter, blog or Facebook. The article you write is about a new product that you just got in. It might not even be an original article by you. You could just offer a link to an article about the product. Now what if your customers responded to your article or link about this new product and asked if you had the product in stock or where they could buy it? Would you think you might have a hot product? Of course you would. What if a hundred customers wrote to you and told you how great it was and expressed an interest to buy it? How excited would you be? How stupid do you think you would feel if you realized you never responded to even one inquiry? Pretty dumb!
I was interviewing a new marketing company that analyzed the data on my website. They even could tell me how many people read an article and passed it on to friends and colleagues. They asked me how dramatically my business changed since April. I was puzzled and didn’t know what they were referring to. They then informed me that the traffic and buzz surrounding 2 of my articles in the month of April generated an additional 67,000 views of these articles. Shame on me for not knowing that, shame on me for not responding to that interest and shame on me for not offering the type of products my readers were interested in.
Can this happen to you? Yes and it’s happening every day because we are getting feedback from our customers in ways we never had. The customers didn’t call or write and say they wanted it, but they expressed interest by sharing with their friends what I wrote. It happens because we add a link that we don’t totally read and we don’t have the time to read or understand all of the analyses available. The lesson to be learned is to monitor the increase in traffic to your site, blog or any social media component. It could change the direction of your business.
Don Quixote lives.
State and federal governments need money; there is no question about that. Jobs and the unemployment rate are the single biggest domestic issues our country is facing. Small businesses generate more jobs than any other part of the economy. Retailing is one of the biggest components of small business. Having said that, how stupid can the governments, both state and federal, be that online merchants can sell products across state lines without having to charge a sales tax. That gives an online merchant a 5, 6 or 7 percent advantage over the local business. That hurts the local business and it’s an unfair advantage, and the state is losing out on all of that revenue. THIS MUST CHANGE!
I feel like Don Quixote fighting windmills when I mention this to politicians who say “I would never raise taxes.” Don’t you get it? You’re not raising taxes-- you’re just enforcing the taxes that already exist. There will be more to come on this.
It’s more than money.
Being in the retail business we have an advantage in hiring and staffing our businesses. That advantage is our ability to hire people who like what we sell. People who work in jewelry stores like jewelry. People who work in clothing stores like clothing. People who work in car dealerships like cars. The common denominator is they are there for more than the weekly paycheck.
The son of a friend of mine was looking to change jobs. His approach in changing jobs was not the same as most of us. He didn’t send out resumes or respond to ads. He sent out a few strategic letters on ways those companies could increase their revenues and profits. Three letters went out and they all responded. They all invited him to their company to explore his idea. Two of those companies made him offers that are truly beyond the comprehension of the average person – myself included. Granted this person is brilliant with two pristine degrees from the finest colleges in the world. His approach applies to every employee we have.
If we could only teach, train or create the mindset for our employees that this young man adopted which was people will pay for great ideas. I was working in a downtown and this merchant was bragging about this one employee who said “I have an idea how we could rearrange the store and do more business.” The owner liked the idea and told him to go for it which meant he had to work extra hours after the store was closed. The owner didn’t care because he believed in the idea. The bottom line was that employee needed to earn more money and he did it in a creative way.
So the next time one of your employees says “I need more hours or I need more money” tell them you need more ideas to justify what they are asking. Employment is a partnership and it must be treated that way. It must be a win/win and when we get a buy in from our employees, it becomes magical.
Being brought up in Boston, we took the legendary Filene’s Basement for granted. I remember as a small child my Auntie Bea and her friends would travel into Boston by public transportation which meant traveling on a bus and an underground train. The ride in was a challenge because they would leave early in the morning and be commuting with all the people who worked in Boston. The ride back was even worse because they had to take all of their purchases in bags on the train and bus. This was a ritual that would be repeated at least once or twice every month.
When I got old enough to start traveling outside of New England I was amazed how many people would ask about Filene’s Basement. Filene’s Basement had an automatic markdown pricing guarantee that insured merchandise would be moving out of that store faster than any other retailer. I don’t recall the exact terms but the merchandise was given to charity after I believe was 5 weeks on the selling floor.
One of the reasons why Filene’s Basement was so well known country and worldwide was because they would buy out complete inventories of major department stores. At one point that type of merchandise would be referred to by other retailers as merchandise no one wanted.
Filene’s Basement was known worldwide for their bridal gown sale. It came to be known as the “running of the brides.” People would fly in from other parts of the country just to go to this sale. Brides would join forces with their bridal party in a military type style to strategically snag that wanted piece of merchandise. People would be lined up the night before just to go to this sale.
So what went wrong? How could a store with that type of reputation falter? Before we get to that, understand that Filene’s Basement was purchased by another legendary retailer, Syms. Their slogan stated “where the educated consumer is our best customer.” You would see both the father and daughter constantly wherever a Syms was located and they would be talking about educated consumers.
So what happened? There will be plenty of post mortems as to the shortcomings of the management and how they did this and didn’t do that. Let’s not look at it from a retailer’s point of view. Instead let’s look at it from the customer’s point of view. The real lesson to learn was that they were no longer relevant in today’s marketplace. Certainly a bridal event as legendary as “the running of the brides” at Filene’s Basement will probably be sold off as an asset as part of the brand by a bankruptcy court.
Someone will buy that name and make some money for a few years but the Filene’s Basement name/brand that was once featured on 20/20 by Barbara Walters was named the second biggest tourist attraction in Boston. It has been synonymous with the city since 1911 but is probably worthless. The Syms brand that they spent millions of dollars on developing is also probably worthless because neither brand means or represents anything in the mind of today’s shopper.
What their founders did to make these stores great includes a sense of adventure, a spirit, not being afraid to do something different and having the belief in their convictions to dare enough to do that different thing. Many people will write that the reason why these stores died was because they owned the market in tailored clothing. Yes, that is true, but people are not wearing suits and tailored clothing the way they once did. Instead of trying to develop new markets, they waited for their market to return.
I have two comments to make. First, saddle shoes are coming back but I’m not going to buy a pair on sale now and wait for their return. Second, when the horse is dead you need to get off of it. It was time to reinvent yourself to do what your founders did to make it a leader rather than a follower.
Are you waiting for your market to return or are you creating a new market? I had a discussion with an older fellow who said “America is going to pot – we don’t make anything anymore.” My response to him is “your grandchildren will be working in fields that haven’t even been created yet.” Whoever thought that people would be making a living from EBay or Google or a start-up company like Apple? Don’t stop the world because you want to get off, get into the world because you want to go for the ride of your life.
When people hear that Filene’s and Syms went out of business they say “isn’t that too bad.” Don’t have them say it about you.
Watch the video Memories of Filene's Basement from Michael Bavaro's upcoming film "Voices from the Basement".
This last week for me was the travel week that was. I traveled to Yakima Washington, Milan Italy and then to Raleigh, North Carolina. It included 30 hours in the air and another 20 hours by bus or car. I saw the Alps and the Cascade Mountain ranges. I saw the magnificent Lake Como in Italy as well as Leonardo Da Vinci’s Last Supper.
Those memories will last a lifetime but the most interesting part about travelling are the people you meet and the situations you find yourself in. Having said that, there is no question that my experience in Raleigh, North Carolina was the most interesting. I was asked to speak to a group of professional consultants who work with the chronically disorganized. They are primarily professional organizers with a myriad of specialties.
They needed a retail professional to explain what retailers do to entice, seduce, and lure people into our stores and buy. The reason for that is that shopping is the great distractor. Shopping has become an addiction to some. We make people forget about their problems and make them spend money.
Some people are spending beyond their means and some people have become hoarders, people who won’t throw anything away. As I described in the speech –My job is to have more people come in to a store and buy more. Your job is to have your people come in to retail stores less and buy less.
Then someone asked me if I was going to teach their members the ways to get people to buy less? They wanted me to wipe out 40 years of retailing and marketing experience and everything I ever believed in so that a small minority of people could be helped. I said, “NO WAY!” First, I wasn’t qualified to develop a protocol to stop someone from buying. Second, why would I? Wouldn’t that be compromising who I am and what I believe in?
Not everyone abuses shopping, just as few people percentage-wise abuse food, booze, or even abuse prescription drugs. That doesn’t mean that everyone is out of out of control. Most people are doing just fine. Then it hit me--since when is making people forget about their problems and make them spend money a bad thing?
The question is are we doing a good enough job of enticing, seducing, and luring in our customers to our stores? NO! I believe the average retailer doesn’t even think about it enough. Are we creating a wonderful feel good fantasy for our customers? Shopping is escapism. It's the great deflector of problems, and it refocuses our mind from the humdrum of the day.
It all comes down to how we are making our customers feel. Feel about ourselves and their experiences with us. We don’t use the word need because needs are the basics that are usually discounted heavily. We sell wants. Wants are the exciting merchandise. The merchandise with some extra margin. Remember logic makes us think but emotions make us buy. Let’s key into the emotional part of our store.
Start with this question: How can I make a memorable experience for everyone and make an emotional attachment to the store? What are you doing and how are you doing it?
Let’s share our thoughts with all that are reading this column and I will report my findings with my own secrets to share. Write in and let’s make a difference by sharing with us all.
Keep those cards and emails coming.