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Rick Segel, CSP

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The Lessons from Black Friday

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Bring on the Lies and Exaggerations

It is Sunday night after the much hyped After Thanksgiving Day Sales. Some stores opened at 4:00 AM. What genius came up with that one?  I figured that I could have all my Christmas shopping done before other stores opened at 10:00 AM. Did anyone notice that although more stores were involved in these earlier openings, the specials or door busters were good but not the WOW WOW (that’s a double WOW) that I would have expected to motivate me to get out of bed at 3:30 AM?

Along with the 4:00 AM openings, there was something else that was different. More and more stores were listing their “Door Buster” specials online. The thing that got me was that you could actually order the same items online. So why even bother going out shopping? BUT people did. WHY?

When answering that question we will be answering the key to the future of brick and mortar retailing. Black Friday became an event, a happening that people wanted to be apart of. It was the thrill of the hunt. It was a contest, a reality show, and people want to say they were involved–just like the person who pays a premium for seats at a World Series or Super Bowl game. Your seats are twelve miles away and you are watching the game on the Jumbotron monitor but who cares? You were there.

We have to make our stores exciting, event driven, and the place to be if we are going to keep customers walking through the front doors.

There is another issue to consider. This is also the time of lies, exaggerations, and depression. Let’s first address the depression. Over the next few days, you are going to hear reports on how terrific business was. How busy the stores were. How stores didn’t expect to do the business they did. I have already have read reports that sales were up 8.3% for the weekend by ShopperTrak and it was only expected to have a 4% increase. How many times have we heard over the last 7 days that the day after Thanksgiving aka Black Friday is the busiest shopping day of the year? It’s not; it’s a lie. But it’s good for business.

All the stores that come out and tell us that business was terrific might not be telling the truth. Do you think anyone will admit that opening at 4:00 AM was a bad idea? Never. But we will hear things like “It was the first year we ever did it and we did so much more than we ever expected.” How much did they expect and was that the truth?

Is that bad? Well, if a retail executive ever came out and said his sales were terrible because he had the wrong merchandise and his sales clerks treated people like crap, that executive would be fired before Hanukkah, which comes before Christmas. Why? Simple, no one wants to shop in a LOSING STORE. We want to be with the winners, NOT the whiners.

Why Depression? Simple, we get depressed because we look at what we did over the weekend and say, “What’s wrong with my store? Why can’t I have increases like that?”

There is nothing wrong with your store. Take many of these reports with a grain of skepticism. All that glitters is not gold.  How much did it cost these stores for the extra advertising to tell people they were open at 4:00 AM? How much extra help did they have to pay for? How much did those extra 2, 3, or 4 hours of sales impact the bottom line? Did they just stretch the business? Consider this: if a store is open an extra 2 hours from their normal 14 hour day, that means the store is open 14% more. You tell me what percentage extra a store should do.

On one hand, I am saying dare to be different, and on the other hand I’m saying is it all worth it? Yes, it is worth it. Some ideas will work, others won’t, but we keep on trying to push the envelope to improve our businesses and keep people talking about us. All I am observing is the “Spin” that some retailers put on different events.

Last week I was taken to task by a loyal reader who was surprised that I agreed with a reader that recommended telling a little white lie about a dress size to create a win/ win scenario about ordering a wedding dress. My feelings were that a little white lie made the customer feel better about herself and it was good for business, just as many retailers did and will do in relationship to hyping holiday sales. However, is a lie always bad? Is lying ever OK? If so, when is it? When a retailer buys out an entire inventory of a manufacturer’s sweaters, puts them away for next year, and then features them a year later as HOT NEW ARRIVALS– isn’t that stretching the truth a little or is it just good business?

I don’t think there is a definitive answer here and probably a topic that will go on forever but it is an interesting thing to consider during this period of retail hype, embellishment, and exaggeration. Actually, some of the greatest retailers are described with those very adjectives. If you are so inclined, share your comments. If I get enough interest I will continue with the discussion. Have a great week!

The Responses to ‘What’s a Retailer to Do?’

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A Case Study on Handling the Impossible Customer You blew me away again with the amount of responses. It has become apparent that people love this case study format. Everytime I go out to speak, there is always someone who is mentioning one of the case studies. For those people who didn’t read last week’s case study, you can go to www.ricksegel.com/blog to read the case study in full.

A quick recap: A bridal shop ordered a dress for a bride. Her family had been good customers of the shop but this bride insisted that the store order the dress two sizes smaller because she knew that she was going to lose weight. The store objected to no avail and ordered the smaller size. Of course it didn’t fit because the bride gained weight rather than lost weight. The store spent time and money trying to alter the dress for her. Then the bride decided she didn’t want it. What should the retailer do?

Here are the results:

  • Tell the customer that all complaints have to be in writing and you will review them and respond. (This was one of the suggestions from the store owner.)
    3%
  • Give the customer all of the money back, take the loss, and move on.
    8%
  • Bill the customer for the alterations and the balance owed on the dress. The store did everything right.
    19%
  • Give the customer a store credit for what she paid to use on future purchases and keep the dress.
    35%
  • Other ideas?
    35%

Your responses were terrific, so let me share them. I am including as many as I can, which means this article will be very long but I thought you might enjoy reading the responses. There are a few of you who would have done exactly what I would have done. These answers are at the end. It is an unorthodox solution that works. Enjoy.

Business is business, friends or not. If she signed a contract then she knows she was tied to the purchase. I would bill her for it. She wanted the smaller dress, she got what she asked for.

Bill the customer a nominal amount for the alterations and give her a store credit for the balance of what she has paid to date. The customer MUST accept responsibility for some of the costs incurred.I would also tell the bride that I would try to sell the dress in its current state and if I could sell it I would refund her money. She would then only be paying for alterations

I cannot help but think that we could turn this into a win-win situation. Maybe, as I have done on Ebay sales, a partial refund, and then in this case, a partial store credit. Then, maybe a “dent and scratched” kind of sale. I would imagine that you may have another odd dress, or some other merchandise that you could sell at a deep discount and at least make back some of your money and clear out the back room as well. Good Luck with this, you are between a rock and a hard place!

The best choice, given that the owner seems to value a long term relationship with the family, is refund the money cheerfully and ask how to help with the wedding. Charge the loss to your marketing account, and make sure everyone in the world knows the kind of service you provide at a time when people need *service* more than usual.

One may bring this situation to a no loss no gain state. bill the customer only for the costs involved and be very clear about it. leave the profits. also promise the customer to give good discounts on next purchase. this would make the customer happy. if i were you, i would buy the bride a small gift on behalf of the store (put it in the advertising budget).
- ila rawat (lecturer in retail- india)

This customer is unhappy even though she is clearly in the wrong and signed a contract. Tell her you understand her position and that – exceptionally – you will do her a favour and you are willing to let her off her signed contract if she pays you an acceptable sum (you decide)within 7 days.

Tough!! Customers aren’t always right and I’m tired of people thinking so! It may be difficult, but if I was the store owner that customer would be paying up.

Solution A is an insult to the customer. Make an appointment for her and perhaps some of her family come in and review the whole sales process with her. Perhaps then they will realize they were committed to the order. They might then pony up to their obligation or you might soften them enough to make a compromise and settle for half.

Rick, Dollars to donuts this girl is “gone” anyway. She and her family will, most likely, never be back. I would, however, definitely speak with the parents to explain the details of the special order. We have a small sign that notifies clients that all “special orders” are non-returnable, non-refundable, but have a very liberal exchange, refund policy on “in-stock” items that we haven’t altered (Retail Jewelry). You can’t special order a Mercedes, have the dealer give it a special paint job, then say that you’re not happy with the color–and expect to get your money back. This one is a lost cause–he’s working with a bride on the way to the altar, and that’s (typically) not a rational person (pearls of wisdom from my 25 year old son who is getting married next June).

If there was a deposit, I would keep the deposit, bill them for the alterations, keep the dress, putting it back on the rack at a discounted price. You would at least recover the cost of altering and most of the dress. SAS

Call a meeting of the whole family. Explain what a difficult situation they have placed you in, and that they have been customers for a long time. Then explain that how against your professional opinion as a person who has been in the industry for xx years, they went against your judgement. That is why you have crossed the t’s and dotted the i’s. Explain that leggally you have taken card of them and done what they wanted done as customers. Then ask how they would want to be treated in this situation, where they would be put in a spot that would lose them money with long time loyal customers, that now are threatening to not be loyal due to their unwillingness to listen to your suggestions. (lay it on thick, we call it the Catholic guilt) See what they come up with. I would then maybe give them the credit on the dress itself, but definately not on the labor for the dress making. I would take a long time to explain why and try to relate it to their professional fields so that they might relate better.

Because there was a contract in place and the store owner had advised the customer not to order the dress in the “too small” size, the owner needs to stand by the contract. They could forgo their profit as a consideration to the relationship with the family… Don’t eat it!!!

All sales on special order merchandise in the bridal industry should be FINAL! There might have been some room for discussion before alterations began, but now there is nothing to do but tell her it’s her dress.

Tell her that is the way she ordered it and stand your ground. If they were really good customers with family ties to the business they would not be putting you through this misery. They will never be customers no matter what you do and you won’t want them for customers in the future. Keep the money and use your energy to take care of customers that appreciate your efforts.The merchant is definitely up against the wall and any choice she makes will not be a win win decision. This is where she needs to take a stand on principle and that the customer is not always right. This is where human decency should prevail. She needs to let her customer know in writing (itemized) what her cost was for all she went thru for nothing and deduct it from her deposit (if she received one in the first place). Now if no deposit was received the merchant might as well down play the whole thing, forget about the bill and even send a wedding card. If she selects any other action she will be tarnished even more and still most likely won’t get any money for her efforts. Good Luck MB

Is only the bride involved, or is the mother a key player? With whom exactly does the store have a prior relationship, and who is doing the complaining now? Can you try to sit down and review the situation with the person paying the bill? Leave the size issue out of it (too touchy), and just deal with the fact that a special order is a commitment (which I assume the paperwork says). I’m also curious as to why the shop owner didn’t just go ahead and order a larger size for the bride, since taking a dress in can always be done and letting one out has its limits. If this doesn’t work, then revert to stick to the contract, but invite them to put it in writing if they still feel wronged.

This raises some questions before I can answer. 1. Define good customer, 65% of loyal customers will go to another retailer just to try them. 2. Who is the professional here? They knew it would never fit her. A lumber yard can not make a 4 x 8 plywood fit a 4 x 9 hole. 3. The dress that was order to be 2 inches too small came in 3 inches too small. Is this a manufacturer error or did she eat to many big macs. They have to decide what their losses are and can they live with the result. I believe they should keep the money but they will have to eat the 8 hours of labor. I would put the dress on display showing how it is impossible to make a small dress bigger. The next bridezilla may think twice on how effective her miracle diet will be.Don’t bend under pressure unless they really could do damage — regardless of how good a customer, they probably won’t be ordering/buying anything else anyway in the future due to this bad experience (probably more because of embarrassment).

If the client disagrees and wants a full refund, I would question their integrity in not understanding that it was there fault in the first place and now they’re taking advantage of the situation where you may have to make the tough decision and fire the customer!

I find that most times, if I ask my customers “What do you think is fair”, they become reasonable. Bottom line … Bill for the alteration. Rebate the difference. Thank the customer. Period.

I have a furniture/home decor store where customers special order furniture. I had a similar situation where a customer ordered a chair and 2 months later decided the chair was uncomfortable and wanted to return it. I took the chair back but explained it was company policy to charge a 30% restocking charge on custom orders and that I would be able to give her a store credit for the balance. She was actually very understanding and accepted the decision. p.s. I took the chair back and issued the store credit – about 3 weeks later she came in the store and one the my sales people worked with her a bit and she ended up taking the chair back home. In the bridal shop situation – offer her a refund less a restocking charge and balance on a store credit.

THEY BROUGHT A DRESS AT ANOTHER STORE SO THEY AREN’T THAT LOYAL AFTER ALL

This happens to us practically every week. I guess brides in Louisville think they may lose more weight than in other parts of the country! I would tell her that she insisted on getting the size that came in (we always try to make notes when a bride makes request based on a diet, surgery, stress, etc) She would have to keep the dress, but I would send her to one of the best seamstresses we have (we give names of people we think do a good job- they are not related to the store) and tell her I would work with her on the price

We have a corporate uniform business with similar issues. We embroider logos so the garment is unsaleable to anyone else. You have to go to perfect honesty. The ordered dress belongs to the customer. You rebill the dress at your invoice cost excluding the dressmaking time cost & credit the extra (your profit margin) toward the replacement the customer buys from you. You bill the customer your invoice cost for the replacement. If you have done your homework on pricing you should break even possibly less your labour cost for the mods which you wear as a business & insist on a positive testimonial from the customer as part of the deal. It gives you leaverage in case the customer goes to print in a negative way in the local paper because you can answer it with the testimonial

I used to work with a gentleman we’ll call Jerry. When working out a deal, a customer would ask, “What’s the best price you can give on this….?” Jerry would reply, “The best price for you or me?” He would then follow up with, “What do you think is fair?” This was great because it put the responsibility on the customer to be honest and it opened the door to compromise. They should invite the customer to come in and ask them what they think is fair. In the retail world we are an advocate for ourselves and the customer. Don’t place blame. The store may lose some money on the deal this time, but they don’t have to lose out on future business. Be positive and productive. Focus energy on finding a viable solution that is fair for both sides involved. Good Luck. -

Lesson to learn. if you knew the dress was to small to order in the first place it should never have been ordered. if you have family ties and they are customers , take it back and don’t every make this error again. business is hard and you have learned a great lesson you will sleep better tonight


The next three are almost identical but these readers have really figured out what to do. It might be considered a little white lie but it works and makes it a win/win situation.

*First though, the store owner is the expert in dress sizing. She should have ordered the dress in the correct size, removed any size tags when it came in and delivered it to the bride. Any questions about size and tags? The dress was ordered as requested-to fit her and tags, don’t you know, aren’t put in custom made dresses. (A dress has to be much easier to make smaller than to make it much larger.) Dishonest? Slightly, but a very happy and satisfied bride to be, walks out the door.

Next time order the dress 3 sizes up, remove the tags. If she truly loses the weight, you can decide whether to alter the dress for free, (if they figure it out) or discount the alteration. I’d say if you didn’t have a clear policy on alterations (dress must be paid in full before alterations are made/non-refundable deposit) Start one now- and have the bride to be sign off on it. I might even consider having a policy where if you suggest they not special order the smaller size, they’re still responsible for the cost of the dress. I think to avoid bad word of mouth (I have a special disdain for bridezillas, I find them contemptable with all of the other “real” issues in the world, anyhow) you are unforly stuck. Making the complaint come in writing will just tick them off further. Hopefully you can sell the altered dress- or make lemonade out of these lemons and donate the dress to an organization like this one: http://bridesagainstbreastcancer.org and send out a press release to the local news, and make sure you get a photo taken with THE dress . Or maybe even offer that dress for sale as a fundraiser for a local battered women’s shelter. Do a silent auction- and throw in the alterations again. Good Karma, good press.

Rick, My mother owned a bridal shop for 37 years, which I managed for four years after graduating from college. The bride is always “going to lose weight”! Yea right. This is ridiculous. The store owner should have ordered the dress in the size she knew the bride would need, cut out the size tag upon arrival, sew in a much smaller one and the dress would have worked. The customer could have said, “See I told you so” and the owner of the store and her employees could have gone for drinks after the first fitting and laughed all the way to the bank. This shop owner deserves to lose money on this deal. You can always make a dress smaller and women LOVE that. How great would that bride have felt if the size she thought she ordered needed to be taken in?

I couldn’t have said it better myself. By doing the right thing, the store ended up doing the wrong thing. This last solution works. BUT there is a paradox here. I am telling you to bend the rules. I am telling you to deceive a customer a bit. Yes, I am. Think of the alternatives. Make a bride feel fat, add stress to her life, create terrible word of mouth, and have a situation where everybody loses. No thanks.

Having said all of that, let’s accept the fact that not everyone is going to like us and we can’t please the world. Make reasonable policies that are competitive within your industry and stand by them.  If someone can’t live with them then they will go to other businesses. Oh well. You aren’t going to sell everybody even if your policies are different. Customers use intimidation tactics to get what they want from us. If this bride was that stupid to order a dress two sizes too small, then her family probably knows she has a couple of screws loose as well. I wouldn’t worry about the family.

Have a great week. Have a wonderful Thanksgiving Holiday. We celebrate ours on Saturday. I have three married children who celebrate with their spouses’ family on Thursday and we celebrate on Saturday. See, we break the rules a bit and it works out just fine.

What’s a Retailer to Do?

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A Case Study on Handling the Impossible Customer

I asked for different real life scenarios in last week’s newsletter to create a case study for all of us to comment and vote on. Well, I had a number of great ones submitted and selecting one became difficult. But some of them covered topics that I had handled recently so it made the selection process a bit easier.

The story selected is from a Bridal Shop owner who had a rather unusual situation that many of us can relate to. But before I share the story, which is the type of situation that makes us pull the hair out of our head, I have to share a thought that prompted me to use this story.

Last week I was judging the 10th Annual Retailers Association of Massachusetts Awards of Excellence and was listening to various nominated retailers talk about how the customer is always right. Many talk about how they never hassle a customer and give back money to the customer with no questions asked. That is a very noble thing to do but I wonder how these stores would handle a situation like this:

“I have a bride, whose family have been good customers of the store for years, insist on buying a gown two sizes too small since she was losing weight.  I tried to talk her out of it but my efforts were rebutted.  When she tried the gown on to order it, it was two inches too small. BUT after the dressed we order special for her came in and she tried it on for the first fitting, the gown was now three inches too small.   We were very positive and had our dressmakers let it out as much as possible. After all our effort, it was still too tight and she changed her mind and now she doesn’t like the gown after all. She has found another dress somewhere else and wants all of her money back. The dress is $1200 and I have about 8 hours of my dressmaker’s time on this dress. I don’t know what to do because of the family ties to the store. Legally, I have crossed all her t’s and dotted all the i’s with contracts and I don’t have time to argue what is obviously the customer’s fault.  Any ideas?”

She also said that she has decided she was going to tell her all complaints have to be in writing.

WOW.  This is a situation with limited upside potential and an unlimited downside source of aggravation and negative feelings. The question is what do you do when there is so much money involved? It’s OK when you have to cover a $5 or $10 item but this represents a major loss. Here are the choices the way I see it, but if you have another idea PLEASE check off OTHER and tell us how you feel.

  1. Tell the customer that all complaints have to be in writing and you will review them and respond. (This was one of the suggestions from the store owner.)
  2. Give the customer all of the money back, take the loss, and move on.
  3. Bill the customer for the alterations and the balance owed on the dress. The store did everything right.
  4. Give the customer a store credit for what she paid to use on future purchases and keep the dress.
  5. Other ideas?

The decision is now yours and I look forward to your responses and to sharing my thoughts as well. I want to write more but I will save it for next week. Have a great week!

Click here to vote!

What Can a Retailer Learn from the Red Sox?

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Anyone who knows me knows that I am a long time Red Sox fan. I always like to say when you are born in Boston, it’s marked on your birth certificate, RED SOX FAN.

Well, this week the Red Sox won the World Series for the second time in three years. There are a few things we can learn from this that I would call good business:

  1. My hat goes off to Dick’s Sporting Goods & Macy’s. Eight minutes after the Red Sox won the championship, I received an email from Dick’s offering World Series merchandise. Timing is everything and they planned it perfectly. Macy’s offered a Waterford Baseball 30 minutes later. I am sure they had planned this months ago but that’s just great marketing. When was the last time you anticipated an event like that? It can be an offering of merchandise or just a press release about something in the news. Think timing.
  2. Constantly reinvent yourself. I heard one of the sports analysts compliment the management of the Red Sox because they didn’t just stay with the players they had. There were only 6 players still on the team who had won 3 years ago. That is constant and never ending improvement. Could you be strong enough to make those decisions? How many times have we kept an employee too long because we didn’t have the heart or courage to let them go? I must admit I have. It’s not easy but the winners do make those tough decisions.
  3. The last lesson is what really motivated me to write about the Red Sox. I saw a cartoon that got to me. It was a picture of Darth Vader wearing a Yankee’s cap with the caption that said Evil Empire. The next picture had Darth Vader wearing a Red Sox hat. Again the caption said Evil Empire. The point is we love the underdogs. We love comeback kids and we dislike the arrogant, the overly confident, and the leaders. We can work hard to make it to the top but if we stop striving and looking for ways to constantly improve ourselves, we are destined to fall from our pedestals. We must stay both humble and hungry.

Don’t get caught reading your own press clippings. They only give you a fat head and no one wants to do business with people like that. Remember, you are never as bad as your worst defeat and you are never as good as your greatest victory.

If you are the biggest or best, prove it everyday. Don’t sit on your past successes but plan for your next one. Be approachable and remember to be nice to the people on the way up because you might just see them on the way down.

I am very lucky to have had my share of bad decisions because they made me appreciate the good decisions Thankfully, I have had more successes than failures but  I also have great kids and a wife who bring me back to reality. After I have a great speech or a standing ovation, my wife likes to say “take out the trash” to put things back into perspective.

As a business, we can never have a public image that is overly confident or the feeling that they could care less if they buy from them or not. No one wants to do business with people like that. Treat each customer as if they were your first one and you will never have that problem. But if you are on top, remember that people will just naturally resent you for that. Don’t give them anything to reinforce that feeling. In the movie “American Gangster”, the lead character, played by Denzel Washington, was a mob boss who stressed the low key understated image. It was the showing off that finally did him in. This is a lesson for all of us.

Have a great week. I want to do a case study next week so if anyone has a scenario you would like to discuss, just send them along and I will pick one. I look forward to your responses.

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