"Listening" to Customers? How to Really Hear Them!

Who knows the most about your customers? Their whims, their likes and dislikes? 

Your front line sales staff!  Even in this environment of social media, online reviews, and pleas to "like us on Facebook", it's the front line staff who are listening to – and actually hearing! – the customers.

Day in and day out. In every retail operation, they are the first ones to know of problems, and, even better, to recognize opportunities.

Now, think for a moment about any large retailer. 

• How many layers of management do you suppose are between their front line sales staff, and senior management at headquarters?
• Contrast that with your own operation. How few layers are there between your front line sales people, and you as the owner or manager?

Therein lies your true competitive edge! But – it must be cultivated!
For example: The sales staff at one specialty boutique recognized that customers ask for products by color, not by brand. So, after much discussion among themselves, they went against the prevailing policy, and reorganized the displays by color.

They then anxiously followed the daily sales to see whether it really was a good idea.

That's the test: did it increase sales?
In that case, the front line staff took the lead, albeit with some trepidation. 

But, the owner wisely recognized the value of encouraging their involvement – after all, they were looking for ways to increase sales – and moved to formalize the approach in all of his stores. Everybody wins - especially the customers! 

• Ask your front line staff for their input. Create an environment that routinely encourages them to pay attention, and welcomes their feedback.
• Give your front line staff the authority to use their insights, and test changes and improvements.
• Demonstrate a willingness to experiment, as long as there is accountability!
• Agree from the start, "How will we know whether it is working?"

And yes, keep monitoring the comments on social media. You might see a nice uptick there as well.

Size Does Matter. Advantage: "Small Retailer"

Consider this assortment of seemingly random events:

• Stephen Marche, former college professor turned novelist, wrote a great commentary for Esquire  on "How to Quit Amazon and Shop in an Actual Bookstore."   An actual bookstore, he contends, is a place of discovery: "The book in the bookstore that you actually want is the one you don't know exists. Somewhere in there is something that's entirely fresh to you, and will reward your soul by exposure."
• An owner of  four specialty stores laughingly described the Millennial Generation shoppers in her stores: "So, they stand in front of the display, checking online reviews on their phone, and ask, 'How come you only have three different brands to choose from?' When I explain that we have already evaluated all those other brands, and selected the ones that are the best, they look baffled. They don't know what a store is! That's what we do; we edit the selections!"
• Wal-Mart announced that quarterly results overall were flat. However, sales at their small-format Neighborhood Markets grew nearly 6%. 
• Meanwhile, Nordstrom announced that its online sales for the quarter grew 22%, while sales at its flagship and mall-based stores declined 1.2%
• Amazon's announcement of its Local Register mobile credit card reading device - competing with Square and PayPal - emphasizes the availability of its 24/7 customer support via phone and email. 

Here are some of the patterns that we take from these events:

1. Yes, customers continue to behave very differently than ever before. Even as the economy continues a slow-growth recovery, we will not be "getting back to normal." And that means customers will not use bricks-n-mortar stores the same as before.
2. Knowledgeable, accessible, and personalized customer service is increasingly a strong competitive edge.

But, most important, we believe this shows that today's customers are hungry for exactly what specialty retailers can provide.

• Edited selections (the Millennials would call that "curated"). But they must have the rationale for those selections well-explained.
• Knowledgeable customer service and product know-how. (YouTube cannot explain everything!)
• Responsiveness, especially when an incoming phone call is answered by a real person!
• Human scale. Smaller formats with personal service are in.
• "Multi-channel" - You know, both online and real life stores that are coordinated, and let the shopper shop as they choose. 

Size DOES Matter

As an independent retailer, you already have an important competitive edge. And if improvements are needed, you still have the advantage: much easier to make changes with fewer stores. 

So, size DOES matter. Advantage: the "small retailer." As Anita Roddick, Founder of the Body Shop, so famously observed:

"If you think that being small means you can't have an impact, try going to bed with a mosquito!"

The Competitive Edge of Specialty Retailing

What makes "specialty retailers" special? 

The special shopping experience they deliver.

It doesn't matter what a retailer is selling – tires, hardware, electronics, books, apparel. Or, how big or small they are; Nordstrom, after all, is a specialty store!  

A specialty retailer's distinctive competitive edge is the special value they add to the shopping experience. 

See above for some quick examples of the difference between just "customer service" – which, increasingly, is customer self-service – and the specialty store retail experience. 

Are You Growing Jobs...for Your Customers?

The "Job" of the Customer Just Keeps Growing

Think about some of the programs  becoming more commonplace in retailing, either for their promised cost or time-savings:

• More "self-service" (e.g., less staff on the selling floor)
• Self check-out by the customer
• Online searches by the customer for product information
• Price lookup kiosks in the store
• Online shopping   

Hmm.  Time savings – for who? Generally, not for the customer. They are being asked to take on more and more of the work.

This is happening in many retail settings, whether the shopper is buying coffee or blouses or tires. It requires the customer to use their own time and effort. And their smart phone! 
"Attention Shoppers: Bring your own cash register."  

Focus Now on the Transaction

Many of these technology “advances” are focused on the transaction. And as they become more commonplace, sure enough, it seems to us that the pendulum might be starting to swing back. 

Consider these two news items from early June:

• “Legendary Los Angeles retailer Fred Segal is going global. They envision a ‘major reinvention’ of the luxury shopping experience, under the Fred Segal brand. which will combine fashion with dining, entertainment, cultural events and health and wellness programs.”
• “Target names a new senior vice-president of media and guest engagement. Target continues to accelerate our efforts to innovate and evolve, and connect with Target’s guests in new and different ways.”

Showcasing Your Competitive Edge

But, here's the deal. “Customer engagement” is already alive and well in most specialty stores. It's what makes you "special". It does not need to be re-invented. However – it may need to be exploited! 

Especially in today's technology-driven environment, the customer engagement and shopping experience you already deliver differentiates your stores. It puts the "special" in specialty retailing. 

So, since you've got it, flaunt it! Dust it off a bit, spruce it up, bring it front and center, and shine a light on it!

And since it is difficult for many prominent retailers to match that (in fact, some are just getting started thinking about it), for you it can be a great competitive edge. 

Lost Your "Competitive Edge"? Then, It's Time to Get Out of Retailing!

For retailers worldwide, January is a month of reflection. Cold, hard-nosed reflection. 

• "As I consider restocking, and go through the process of assessing 2012, I keep wondering, 'WHY am I doing this?!'"

• "Sure, I love my merchandise and the customers who love this merchandise. But, my results just are not good."

• "My staff and others are telling me that some of our best customers are going to a competitor. Hmmm...." 

Do some of these thoughts and concerns sound (all-too) painfully familiar?

If so, The Retail Owners Institute would suggest that all of these concerns reflect the same missing ingredient: you have lost your Competitive Edge. 

The solution? Re-discover and establish a distinctive and compelling Competitive Edge! Fast!!

Ask yourself, "What do we offer that separates us from all our competitors?" 

• Absolutely the lowest prices?

• Absolutely the broadest inventory assortment?

• Absolutely the very best location?

• Absolutely the wanted lines that no one else has?

• Absolutely the best e-commerce operation in your market?

• Absolutely the services for customers that are unique and special?

• Absolutely the most efficient and frugal operation around?

• Absolutely the biggest outlet for your merchandise anywhere? 

And of course, "absolutely" means without question, obvious to everyone. That is the only way any of these strategies represents a true Competitive Edge.

What if you do NOT have a true Competitive Edge? 

Then, absolutely, you should consider cutting your losses and closing down!

Kidding yourself that you are okay regarding a Competitive Edge is one of the tell-tale signs of a retailer in decline.

Reflection time is over. 

It's time to commit. Act now! Reclaim your Competitive Edge!

Who's Job Is Growing? The CUSTOMER's Job!

Think about cost-savings programs in stores - e.g., less staff on the selling floor and more "self-service". Self check-out by the customer. Online searches by the customer for product information. Online shopping.  

Don't each of these actually shift the work to the customer? 

The "job" of being the customer just keeps growing. (In fact, some grocery stores are starting to experiment with programs "allowing" the customer to scan the merchandise, place it into their shopping bag in their grocery cart, and then automatically ring up the total charge and pay via debit card - all using the customer's time, effort, and smart phone! "Attention Shoppers: Bring your own cash register.")  

Where is the "value" for the customer in all this?  

Reflect for a moment on the definition of "value".  Value: Benefits received, for the burdens endured.  

Certainly, many of the shopping burdens have been shifted to the customer, especially with the onslaught of new technology. But, what benefit does your customer receive for the increased "burdens" they now endure?

Some enjoy cost savings. Others like the increased sense of control. Still others may relish the time savings, or at least not having to wait for service.  But of course, not every customer has the same concept of a "burden".  

Want to deliver more "value" to your customers?  Start by understanding what your best customers consider the burdens of shopping with you.  Then, as a competitive edge, unburden them the best way you can! 

The Internet for Retailers: "The Arab Spring of the Commercial World"

There's a major sea change affecting retailing right now, whether we're ready for it or not.

Sea changes have hit retailing in the past, of course.

• Department stores once ruled retailing. Ah, but they didn't die. Instead, they went horizontal. They became known as Wal-Mart, Costco, Target, etc.
• Then "big box" stores, like Circuit City, Borders, Toys R Us, etcetera, stole the thunder from malls.
• In fact, there was a time when malls essentially had no vacancies. Now, they are being "re-purposed". Retirement homes, anyone? Charter schools?

But the current upheaval affecting retailing may be the most game-changing of all: the Internet. It continues to dramatically change the retail industry, at an increasingly fast pace. It's the Arab Spring of the commercial world! 

All those things that specialty retailers prided themselves on delivering in-store, in-person, are now available on-demand, 24/7 to the shopper via their smartphones.

No matter which consumer segment you target, they are increasingly web-reliant. They depend on the web to give them product information, shopping recommendations, price comparisons, store reviews, and more.

For hints of the future, watch the Millennial Generation. Yes, the "Digital Natives". The ones we know only from the tops of their heads, as they are busily texting.

That group now is larger and more influential than the storied Baby Boom generation that drove so many adjustments during the last 50 years. Watch every shopping decision they make: how, where, when and what they shop.

But don't stop there. All other consumer segments are being affected by the sea change as well. Grandmas buying off tablets? Baby Boomers checking prices from INSIDE a store on their smart phone?!

In fact, the fastest growing group of Facebook users is now the over-50 age group. So much so, that the teenagers are deciding to move away from Facebook. Where will they land?

So, which will it be for you?
There are three kinds of retailers:

1. Those who make things happen.
2. Those who watch things happen.
3. And those who say, "Uhh, what happened?!?"

Don't let the internet - the Arab Spring of the commercial world - turn you into retailer type #3.

Flexibility Is Prized, Especially by Hourly Workers. Make It Your Competitive Edge.

Retailers have the opportunity to make "permanent part-time" positions even more advantageous to the stores and the employee. It could become your competitive edge for attracting and keeping the best employees. Here's why.

Even in this tough economic situation, there are people who want only part-time, hourly work. This includes parents of school-age children (who are not the sole breadwinners, but the "supplementers") and university and college students (of all ages).

However, these people may need flexibility (e.g., last minute changes) in their schedule. If you can provide that time-shifting flexibility, they often become the most loyal employees, according to Working Mother magazine.

Retailers are well-positioned to attract and retain these potential loyal workers. But it might require some revamping of the usual-way-of-doing-things.

Remember, your staff who are on salary can come in early and/or stay late to compensate for a parent/teacher conference or taking an aging parent to the doctor. For an hourly employee to have this flexibility, they typically must trade hours with colleagues. That makes it the employees' problem, and, adds another layer of complexity to the solution. Plus, employees may feel it is "inappropriate" to have repeated requests for changes.

That culture has to change. And fast! It starts with R-E-S-P-E-C-T for the real-life demands of all your employees, not just those on salaries.

How to make the scheduling work for all your workers and for your customers? Start first by asking your hourly staff. They will have some very practical insights.

Then, with their good input, your good intentions, and today's scheduling software, keep experimenting with different approaches until you get the one that serves you best.

Flexibility in scheduling - and respect from the employer - is prized by hourly employees. What the retailer gains in return can be tremendous loyalty. (And yes, breaking the attract-hire-train-repeat cycle can save costs.) What a competitive edge for your stores going forward.