A Key to Retail Survival is Learning From Others Mistakes
Are You Investing in Differentiating Your Business through Customer Service and Building Loyalty?
The headline in a Motley Fool article said it all “The big-box graveyard is expanding.” Thus far, 2011 has been tough for many of the country’s most prestigious retail brands. Sears has announced the closure of over 120 locations (and more are sure to come), Best Buy has gotten hammered in the press for poor earnings and an even worse customer experience, and Barnes and Noble is rapidly losing its base of customers because it has been unable to adapt to the world of digital media.
When the leaders of these companies speak to the press, one of the first things you hear is them complaining about how Amazon and other on-line retailers are undercutting them and stealing their customers. And while the on-line retailers are growing at extraordinary rates, my view is that this is largely the symptom and not the underlying cause for much of their woes. The truth is that these and many other retailers are making it easy for customers to shop online because of two fundamental mistakes.
1.) They became complacent and took their customers for granted
2.) They began thinking like finance companies versus retailers
Hindsight gives us the benefit of having 20/20 vision, and it also allows us to learn from the mistakes of others, so let’s look at these core issues in more detail.
All three of these retail giants have been suffering from the malaise that occurs as a result of being one of the top dogs in their respective channels. While they may pay lip service to providing great retail customer care it is easy to find where they have made significant mistakes. It may seem like restocking fees, limiting the availability of web specials in the store, and bag searches make sense from a financial perspective, they are highly offensive to customers. And while it may seem like you can cut staff because your retail associates are not engaged with customers every minute, the fact is that it results in underserving customers when the store gets busy. The same goes for reducing spending on retail sales training and product training programs. The bottom-line is that when you cut back on the things that make your store special to your customers you are encouraging customers to try out a competitor – whether it be on-line or down the street.
The Solution to Remaining a Healthy Retailer…Invest in Your People, Invest in Your Customer, and Adapt!
While the retailers mentioned above are examples of how to do it wrong, there are plenty of examples of retailers that truly understand what it takes to succeed. Whether it is the Container Store, Apple, Whole Foods, REI, or a local independent. Most successful retailers have a few things in common:
1.) They always remember it is about the Customer first
2.) They invest in their retail representatives through quality compensation and retail training programs
3.) They adapt and change their practices to meet their competition
4.) They do not make excuses.
The people who run Sears, Best Buy, and Barnes and Noble are smart folks and I earnestly hope that they are able to turn their fortunes around, but in the meanwhile the rest of the retail community can learn from their errors and take action to avoid them!
– David Goodwin is the Principal of the Retail Advocacy Group. As a 30 year veteran of the retail industry he has hired, trained, and performance managed thousands of retail sales representatives and retail managers. You can learn more about instructor-led, e-learning, and other training solutions for retailers at www.retailertrainingservices.com.