'Now' is the new 'normal'

I get to speak to a lot of retailers during the course of my day job.

Many of them are struggling to keep their heads above water and most of them think they know why;

'It would all be different if the government taxed e-commerce'
'The economy will pick up after the election'
'It's been a warm winter'
'Everything will go back to normal when the football season finishes'

These reasons all have one thing in common - they all assume that the present trading conditions are abnormal and that the sector will somehow return to 'normal' when this or that thing happens.

Last week I met a retailer who offered a more realistic assessment of the retail industry;

'Now is the new normal'

Experience design

The retail industry loves phrases and buzz words - they keep a lot of consultants and analysts in business.

'Experience design' is one of my favourites - it sounds exciting and usually leads to multi or omni-channel strategies that cost a lot of money.

The best in-store experience you can provide for your customers is.......customer service, delivered by an engaged and knowledgable sales person.

Two ways to increase profitability

After twenty five years in the industry, I'd like to think I know a thing or two about retail.

For example, I know that there are only two ways to increase profitability - increase sales or decrease costs (read 'cut wages/staff')

Some CEOs understand that doing the former means that they don't have to even think about the latter however many CEOs only know how to do the latter (which makes the former even harder)

The customer service paradox

Ask most retailers and they will tell you that their customer service is exceptional.

But ask any customer and they will tell you that customer service levels in B&M stores is dreadful.

The fact of the matter is that they are both right.

Some stores provide outstanding customer service and some don't.

The challenge for B&M is that when customers are asked about customer service, they think of the whole retail sector and not specific shops.

The service that your neighbours provide is associated (in the customer's mind) with yours.

We have all received bad customer service but most of us do nothing about it - perhaps it's time to start demanding better - your own business might depend on it.

Price vs Value

Price is a public matter — a negotiation between supply and demand. A thing’s price is set in competition. So the price of a car is determined by how much some people want it, how much they are willing to pay, and how ready the manufacturer is to sell. It’s a public activity: lots of people are involved in the process, but your voice is almost never important in setting the price.

Value, on the other hand, is a personal, ethical and aesthetic judgment — assigned finally by individuals, and founded on their perceptiveness, wisdom and character.

The Rush to Click and Collect

 

 

Click and Collect

The big retailers and particularly FMCG are falling over themselves to provide a

click and collect service for their customers but I wonder if it's not counterproductive.
 

Supermarkets spend millions of dollars on

advertising each year with the goal of getting more people into their stores.

So why are they now spending even more to stop them coming in?

This practice has been around for a while, when I first heard about it I thought; "why would customers use this?" and the answer is that they hate shopping for groceries which led to my second thought "how have we managed to make grocery shopping such a source of dread?" 


It's hard to see how this encourages "shopping"

Proponents of click and collect, the type that the supermarkets are implementing where a customer buys from their online store and collects in their physical store, claim that customers spend more when they use the click and collect service. They would have you believe that a customer buys online to avoid going grocery shopping and then the same customer goes....er....shopping .....when they come in to collect their goods.
 
Is it just me or does that sound unlikely?

Let's get this straight, when you get the customer to enter your store - they spend more. They buy stuff they don't need and they buy more of it.
So instead of spending money to make it easier for them to stay away, how about investing that money in making their in-store experience better?

The CFO will argue that the millions spent on click and collect is a better investment than hundreds of millions on store refurbishment but I'm not suggesting that the Supermarkets need to refurbish.

I am suggesting that perhaps the money could be better spent on the little things that mean a lot like training staff to smile and engage their customers - it's not much but it's a start and even one (measly) million dollars would buy a lot of smiles.

The rush to implement click and collect is symptomatic of a much bigger problem. Decision makers have been convinced that technology is the answer to all their problems and in some cases it will be but I can't see how click and collect will do anything other than erode basket size and value.

What's your Point of Difference?

"Love" is looking a bit tired.

Your shop's point of difference could and should be a lot of things.

It should be range and service and pricing and even just the ambience of your shop.
 
I'll write more about service, pricing and ambience in future posts but for now I want to talk about range.
 
Do you offer a better range of products than your competitors?
(Note that I used the word "better" not "bigger")

Is your range different and quirky and surprising?

Are you constantly reinventing your product offer?

I would suggest that if you aren't you will continue to lose shoppers to online retailers.
 
Twelve years ago, I worked near a highstreet which was known for its gift shops, there were five of them but they were all different and all successful.
 
There was a shop which sold cheap and cheery crap aimed at teenagers, another which was exclusively Japanese home wares another which did the whole lavender potpourri and white crackle lure, French Provincial look and another which stocked high end and minimalist type gifts.
 
Twelve years later and most of them are gone; the ones that are left are struggling to survive.
 
It would be easy to pin the blame on the Internet, after all, none of them stocked anything that wasn't readily available online but I don't think that was the problem.
 
Their success brought competitors, new shops buying the same stuff from the same suppliers at the same gift fairs and putting it out cheaper.
 
The shop with the Provincial French theme is still there but they won't be for much longer.
 
Twelve years ago they stocked, leather ottomans, cast iron Eifel tower bookends, magnifiers and key rings, picture frames and those awful wooden words like "love" and "joy" that people put on their mantelpiece and use to collect dust.
 
Today, they still stock all the same things - nothing has changed except that twelve years ago all of those products were new and interesting but now they can be found in two dollar shops.
 
The owner shrugs and says that she can only buy what the wholesalers bring into the country.
 
I say find new suppliers......
 
We live in the 21st century and right now the human race is more creative than at any other point in history, not only are we more creative but we are also more connected than ever before.
 
All around the world, there are people making things in their garages and back rooms and on their computers and posting them for sale online.
 
For a giftware shop there are sites like Etsy which specialise in handmade items like Jewellery and, in fact, just about anything else you can think of and then there are sites like Zazzle and Cafepress who are "on demand" printers - their sites feature literally millions of unique products in thousands of different categories.  

Napoleon’s Bee Aprons from Retrofit the Future

Take the apron on the left for example - perfect for a gift shop that is known for that French provincial look.

The design is available on 35 products ranging from Jewellery boxes to t-shirts, greeting cards to kitchen towels and dartboards and most of the products come in different colours.

A single apron costs $38.45 (USD) which might seem expensive but you have to remember that these are online stores, not wholesalers and this site offers a sliding scale of generous discount for bulk orders starting at 10% off for 11 units and they don't mind if you order different designs and products to get your the discount.
 
It's new, it's interesting and it can be exclusive to your shop which means your competitor down the road doesn't have them and can't force the price down in a sale.
 
And the best bit, you can bet that there are fewer than a hundred of them anywhere in the world.

Push vs. Pull

 

If you are a B&M retailer, this ad should make you angry.
 
The Iconic is a pretty slick online retailer.
They sell the same stuff that B&M fashion stores are selling but at marginally lower prices due to their lower overheads but that's not why this should make you angry.
 
You should feel angry because in a 30 second TV ad they've managed to nail some of the reasons why customers are increasingly shopping online.
 
Most commentators believe that people are being attracted to shopping online because of "pull" factors and the most commonly cited "pull" factor is cheaper prices
That type of thinking says more about the commentator - It is a shortsighted and lazy view of retail where price is the only thing that matters to shoppers.
It is also a ready made excuse for poor performance - "it's not my fault - the Internet stole our customers!"
 
No. I believe, just like the people behind the Iconic do, that customers are being "pushed" and "pulled" online.
 
Watch the ad again.
 
The "push" factors away from B&M stores are;
 
"Lack of parking"
"Poor service"
"Crowded shops"
 
...and once they've finished pointing out what's wrong with B&M stores they move on to the "pull" factors;
 
"100's of "amazeballs" brands
"24/7 access"
"Free delivery"
 
Notice anything unusual?
At no point do they mention price.