I found an interesting (PowerPoint) presentation about the retail strategy of US retailer Family Dollar. In it they note a few things about consumer behaviour in the current climate. You can download the presentation at retailsmartresults.)

Based on that analysis, and a few additional resources, I have compiled this little list for you.

1. Doing more things at home

This does not only refer to the ‘cocooning’ indentified by futurist Faith Popcorn, but rather about how consumers are spending their money. In a recent survey , the researchers found in particular that it is affecting dining habits.

 

2. Using more coupons and discounts

US-based stats, but at the same time, internet-based coupon sites are spreading their tentacles. For instance, see what Groupon is doing.

 

3. Want ‘green’ but don’t want to pay for it

Rather than quote research, let me ask this: When you booked your last flight (online), did you tick the box that allowed you to offset your carbon footprint? Click here to answer the quick poll (just the one question) and I will share the results with you next week.

 

4. Combining errands and shopping trips

Family Dollar research.


5.     “Trading down” to less expensive items (anti-consumption mindset)

Last month, the McKinsey Quarterly released a report about changing  consumer behavior.  Of the consumers that they surveyed, 18% traded down in their categories, and the majority of those who traded down did not find any difference between the lower-priced brands and the brands they had traditionally used.  Over 75% of consumers who traded down were going to stay there, very happily.

Just last week in Inside Retailing, a commentator said there has been a shift in the consumer's psychology of acquisition. "The wild days of abundance and status for status' sake are no longer relevant. Customers are more discerning in both their product choices and with whom they choose to have a relationship."

6.     Greater reliance on social networks and word-of-mouth for final decision making

Again, if you have not seen Dan Zarella’s presentation on the science of social media, you can download or watch here at retailsmartresults.)

The question is of course; if this is so, then how has that changed how you do business?

 

Have fun

Dennis

PS: Remember to answer the poll, AND there is a great blogpost about customer service that money can’t buy that you can also read…

 

What is the hardest thing for people to do? What is the hardest thing for you to do?

Have you ever watched IDOL – the TV talent quest (or any show like that)  wondered ‘why has no-one ever told them that they couldn’t sing’? But you see, people have told them that. They just failed to accept it.

Because ACCEPTANCE is the hardest thing to do.

It is hard to…

• accept who you are (and who you are not)
• accept that there are things that you don’t control
• accept that you are responsible for the things that are wrong in your life (and business)
• accept forgiveness
• accept that you may be wrong
• accept responsibility

I could go on, but you get my drift. How does this apply in life?

The prevalence of any number of addictions, from weight-loss to drug addiction, is proof that people failed the acceptance test:

• They failed to accept that they have a problem
• They failed to accept personal responsibility
• They failed to accept help

The high divorce rates are symptomatic of:

• failure to accept each other
• failure to accept change
• failure to accept responsibility
• failure to accept differences

You may argue that failure to accept the status quo is the stuff that great achievements and amazing innovations are made of. There is some truth to that. But let’s no confuse discipline and perseverance with denial of reality.

No matter how much you believe in ‘the secret’ or the ‘power of dreams’, I doubt anyone reading this can crack the 10-second barrier in the 100m sprint; so let’s learn to accept reality and move on.

But what has this to do with running a (retail) business?

When you run a business, you will receive a lot of advice; from customers, staff and consultants. As a consultant I get to see how people process ‘advice’ all the time – and what I see as the first reaction is how people get defensive.

No matter what the cold facts are, the first reaction is to justify why things are what they are. And why it became that way. And why it is too hard to change.

• When someone tells you that your service sucks, you should believe them instead of telling them why they are wrong and what they don’t understand about your business.
• When someone says you should invest in better systems, maybe you should buy one instead of finding reasons why the current one is good enough.
• When someone tells you that you are too expensive, you could find a way to lower prices or change perceptions rather than explaining that it is the supplier’s fault.
• When someone says you should change the way something looks, you could change it rather than justifying why it has always been done that way.

Does this mean that one should always accept advice in good faith? Of course not:

In the first instance, when someone gives you unsolicited advice about something personal and about what is possible and not possible – IGNORE it.

When someone gives you advice that is based on their experience of an interaction with you and your business – EVALUATE it and assess it on its merits. Be aware of the temptation to justify it and to rationalise it away. Make a level-headed decision about whether there is any merit in the advice and then act on it or discard as appropriate.

When a consultant or trainer gives you advice, IMPLEMENT it; because presumably you are not stupid enough to employ a consultant who has no expertise in that area.

Ask any alcoholic. Ask any divorcee. Ask any bankrupt: Acceptance is the first step of a change in direction.

As long as the first step isn’t a knee-jerk reaction.

Have fun

Dennis

(More like this by clicking on my name above.)

PS:  HERE IS SOME ADVICE

I found an e-Book on PRICING for the 21^st Century by Todd Satternsten that is just BRILLIANT. It is better than the one I wrote, but in defence, I tried to give you a step-by-step guide to the mechanics of retail pricing, which is not a sexy topic. But having BOTH side-by side will give you a perfect insight into the strategy, the philosophy and the tactical aspect of retail pricing.

You can get both (for free) in the FILE SHARING tab over at Retailsmartresults Group. Registration required if you have not done so yet.

Let us nail down the incontestable truths first; or at least those facts about customer service that I hold as true:

• Customer service is easy to understand.
• Customer service is hard to implement.
• Customer service is hardest to copy.
• Customer service is different for everybody.
• Customer service can make the difference between success and failure.

Why is customer service so hard?

A clue can be found when you compare it to the other dimensions of business which are (almost equally) hard to replicate. Think dynamic brand (like Apple) or innovation (3M).

These aspects are hard to replicate because the activities that are the building blocks of innovation, brand and great customer service are all rooted in organisational CULTURE. And companies who are successful at these aspects are successful usually because the founder or an early leader in the growth stage of the company laid down those foundations of the culture.

It is very hard, if not impossible (under normal circumstances) for an organisation to be changed because the power of a strongly embedded culture is almost always stronger than one individual leader.

The alternative to great customer service is great systems; rules and regulations and procedures that will govern the process of customer interaction.

It is the only alternative, but it is a very poor one. Because we all know that there are always exceptions to every rule because no system can withstand the everyday demands of customers.

So if the only alternative is an unacceptable alternative, what do we do?

The clue is in the bracketed phrase I used above – under normal circumstances. Cultures do change and can be changed, but what it needs is abnormal circumstances. Leaders who are adept at this talk about creating a ‘burning platform’ - an analogy of the type of situation you face when you are on an oil rig that has caught fire.

Hold that mental image for a moment.

If your organisation is going to change then it needs a dramatic set of circumstances to create the awareness and effect the change. If it doesn’t exist naturally, a great leader will fearlessly create one.

It may mean ripping up contracts, moving office, changing suppliers. It may mean clearing out the top management. Firing or promoting people in line with the (new) behaviours you want to establish.

I must be quite brutal here: talking about it won’t cut it, strategy sessions and vision statements and customer service charters won’t cut it.

Was the GFC wasn’t an ideal burning platform opportunity that we ignored? Instead of price-cutting that is more like blood-letting, what would have been the outcome of we simply got closer to our customers to the extent that we became indispensable?

A service-orientated culture (people who truly care) is the rare difference. This decade’s benchmark company is  Zappos - DOWNLOAD the PPT and/or google their story.

If your company was not founded on a culture of great service, then the only option is to become a fearless leader, because the alternative to customer service is simply not an alternative.

Have fun!

(And if you want to chat more about this, you know where to find me...)

Dennis

Did you know that a large chain store could easily have a trillion numbers to look at to help its decision-making? (More about that in next week’s post.) Suffice to say that picking the right number to focus on is important, and of course identifying interpreting the underlying problem is the most important.

One popular method of solving problems is ‘root cause analysis’. This is the science of getting to the root cause of problem.

I am going to generalise here, but I as far as generalisations go, I reckon this is a pretty good one: Most people confuse symptoms with problems.

How often have you heard people identify the following as problems?

·         Poor sales volume

·         Poor product quality

·         High levels of shrinkage

·         High staff turnover

I could go on, but you get the picture.

None of these are actually ‘problems’ if you apply the principles of root cause analysis. (For those familiar with my work, this is where the famous chocolate mud cake analogy comes in.)

The ‘problems’ listed above are actually ‘outputs’ - which are by definition the result of something else. This “something else” is probably the root cause of the problem, and these ‘problems’ are nothing but symptoms…

Discover the root cause of a problem by asking yourself ‘WHY’ until the answer you get is ‘because…’.

Do you have poor sales?

1.       Why? A: Insufficient customers…

2.       Why? A: They don’t know where we are…

3.       Why? A: We have never told them…

4.       Why? A: We don’t know how…

5.       Why? A: We haven’t learned how…

6.       Why? A: Because we just haven’t…

This approach reveals that the real reason for the lack of sales is that the organisation lacks marketing skills.

If the answer to the first question was different, then the decision path would look very different and the solution – that addresses the root problem – would be very different.

The funny thing is, when you are looking at organisations (as opposed to production lines), the root problems are very often lack of training. It stands to reason therefore that the single most important thing that you can do to solve the problems – and even prevent problems, is to have a well-trained workforce.

Let me illustrate from our business:

A prospective client was apprehensive about implementing a training program. His concern was that because his staff turnover is so high, it isn’t worth it.

All he had to do was ask himself ‘WHY’ his staff turnover was so high and he would have realised that ‘staff turnover’ wasn’t the real problem.

(We never did the deal. He wanted a guarantee that it would not cost him anything. With the government subsidies in place that may well have been the case, but I prefer not to do business with people who buy training only because it is free.)

The million dollar question(s):
What are the real problems in your business? Are you addressing the root cause or putting a band-aid on the symptom? 

Have fun

Dennis

TWO NEW YEAR GIFTS FOR YOU:

1.       I have a root cause analysis template in the library here. It is quite detailed and has been designed for a manufacturing environment, but you are welcome to give it a crack.

2.       You can also get your FREE e-Book on Visual Merchandising by joining up here, or you can buy the premium edition here.

AND, there are some US stats for GMROI benchmarks (department store categories) here if you are interested.

(And if you want to chat about why your staff turnover is so high… you know where to find me )

 

 

On a family holiday to the US a few years ago, we were walking the streets of Washington. (An interesting holiday destination, really.)

My eldest daughter was about 10 at the time, and she suddenly realised something about the traffic and she said: ‘Look Dad they’re driving on the wrong side of the road.’

I responded by saying that it wasn’t the wrong side; it was just the ‘other side’. She thought about that for a few seconds, and then said, to my eternal pride: “‘oh, I get it… there is no wrong side - they just decided to drive on the other side.”

She is now studying pre-med in Utah, and has adapted amazingly well. I have no fear that she is going to turn into a Mormon, or worse, end up in some weird-beard’s concubine. Because she understands this very important principle in life:

It is OK for people to believe in different things. And different is not always wrong, it is just different.

In an ever-changing Australia where the demographics of our customers and our employees are shifting significantly, we must increasingly walk the very fine line between preserving traditions and ‘the Australian way’, whilst being tolerant (even embracing) of change and different values without damaging the foundations.

When was the last time you examined whether the way you do things are still relevant? When was the last time you (for instance) changed your advertising message? Have you noticed that the ‘yuppies’ you once thought frequented your restaurant have been replaced by young families? Or that the traffic flow has changed and you need to open earlier or stay open longer?

Just because you did something one way (successfully) for a long time does not mean that it was or is the right way. It was just one way of doing it. And there plenty other ways of doing it.

Some of them may even be better.

 

Have fun

Dennis

PS: You can get your FREE e-Book on Visual Merchandising by joining up here, or you can buy the premium edition here.

1: What is The Next Big Thing?

The Internet has delivered many, many next big things over the last 20 years. (I date back to when AltaVista was the search engine of choice - and they are still around!)

Right now THE CURRENT BIG THING is social media. The problem is ‘making money’ is a dirty word in that crowd. And the companies with the big brands haven’t figured out how turn all their members/users into Cashflow. Putting my Futurist hat on, here is my prediction for 2010:

The next big BIG thing is … Foursquare. Check it out.

2: What are other small businesses doing in social media?

Here is a good post about some social media trends without too much hype.

3: How have customers changed (post GFC)?

Nancy Koehn says (US) consumers are:

1. Turning to valued brands.
2. Vetting potential purchases over the Internet.
3. Looking for the story behind the product.

It seems to me these are pretty universal trends?

And just because I can, how about the 4th BIG QUESTION?

How to you build a big, successful brand? Consider these lessons from Lady GaGa.

Have fun in 2010.

[If we call it TwentyTen as opposed Two Thousand and Ten - just think how many breaths we will save by the time we cark it.)

Dennis

PS: And there is special FREE eBook on "Visual Merchandising that Sells" when you sign up (free) to join RetailSmartResults Group.

I belatedly caught the Jack Nicholson movie (The Bucket List) on pay-TV. Sad case that I am, I saw lessons for retail in that.

The general idea being that everyone should have a list of things to do/see before the ‘kick the bucket’.

So, if your business was going to die tomorrow, but you had an opportunity to have a perfect month in retail, what would it look like? (And, no, you are not allowed to say you will close the doors and just have a rest )

I thought many retailers would compile a bucket list that looks something like this:

[And tell me whether yours would look much different?]

1.       To just have one more bumper Christmas where there is no pre-Christmas discounting and the stock flies off the shelf.

2.       To have no staffing issues – everybody is eager and willing to work and they arrive on time and do their jobs.

3.       The stock arrives on time, as ordered and the suppliers happily wait 60 days for their payment.

4.       The accountant does the BAS and there is enough cash-flow to pay the damn bill.

5.       I only work Monday to Friday and I do not receive a single phone call over the weekend.

6.       Not one single customer complaint to deal with the whole month.

7.       I only see the reps who have made an appointment and for once I feel like I have bought well and paid a fair price.

I could go on but I think you get the idea.

Does your (retail) bucket list look something like that to?

But ultimately the movie wasn’t about the sights or the experiences. The key question was asked (by Morgan Freeman in the movie) when he asked Jack:

• Did you find joy?
• And did you bring joy?

As sentimental as that may sound, these are two pretty tough questions to answer truthfully (in life) so I skipped that and thought what the retail equivalents may be.  And what I came up with was this:

• Did you find out what the customer wanted?
• And, did you deliver on what the customer wanted?

If you then revisit the bucket list above, you will see that everything revolved around ‘me’ (the retailer).

But retail success is NOT measured by how well things are going operationally. The true measure of success is measured by answering entirely different sets of questions.

Did I bring joy to my customers and did my customers find joy in my store?

Some people may say that is really easy – just give them the stuff for free (or cheap) and they will be happy.

And that is the attitude that I wage a war against. Customers don’t always want the cheapest – it makes them feel cheap. (In fact, our December newsletter is devoted in its entirety to the F-Word (free) – subscribe here if you want to receive this edition on Tuesday night.)

Of course, upon reflection, I found that I wasn’t being particularly profound; it is just marketing 101.

***

Folks I am signing off for 2009.

I will continue to write here (RSS or email subscriptions are possible) and I will also announce the publication of our free e-book on visual merchandising there. (It is our gift to members of the RetailSmart Group, so if you want a copy, register here.)

God bless and have a great Christmas and may 2010 be better than 2009. And I will do my bit to help you make that happen where I can

Dennis

 

 

Almost without fail, in every sales training session we do, someone (usually more than one) will say something to the effect that they ‘hate being pushy’ or hate selling stuff to people but they don’t mind helping them or offering assistance. As evidence for their position, they usually relate how they feel when an assistant approaches them and tries to ‘sell’ to them.

 

To all those people I say (repeat after me): Service IS Selling and Selling IS Service.

One more time: Service IS Selling and Selling IS Service.

 

In fact, we rarely do any ‘customer service’ training in a retail environment. (Only for e.g. staff working on customer service desks.)

Of course this only makes sense if your retail selling philosophy is that you are actually NOT there to sell to customers, but that you are there to HELP THEM BUY.

 

A retail store is a commercial market place. People buy stuff. People WANT to buy stuff – that is why they entered your store. Helping them to get what they want is what makes the retail world go round.

 

To view customer service as about ‘being nice’ and ‘solving problems’ is very limiting and in fact detrimental to your business.  Proper retail selling is about solving problems in a nice way – ANYWAY, so there is no need for customer service.