Bob Phibbs, the Retail Doctor® blog at Retaildoc.com

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Information is power. Lew Platt, the former CEO of Hewlett-Packard, once famously said: “If HP knew what HP knows, we would be three times as profitable!” Information is all around us but the trick is, what to do with it.

If you are planning a trip to Toy Fair, your local merchandise mart or other trade show I have some advice for you:

1) Prepare – know your numbers.  Not your macro numbers like how we did for the month but the micro numbers.  What are your top five categories in gross sales and if you can access it, in terms of profitability.  Some businesses use lots of loss-leaders which may sell a lot but actually cost them money. That’s not what you want.  Look at all of your categories and find your top five to seven.  Then find your bottom five to ten.

2) Analyze. Many independent business owners are chronic over-buyers.  It’s so much fun to go to New York or Chicago and buy things! But if you bring something new in, that means something has to go.  You can’t just keep putting more merch in your store.  If sales were down 5% last year then your inventory level should be down 5% as well.

3) Make a shopping list.  Go to the show looking only to add to your most profitable, best-selling categories.

4) Be liberal.  With your best categories, go ahead, try new things, unproven things, things you have a hunch on.  The marketplace looks to you for such items because those categories are paying off for you.  You’re safe because, you’re “fishing where the fish are” trying new bait.  Even if gosh forbid you buy a stinker, you will be able to move it out quicker because there is more demand in the category. With me?

5) Be conservative. With your bottom categories, STOP. Don’t buy more because those categories aren’t contributing enough to your bottom line. I learned this in the coffee business.  Everyone said, “tea is the next big thing, you need to expand your tea offerings.”  We looked at tea sales which were less than 1%.  Even if we doubled the menu, it still wouldn’t produce the jump needed to support more POP, product and training.  Simply put, customers didn’t look to us for their tea needs. Instead we looked at the blended cold coffee drinks and tried various flavors because they represented 40% of sales – we were safe because people looked to us for those kinds of drinks and would be open to it. In your case, if you must replenish something, make sure it is a proven #1 best-seller or pass. Remember it was the pioneers who got the arrows; be a settler once an item has survived in the marketplace in your lower categories, then bring it in.

6) Use an open-to-buy.  In its most basic form it means you can’t buy unless something else has sold.  This helps keep you from overbuying for your store.

These are by no means all the tips to successful merchandise selection but they should help put money in your jeans, instead of in your vendors.  That’s because merchandise is like milk; it goes bad quickly so you only want to carry what you need, not what you want.

I cover more on this in my new book.

(If you are attending a conference, visit http://www.retaildoc.com/attend-a-conference-article.html to read how to get the most from it.)

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Are you a fraud? Are you asking customers to purchase something you yourself wouldn’t because it is “too expensive?” I was.

While I was finishing college,  I applied for a job at a western wear store. It was actually a growing trend back when Dallas and Dynasty were just beginning their meteoric rise.

I aced the job interview but when they asked if I wore western wear I confided I never had. They had a program where you could buy a pair of defective Tony Lama or Justin boots for $50. It was seen as a good way to get employees into wearing the better merchandise the store sold without breaking the bank. I got a pair of plain brown Justins. They felt good but something was off in the heel so after awhile, my feet actually hurt; working my 9-9 days were murder.

I’d do my best to tell people all the features and benefits of Justin, how they were a hand-pegged 3/4 welt which meant it was stitched 3/4 around but 1/4 had an extra amount of leather removed under the arch, around the shank of the boot with lemon-wood pegs to hold the boot together. Those pegs allowed a better fit and lemon wood swelled and shrank with the moisture in the leather soles so they didn’t fall out.

3/4 hand-pegged welt

I tried my best to get people to buy them for $189 but inside I knew I hadn’t believed in them enough to buy a good pair myself; I settled.  This led to me not pushing through to justify the product but fold my tent and suggest something cheaper or for them to wait until they went on sale.

Could that be you? Are you a window coverings store only able to sell the honeycomb shade because that’s all you’ve put in your own house – at manufacturers cost.  Do you sell Tag Heur watches only to wear a Swatch yourself?  Do you sell Cadillacs and drive a Ford? Do you silently believe your own product is too much? Maybe you feel like a fraud.

One day I realized the market for exotic boots was hot; the more I sold the quicker I’d make my store sales goal so I purchased a pair of Tony Lama pieced ostrich boots. They were not a full skin but for $399, they were still a huge step up.  Since my personal sales went up, I purchased a pair of custom Tony Lama El Rey full quill ostrich with inlays.  When a customer said they “couldn’t afford it,” I could easily sell how much enjoyment I got out of paying more and getting more.

El Rey Tony Lama Ostrich Boots

When a customer can’t decide on whether to take their big old pile of cash in the bank or credit on their card and make the premium or luxury choice, you need to know what it took for them to purchase.  That comes from owning the product yourself.

Then you can empathize with your customer that it seemed like a lot of money to pay but you found x, y, and z once you owned it.  Without that first hand experience, you’re like a priest telling a newlywed couple what the wedding night would be like.

Buy one of your premium products this week, experience the reservations that a customer would, know the joy of breaking through those reservations and enjoying the product – do that and you’ll find you’ll be able to speak from the truth rather than trying to give a snowjob when selling your premium merch.

If you’re ready to sell your merch better, take a look at the opening five minutes of Sales RX at http://www.youtube.com/bobphibbs#p/a/u/0/tEAaExPRlKQ

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Did you catch today’s news that Toyota, the brand many American’s have run to from GM and Ford because they were “better built” than the Big 3, has halted production and withdrawn eight models?  Not just came up with a recall to fix but HALTED PRODUCTION of 60% of their products due to an accelerator glitch they don’t seem able to get a handle on.   The full story can be read at the WSJ but with such a mea culpa, have they raised our consciousness to such a level that we now question all those years of quality reports?  I know I do.

[Updated 2/2: The New York Times reports, "At almost every step that led to its current predicament, Toyota underestimated the severity of the sudden-acceleration problem affecting its most popular cars. It went from discounting early reports of problems to overconfidently announcing diagnoses and insufficient fixes. You can read it all here.]

But they’re not the only ones.  Have you checked out the new Dominoes pizza ads that basically say their pizza crust sucked for the past 50 years and they had to do something to acknowledge customers’ honest comments? They’ve even created their own website reinforcing again how they had to change. You can watch Patrick Doyle’s message here.

But wait, it’s not just the Domino’s Pizza company CMO and President saying they’re sorry. How about Jr. and Ramon (the District Manager?)’s video apology to a Twitterer’s tweets about a bad experience. Just amazing to watch a DM in Chicago apologize about Dominoes 223 Lincoln.  Domino’s may have still been smarting from their disgusting employees in Conover last year and how their response was anything but mea culpa. If you missed that post, its here.

What’s fascninating is they are major companies taking the lead in saying, “Yep, we got problems.”  Maybe its due to the influence of social media they want to get ahead of things, I’m not sure but the acknowledgements are almost reveling in their rottenness.

With Valentine’s Day coming up, imagine saying to your sweetheart, I can’t see you anymore because I’ve been unfaithful, not sure when I can stop so stay tuned.” Or, “I know I’ve been unfaithful, here’s the room we stayed at, the bedsheets and notes I wrote – I get it, I’m bad but give me another chance because hey, I’ve got a video.”

Is this where watchdog reporters have led us?  Think back to Lee Iacocca’s commercials for Chrysler in the 80’s – he never said, “We sucked and hope you’ll give us a chance.”  His message was “We’re doing amazing things.”  Of course, the difference is he had high safety ratings, when you have cars that accelerate uncontrolably, you kinda ‘cede that.

Now consumers who have purchased Toyotas and those who will undoubtedly buy them in the future will scrutinize the brand like never before.

Lesson to businesses large and small, if you want to become a larger brand, you better pay attention to the most basic brand promises:

• eating our product won’t taste bad or
• our products won’t kill you.

It really is the little things that allow you to say those things. Take your eyes off the ball and you’ll be whipping yourself like the judge in Stephen Sondheim’s musical Sweeney Todd – hopefully not on the global stage like Toyota and Dominoes. Which could tarnish the reputations of others in their categories and, Toyota’s case, a whole country.

PS – This isn’t like the Tylenol scare which killed 7 people because of a saboteur tampering with the bottles in stores.  Toyota has almost 100 deaths due to sudden acceleration – they knew about this as far back as 2006. This won’t blow over.

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My mom is from Virginia.  She tells stories of growing up with her seven brothers and sisters baking two or three loaves of bread, two or three pies, rolls and cakes for Sunday dinner. Even as a single mom, she often made bread or rolls for us on weekends.  I’d watch her as I got older; she never used a recipe.  ”Why not?”I once asked.

“Don’t need it, its basic science what has to go in and what proportions.”  She was after all a science teacher.

I thought about her baking recently as I heard more predictions of businesses needing to do “more with less” in 2010.  In fact a Google search resulted in over six million results. More with less.

If you add more flour to bread dough, it won’t rise. Why? Because the yeast can’t lift the added weight.  If you cut the yeast in half and use the same amount of flour, the dough won’t work either. In either case, less is still less – something suffers.

So how can you get more with less?  Entrepreneurs are still wearing too many hats; are they supposed to put on another one?  Instead of adding staff, are retailers supposed to give existing staff even more responsibilities?  Is a store department manager supposed to manage an additional department’s employees?

In all of these cases, something has to give because the reality is, less is still less.

This reminds me of another old saying I heard a lot at NRF recently, “perception is reality.” No, only reality is reality. If I perceive I’m Tom Cruise – sorry – it doesn’t make me Tom Cruise. I think that makes me delusional.  Only reality is reality.

Doing less with more, cutting past the fluff and the fat into the marrow, has led to:

• Deterioration of basic merchandising and display techniques
• Deterioration of hiring standards
• Less people on the sales floor
• Less training by the few who run the sales floor
• An emphasis on looking backwards at data rather than selling in the moment

So what should you do? Make a list every morning of what you want to accomplish.  Next prioritize it.  Work through your list.  What is left each day may be insignificant or major.  After awhile, you’ll probably see that many major things were left undone.

I think we’ve seen plenty of “profitable” companies crowing how they are doing more with less.  Really or are they just doing less?

For many retail businesses, the bread’s in the pain – waiting to rise to the occasion or sit. What’s your choice going to be?

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With the struggling economy, I hear a lot of independent bricks and mortar stores saying they need to build an online store.   The image is millions of people perusing your products, shipping to exotic locales like Pacoima, Paris or Peru.  A website delivering the amount of customers you lost in the last two years with low overhead.

Here’s the reality: major brands are segmenting visitors to their websites by person, they are tracking where you the customer went to customize their banner ads and even which page you will see when you return.   They have a valuation for each consumer relative to each SKU, they know how the consumer will react, to which offerings and when, how fast they’ll shop and what % they’ll have to eat in returns.

They can connect the dots of a customers’ age, past purchases with other online sites, household income and spending patterns. They know what the consumer zoomed in on, what they reviewed, with whom they have social media influence, what they researched on a page but purchased on another.  They can track back their online wardrobe purchases from the past six years and build a virtual closet of what the customer owns.

They know who the bargain hunters are – like a parched woman in the desert dying for a drink, the die-hard bargain hunters will wait until the price drops to what they will pay – they know they are in the distinct minority and make up those losses elsewhere.

They know who the high priced affinity shoppers are  - the 5% of people making 20% of purchases.  Because of that, they can micro-target whoever they want with a customized list of products suited to that one consumer.

How do I know this? At the National Retail Federation’s Big Show last week, Nielsen said they track 5.55 million transactions a day worldwide, that they slice, dice and resell that information to major online sites.

In addition, an online website cannot just be for order fulfillment but a place that engages customers.  Here’s a great one in Europe. http://producten.hema.nl/ It’s fun, it engages you, you stick around to watch it unveil itself and, if you’re like me, you’ll tell others how “cool” it is.

Here’s the point, if you can’t be as committed as Amazon, Best Buy, Toys R Us, and the big boxes to deliver a seamless experience, then don’t tip-toe around it.  Heck, even Sears which is dying as a retail bricks and mortar store, is committed to capturing online biz with their new iPhone apps as well as their marketplace site , then put your money elsewhere.

Oh and one more thing: many of these big guys are selling merch online at a LOSS to build fans.  Take a look at today’s price for Sarah Palin’s Going Rogue.  List price is $28, Amazon has it for $9.98. That’s probably $5 below what the average small bookstore would pay for it exclusive of shipping.

Just how much profit would you have to make to recover the loss you would incur if you matched Amazon’s price?  Since a great independent business only keeps about 3 cents out of every dollar, one book at that price could take $150 in profitable sales to make up for that one discount.

Its those kind of decisions you have to be able to make in your bricks and mortar and online store.  I cover more of the financials in my new book coming out in April.

The easy money online has passed.  If you want to have an online store presence, you need to invest the money to be at least as good as the big boys.  Just like an independent coffeehouse has to be at least as clean as the local Starbucks with a speed of service no slower, with a product at least as fresh, you have to meet the competition’s standards just to be in the game.

Don’t pay attention to these harsh web realities of 2010 and you’ll continue to discount your goods online, upsetting your in-store customers, robbing your store of cash flow and losing focus to what really can move profits – your interactions with customers on your sales floor.

If you can commit to making your site vibrant, not just a discount place but also offering unedited reviews of your products, number of items in stock and online chat – have at it! A better use of your money is to make your website a draw to customers, then give them a reason to come into your store so you can standout, sell more and develop a relationship built on something other than low price.

What say you?

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I was in the Big Apple last week for the National Retail Federation’s Big Show at the Javits center.  Nearly 20,000 people with something to do with retail from the C level (CEO, CIO, CMO) executives, to service providers, to the media – everyone was focused on retail and grateful the holidays weren’t worse than the previous year.  I’ve done my predictions previously so here are some of the current trends in retail I picked up on.

Intel & Windows New Digital Signage

Big Box Retailers Have Given Up On The Browsers; Consumers Are Now Seen As Mission Shoppers. They have to be able to “get in quick and get out.”  It’s like the Internet has been overlaid on the sales floor.  Nowhere could this be more evident than the new touch screen interface from Intel.

Their Intelligent Digital Signage Concept Proof of Concept, presents HD video streams on two separate displays.  This signage recognizes a customers’ gender and height using video analytics and then immerses customers into a rich multi-touch environment.  They claim this gives retailers “attractive tools that can help create targeted, personal and effective customer connections.” Makes me wonder if they came up with the idea from the Tom Cruise movie,  Minority Report.

What I got from it was a giant store directory that, seeing you were a man let’s say, would automatically pop up with the men’s sections of a store and show off sale items.  What they’ll do with transgendered folks or men with long hair or a women with a Rachel Maddow haircut is besides the point. Information is a good thing – right?

Rachel Maddow

The trouble with mission shoppers is there is no magic to the experience – you’re just filling a pre-existing need.  Great merchandising is getting people to stop and discover your merch, not see your store as Tron or look at the palm of their hand.  Great retail is about looking around your store, finding your way, being interrupted by a great display that shows how several products can mix together.

Best Buy ads

Big Brother Is Indeed Watching You. Best Buy touted how they use cookies on people’s computers to monitor where a customer goes after they land on their site.  For example, if you were looking at plasma TVs, clicked off to ESPN or YES network then came back to the Best Buy site, you would be shown a banner ad tailored to sports.  If it were HGTV it might show you an ad for a vacuum. When one woman asked the marketing representative of Best Buy if there were privacy issues they faced she said, “No.” When the questioner followed up with, “How could that be if you are tracking sites visited?” She said they used service providers who kept everything legal.  Hmmm.

Blog Readers Rock! At the opening reception, longtime blog-reader Mike Murray, Director from Caliber Interactions found me and thanked me for my blog,” You stated the value proposition of mystery shopping better than I’ve seen anyone do.”  I also had owners, Directors and managers waiting for me after sessions to chat about their business who recognized me from this blog.  If you have something to say – blogs are a great vehicle to connect with people in your industry!

Online Learning is Only Good For Product Knowledge.  In various button-hole meetings it seemed many had tried online learning but found that experiential training, the kind I present to retailers, is the only way to move sales.  Otherwise, the learning just doesn’t seem to “stick.”  They can read the text but that is hard to pickup, monitor or duplicate so retailers need to create safe educational learning where they can role-play and get immediate feedback.

Merchandising and Sales Skills Have Deteriorated. On Tuesday, I was having lunch with Gordon Segal, Founder of Crate & Barrel and his team.  I thought the only way retailers will succeed with so many identical competitors in an overcrowded marketplace was to invest in sales training of the crew.  ”You’re right,” he said.  ”We had to sell back in the 60’s and 70’s, that has been lost.” Winston Weber had said earlier that day that, “Merchandising skills have dropped over the past 25 years.  We need to reteach the basics.” Amen to that!

Original Jake Drawing

Accidental Businesses Can Prosper. Life is Good started as an antidote to negativity.  The Jacobs brothers sold t-shirts for five years with no success.  When they came up with the design of Jake and the words, “Life is good,” they sold 48 of the new designs in 45 minutes back in 1994.  That may not seem like much but it was enough validation to them to go with it.  Thereafter, anything that celebrated life Jake could do.  They expanded their company by celebrating the simple things in life – hiking, fishing, ice cream.  They found a niche by accident and grew sales from $87,000 to over a billion dollars in sales.  John Jacobs is an Amiable personality that built on his natural inclination to be with people and created a company focused on people and helping people. His story was worth the cost of the convention registration alone.

Online Retailers Are Looking To Get Into the Bricks and Mortar. With so many stores looking to bring their business online (which I’ll tell you about next time,) I was fascinated by the online retail CEOs sharing their plans to expand out from virtual reality to storefronts.  One told me, “We can give a better experience for our brand through people.”  No names given but this could be interesting to watch.

Social Media Continues To Get Rave Reviews For the Isolated Stories.  There are a certain segment of Feeler personalities that are happy to volunteer their time as “brand ambassadors.”  They are the golden ring for many retail marketers who have scads of fans on Facebook and followers on Twitter.  Are these consumers who get off bragging about connecting to large brands  (did you know Tide laundry detergent has 300,000 Facebook fans) really driving sales or just an experiment?  Everyone is looking for their ROI (return on investment) when it comes to social media.  James Bickers, Sr. Editor of Retail Customer Experience highlighted a woman upset her wedding dress hadn’t arrived, Tweeting about it, Bloomingdale’s hyper-responsive responses, day saved and customer happy.  But is that really great customer service? Which leads me to my final point.

Great Customer Service These Days Is About Fixing Things Gone Wrong Or Getting Your Way.  It’s like a spoiled child being listened to.  Is that great customer service? I don’t think so but from the NRF awards, that’s what was rewarded.  Great customer service is an experience so tangible, so connected to another human being from the start that the shopping experience with another human being stands head and shoulders above any experience the customer had that day at work, at home or in the mall.  So exceptional that the shopper felt compelled to tell others how remarkable it was to friends, family and co-workers and then yes, posted it on Facebook or Twitter. That’s the mark of customer service from a customer standpoint.

From a merchant stand point it is to sell the merch so convincingly that the customer doesn’t even know the interaction follows a process (like my Sales RX: Five Parts to a Successful Sale) that builds the transaction, basket or average check while building a dynamic relationship with the salesperson and then the brand or store.  That’s the trend we need to see more of or we’ll see more people grasping at the straws of technology because its easy; not the foundations of great retail which is to sell the merch which takes training.

Learn more about how to build your business by pre-ordering my new book, The Retail Doctor’s Guide to Growing Your Sales

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[Note: This post is not about business today and while it is posted on Martin Luther King Jr. Day, it is not a story about civil rights as much as it is the people who were affected by the civil rights movement.]

me and my two brothers 1962

My dad would always sign his letters and talk about how he was proud pop of his “three boys,” but I couldn’t take that in most of my life, because I wasn’t proud of him. He was out at meetings, on the phone or if he was home, too tired and asleep in his chair.You see, my dad led the march for equal housing and race relations as the Executive Director of the Council of Churches in Toledo, Ohio during the 60’s.

Civil rights were the favored son in our tribe.  The sexier one, the one with all the trophies, the one who was all over the papers. To him, civil rights for all were the driving force to his life. My brothers and I were invisible to him.

His cause was front and center to all the neighbors’ kids in our all-white neighborhood (ironic, I know.) We were routinely pelted with rotten apples in the fall or ice balls in the winter while walking to or from school or beaten up on the playground.  All to the taunts that we were, “N-lovers.” I was the first one home so I saw the death threat postcards in red marker and several times I picked up the phone to hear, “You’ll never see your dad alive again.” While you could try to make a joke of it, the fact was he gave our all for his cause.  At eight years old, that wasn’t fair. I held onto that pain like a dirty blanket of comfort most of my life.

I had to find a way out and went with him to the Phibbs Family reunion one summer. He shared how it was 40 years ago to the day, when the March on Washington took place.  He knew it would be historic and he organized a busload to go from Toledo. As the day approached news reports quoted the FBI’s J. Edgar Hoover saying, ‘Violence is expected: some of you will be shot and killed.”

He rewrote his will and made sure his life insurance was paid up. Then he drove my mom and us three boys to stay with my mom’s grandparents in the Shenandoah Valley, understanding he may not see any of us again. I was five.

He met the bus from Toledo in Hagerstown, Maryland for the ride to Washington.  When he got there, there were hundreds of buses lined up. “I never saw so many angry people out on sidewalks. They didn’t want us there. They were holding brooms, baseball bats; whatever kind of stick they could get their hands on. Later I stood 20 feet from the stage and when King walked to the podium “you could hear a pin drop -even with 250,000 people.  As he reached his “I have a dream” crescendo, the stirring in the crowd was like a giant thunderstorm rolling from the back to the stage. It took several seconds for the noise to reach us in front. When King let loose, that crowd went wild.”

He said it was the best day of his life.  Not when I or my other brothers were born, or his marriage or when he was the first Phibbs to graduate college – it was being in attendance at an event away from his family.

How could a man leave his wife and 3 small sons and know he may not come back?

I can’t imagine doing that.

The next day my dad confided in me, “Your brother once asked me if my devotion to social justice had been worth it. I told him at the time: `If you’re asking whether any progress was made for blacks, 10 years ago I’d have said yes, yes, the progress was worth the sacrifice. Now if you’re asking me, was it worth losing my family, home and profession? No, it wasn’t.”

I didn’t expect to hear that. My pain was worse because I was a little boy. Now I saw we both shared the same pain, mine wasn’t better or worse.  I withheld my love most of his life making him pay for what he did to me by his involvement in civil rights. Now I got it, we were equally hurt.

When I got home and opened the binder he gave us, “What did you DO in the Wars daddy?” The Cover of the Boston Globe, “Preacher takes on Air Force.” Page after page of accolades from people in Toledo.  “You kept us going.” Headline, “Rev. Phibbs run out of town by bigots.” Tears start to run down my face.  Pictures of a thin, hopeful man in his prime.  I read a letter “If you hadn’t been here, I don’t know what we would have done.”  More letters and recommendations.  Ohio ACLU man of the year. This is his chest of medals. He was a great man.  He never passed.  Never wanted to pass. I always cared what people thought.

I went to my computer and began to write, “Dear Dad, I am a continuation of your parents dream of getting out of the Appalachian coal fields to a better life. I can only imagine how it would feel to be my age and realize your marriage was falling apart, your kids were growing up without you, the era of non-violent protests were ending as “black power” emerged, the cities erupted, the war raged and everything seemed in flux.

We didn’t make it out of that dad without our lives being inextricably altered. None of us. I know I can be curt with you and have a real problem talking with you because I haven’t really felt listened to – haven’t felt it most of my life. I stand today on some very big shoulders, including yours to enjoy the life I do today. I can only hope that I can live up to your conviction, passion and purpose driven life.  I’m proud to be your son.”

I know I could easily have talked myself out of sending it.  I didn’t like being vulnerable with him. I printed it and without reading it over, mailed it- not willing to let this feeling of reconciliation pass. I called him a few days later at the nursing home he lived in in Charlotte, NC.

“Hey dad, it’s Bob” I could hear CNN in the background, “this is Anderson Cooper reporting from Washington.”

my dad in the 90's

Dad said, “Well howdy, let me get this TV off.” I heard him fumble with the control, he snorted, and gave up.  Normally he’d start off with something about how the Republicans are ruining America, the FunDAMENTALISTS or some story about gays.  Today is different,

(Dad) “That’s a letter I wanted all my life.  My son doesn’t hate me or is embarrassed by what I did.”

“No dad,” I was able to give for probably the first time in my life without anger to him. I waited my whole life for this.

My dad passed away last fall, a true warrior out to help the world be a better place.  While he did not have the visibility of Dr. King he and thousands of others paid a price to make the world a better place.  People often think of the cost of civil rights was Dr. King’s death but many families, both black and white, paid a heavy price.

While the stories will deservedly honor Dr. King today, this post is in honor of the families of the cultural warriors who knew that the struggle for civil rights wasn’t black and white but a lot of grey.

[This post is based on a memoir I'm writing entitled, "I Have A Scream."]

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I was fortunate enough to do a walking tour of the trendy SOHO area of New York Tuesday afternoon with retail consultants David Polinchock,  Marge Laney and her team at Alert Technologies and Kristine Bellow. It was a perfect afternoon for shopping New York, clear blue skies, chilly temps and people crowding the sidewalks of Broadway.  I made a decision, if I got great customer service, I’d buy something, if not, no dice.

Holister

Since Michael Jeffries, the CEO of Abercrombie & Fitch, accepted the Gold Medal Award at NRF, our first stop was their flagship Holister shop.

OK I get that I’m not their target market since I’m a 50-year-old guy, BUT this shop was like going into a dark bar. Spotlit were half naked buff boys with a beautiful young girl next to them dancing to the club music. OK, get it, atmosphere.

Holister pier cam

They had live cams of the Pacific Ocean at Huntington Beach towards the back, above, another nubile couple.  No interaction with the people going in and out – without shopping bags.

It’s like they were paid to be at their own party watching the party-crashers.  The energy said, “This is our place.”  A few “’sup”s were heard.

Retail isn’t all smoke and mirrors – someone has to pay for the goods or you’re just making yourself happy; its all for you.  In the book, Why Is It Always About You? : The Seven Deadly Sins of Narcissism the authors identified what she called the seven deadly sins of narcissism:

• Shamelessness
• Magical thinking – Narcissists see themselves as perfect using distortion and illusion.
• Arrogance
• Envy
• Entitlement – Narcissists hold unreasonable expectations of particularly favorable treatment and automatic compliance because they consider themselves uniquely special.
• Exploitation – can take many forms but always involves the using of others without regards for their feelings or interests.
• Bad Boundaries – In the mind of a narcissist, there is no boundary between self and other.

Those attributes seemed right on with this store.  I agree with their philosophy of not discounting but Abercrombie’s line of ultra dark brown stores are off putting and don’t encourage fun and all the attributes you think of a young brand. Oh yeah, where were the lines of shoppers? Not there but down the street.

Uniqlo

At Uniqlo, the Japanese juggernaut out to give H&M and Forever 21 a run for their money. The store is all in white with the very colorful sports separates lining the walls like an early Gap with every color of the rainbow. A bit utilitarian for my taste but people were shopping, holding items up, asking their friends, talking, laughing.  Granted their items were half the price of Holister and the unisex styling could feminize the baddest bad boy but people were buying.

On to Timberland where we encountered a true “green” store. They’ve  made a great destination store that fits their image;  the young man engaged me from the moment I went in pointing out all the ways they had used reclaimed materials.

A nice touch behind the register was the map of the parks around NYC – clearly this is not a cookie-cutter store.   While I was considering a pair of Smart Wool socks the young man told me about how well they worked so I got a couple pair at $20 each. What happened next was truly remarkable.

At the register, the manager happened to notice my badge under my jacket from the NRF convention. “What do you do in retail?” she asked.  I told her then she asked, “What could we do better to increase our sales do you think?” WOW, you could build a business on this young woman.

I told her, “The young man probably could have pointed out a pair of shoes to go with the socks.  You have a wonderful store and nice employees so your job now is to build each transaction; each customer needs to buy more product. Once they say, ‘yes’ it is much easier to say it again and again.”  She thanked me and off to Top Shop.

This is a great British import.  Three levels of young hipster clothes with add-ons represented with every display, integrated with every rack, suggested in every window.  Just wished I saw employees engaging customers.  For such a mammoth store, some sales training (like my Five Parts to a Sale perhaps?) could ignite the true potential they have.  Again, another bright store with shoppers and shopping bags.

J. Crew Men's

A stop at the Madewell women’s boutique from J. Crew was an interesting novelty, displayed attractively with unusual items mixed in with what looked like vintage Americana women’s clothes now made in China.  The J.Crew men’s store next door was better displayed and felt more authentic with their limited choices of items and apparel.

It was time for some sugar and since we were nowhere near the legendary Magnolia Bakery, spotted a tiny little walk-up window for cupcakes: 3 for $3.  We ordered three and were surprised when the young woman handed them in a paper muffin liner – all three.  Donut holes would have been a better comparison.

Just down the way was a luggage store using one of my favorite misleading signs in retail, “90% Off ALL BAGS.”  Then you got close enough to read the full sign, “Everything On Sale Up To 90% Off All Bags.”  Jeez, give me a break. Oh yeah, no one in the store.

Made it all the way to the Burton store, which is designed like a ski lodge for snowboarding and found their Cold Room.

Three or four air conditioners were running to make it even colder than outside.  Very smart move as snowboarders would want to try on the gear to see how they could move and out on the sales floor, could easily get overheated and walk without buying.  A bonus is they have a different local artist come in monthly and redecorate it.

Last stop was Lululemon and if you haven’t heard of this extraordinary store for yoga wear you must.  Their philosophy, business model and products merge into a great experience.  From the moment we were greeted to when I asked about their yoga pants for men to the young woman asking me about what I’m using now, selecting a pair for me to try on, and her shepherding me back to the dressing room where I was met by another associate, this is how all retail should be.

I quickly tried the pants on, a bit too quickly as the young woman was waiting outside with a size smaller and another style.  While chatting, I learned about their goal planning session they had held in their store the previous Sunday and how much the saleswoman was jazzed with her five-year goal.

Above the displays were actual SOHO yoga instructors’ pictures with their information.  A remarkable experience and, since I have started yoga in the New Year, I purchased a pair of downdawg pants for $89.

So what could you learn from this trip down Broadway in Soho:

• If you want to be different in retail, just make sure they’re buying it.

• The right person can make all the difference on your sales floor

• A pretty store is nice but one with a story is better.

• Lighter stores seem to have more visitors than dark

• Some merchants still feel they can “trick” customers with signs and products that don’t live up to expectations.

• If you’re hungry for cupcakes – go to Magnolia Bakery and get one of the real ones.

Walking tours are a great way to get to know any brand whether it is Rodeo Drive, Michigan Avenue or your home Main Street.  Noting the good often gives inspiration to try something new in your store which helps peak curiosity in your shoppers. Noting the bad can make you look at employee training and even displays in a new way as well.

In April, the Retail Doctor’s Guide To Growing Your Business will be out from Wiley & Sons with special emphasis on how to display correctly to improve sales.

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I attended the National Retail Federation’s 99th Annual Big Show in New York this past week. While primarily geared to the biggest retailers, they had an excellent half-day sponsored by American Express OPEN for independent retailers, which was a first and should be expanded.  

No real surprises as to what the most prevalent topics would be: social media, new ways of using technology both online and in-person, and m-commerce (mobile phone payments and shopping.)

Personalities are the focus of my new book so I might as well tell you now, I’m a Driver personality; an innate fixer. While I think it was a great convention, here are fourth things that would have made it even better – maybe next year when the Big Show turns 100:

1 – A Giant Twitter Board.

Instead of rehashing social media do’s and don’ts like it was 2008, how about a dozen huge HD displays showing actual tweets about the largest brands in attendance. Bonus would be displaying all the #nrf11 tweets in real time – both good and bad. The board could do the same with Facebook Fan pages and others.  It would have brought the need for monitoring social media, personality of your business, etc home to all the attendees much better and sparked dialogue among attendees.

2 – Wi-Fi Throughout The Javitts Center.

This has to be embarrassing to NRF that this facility can’t provide reliable connections. NRF should partner up with their solution providers AT&T and Verizon and the rest to fix it.  Social media was worthless on the show floor and cost vendors some buzz.

3) Split The Award.

The NRF Foundation Customers’ Choice award, conducted by BIGresearch came up with these results:

• 1. L.L.Bean
• 2. Overstock.com
• 3. Zappos.com
• 4. Amazon.com
• 5. QVC
• 6. Coldwater Creek
• 7. HSN
• 8. Lands’ End
• 9. JC Penney
• 10. (tie): Kohl’s
• 10. (tie): Nordstrom

What disturbed me about these awards was that most were online shopping pages. Though 90% of business is still done in stores, 8 of these awards went to only 9 or 10% of the industry; LL Bean only has about 14 stores nationwide.

“Customer Service” is a very gray term. Was it because you could return things easily? You got great coupons? They had free shipping? Is that “customer service”? Not in my book.

This is a dangerous message to me that it is not about PEOPLE but policies. I would suggest NRF split this award going forward into the top 5 online shopping pages (like Overstock.com, Amazon, etc.) –and the top 5 bricks and mortar stores that may also have a multi-channel approach (Nordstrom, JC Penney, Carte & Barrel, etc.) Otherwise, it’s just a way of rewarding the programmers, not the people who interface with customers every day. Which leads me to my fourth…

4) Remember It’s About People, Not Computers.

Got it technology is important. Got it analysts can slice and dice information a million ways. Got it the IT gurus know who’s shopping. But how can we hear over and over again about the “customer experience” and leave out the people engagement? How do retailers surprise and delight when management has decided to manage by % of labor, not human capital?  Smart retailers will realize that they need to sell the merch in 2010, not just stack it.  That doesn’t come about by price-matching and encouraging customers to stare into the palm of their hands, but engaging them with interesting and interested employees.

The National Retail Federation is a great organization that brings the industry giants in one place each year as well as sponsoring various events and programs throughout the year.  If you attended the convention this year and any of these ideas have value or if you can think of others, please include in your comments below.

Tomorrow:  putting some of the flagship retail brands to the test in SOHO and lessons for success.

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Well, they got it wrong again,  some 75 percent of retailers beat analysts’ estimates. Pity those talking heads, the doom & gloomers anxious to be seen as smart and savvy missed it –  again – retail sales increased. In my white paper which I created last fall I predicted the same stories would repeat with a herald of “whoops” in January and for the 10th out of 11 years, they got it wrong. (You can still download the proof here.)

Maybe you remember the article in Forbes from December 3, “Economists say depressed spending could persist for several years amid stubbornly high unemployment.” Or as recently as December 14 in a USA Today article, “Only 35% of consumers surveyed over the weekend said they would shop in the week after Christmas, according to survey questions posed by America’s Research Group on behalf of Reuters.  Last year, 38% said they planned to shop after Dec. 25. Over the past decade, 48% to 55% typically said they planned to shop in that week, America’s Research founder Britt Beemer said.”

Source: Wall Street Journal

Yet in the light of day? Oh, gee most retailers had increases in December.  For example, Bed Bath & Beyond Same-store sales rose 7.3%, margins rose to 41.1% from 38.9%.

It wasn’t just the new darling of the media the Dollar stores that increased – even Neiman and Nordstom – hardly the “value” brands of discounting.  While reports of only electronics having increases and apparel the worst performers for December, the strongest growth came from apparel chains that cater to both adults and teenagers.  Who knew?

Let the pundits go crazy taking shots again at these figures saying they, “Don’t matter.”  They do. Get ready for a comeback, not to 2005-7 levels but to those who want them, the customers are out there. Shopping. Luxury. Premium.

Go get ‘em!

To get ready for the comeback, pre-order the new book from Wiley  the Retail Doctor’s Guide to Growing Your Business

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