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Archive for January, 2010

SOHO Retail Walking Tour Yields Successful Sales Tips

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 porncam

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

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

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.

Timberland

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.

jcrew mens

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.

cupcakes3for3It 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.90_offsign

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

Burton

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.

lululemon

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 $89.1398_black_l_thumb

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.

How To Make the National Retail Federation’s Big Show Even Better

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.

twitter_logo_125x29Instead 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.

wifi-fanThis 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.

2-first-placesThe 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.

Retail Expert Notes Pundits Pissed: Retail Consumers Shopped In December 2009

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.”

dec-sales-2009

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

What Every Retailer Ought to Know About Shoplifting, Employee Theft and Five Finger Discounts

Shrink, it’s what the retail industry calls “loss.”  It is a broad category used to encompass disappearing merchandise from shoplifting customers, employees not ringing up merch correctly, employees not checking invoices to packing lists, employees giving their employee discount to friends and family, transfers that are sent to another store but never taken out of the original store’s inventory and probably most importantly – employees stealing.

Mall sign on Flickr.com

Mall sign on Flickr.com

Yes, employees stealing.

Oh, I know, not yours.  I used to think so myself until…

I was working with a small boutique hotel and had an occasion to meet with the Front Desk manager Larry and the owner.  When we told Larry, he immediately became fearful, “Why?, What’s up?”

When we got to the room and sat down, the color had drained from his face which I thought was strange. The owner began by talking about occupancy and rates when Larry butted in, “So you aren’t going to fire me?” The owner looked to me and then Larry, “No, why?”  He answered, “Oh, it just seemed the way you guys were wanting to meet with me, something was wrong.”

That meeting was so odd we decided to look over the daily “night audit;” the report that showed every transaction that took place each day.  And that’s when we found it.  In the past week, rooms were being refunded in the morning yet the charges were still going through on the guest’s credit card.  It was one of the oldest ways to steal there is; issuing fraudulent credits and pocketing the rest. Shame on us for not monitoring daily.

When times are tough employees feel emboldened to take the raise they feel they deserve; especially if they are part-timers.

The new way to do this is to credit a gift card for the return.  The New York Times recently covered the phenomenon at http://www.nytimes.com/2009/12/30/business/30theft.html?_r=1.  One of the most shocking figures they presented was that “larcenous employees averaged $1,890 in theft, compared with $438 for shoplifters.”

Yet when’s the last time you checked your systems for theft?  Here are six of my tips:

  • Never let someone take out the trash themselves; its one of the easiest places to conceal stolen product. At the very least occasionally check.
  • Monitor your reports for gift card sales; we’re past the holidays and you should easily be able to catch extremes.
  • Make random counts of your cash drawers; if they are over or short write them up quickly.
  • If you use coupons, do something to keep them from being used over and over like disgruntled employees are likely to do for friends and family.
  • Limit paper at the registers that cashiers could copy down information; better yet let the customer swipe their own card on a terminal facing the customer so the card is in clear view of the owners at all times. Then have the cashier check that the last four numbers match the front of the card.
  • If you have overhead cameras, check the number of items on a receipt match the number of the items in the bag.
  • Limit your number of part-timers; the more hours they work, the more bonded they’ll be to your operation.

I’m not advocating going overboard on this and installing surveillance cameras everywhere but I am advocating that “ignorance is bliss” is not true when it comes to employee shrink.  And it isn’t always cash, I’ve heard of cases of frozen dough, milk, samples of window coverings – the works end up being lifted.

Oh and one more thing, when you find them and you can document the loss, give them the option to pay restitution by signing an admission of guilt or going to the police.  Only if they get caught will they stop.

Managing risk is as important as growing sales if you want to be profitable but maybe your personality style is getting in the way. That’s why my new book, the Retail Doctor’s Guide to Growing Your Business pulls back the cover of how your personality can determine your businesses health. Now available for pre-order.rdgtgyb