This debate features Bob Phibbs, the Retail Doctor and Kevin Graff from GraffTV discussing bricks and mortar retailers, the effects of mobile shopping and in particular the Amazon price matching app.  Here is the video to watch and an edited transcription below.

So, the most profitable items you have in your store are the ones are that are going to be scanned. I’m not talking about a little widget for four bucks down at the Five and Dime, I mean the really expensive stuff, consumer electronics or those kind of things. That’s my point.

Kevin: Well, interesting perspective, and I’m not so sure that I could disagree more than with anything that you just said.

Bob: Perfect.

Kevin: I mean, I think there’s some truth to what you’re saying, as there always is, but I think common sense and history tells us that we will be just fine as we go through this. I think what Amazon is doing, and it’s not just what Amazon is doing, it’s what everybody’s doing around this show with mobile and social this, and connect to that, and e-com that’s been around now for a little while. It keeps advancing and it keeps growing in terms of significance, but look, retailers adapted. If nothing else, retail is a survivor. We’ve survived the arrival of the mall. We survived the arrival of big box retail.

Bob: I’m not that old, but OK.

Kevin: Do you remember the invention of the cash register? Monumental shift in how we did things.

Bob: I don’t think that’s the same because then it was just there for your four walls, and now, here for your four walls, Amazon accounts for 20% of all purchases online. That is huge; that is globally what they do.

Kevin: 20% of all purchases online, but not 20% of all retail purchases.

Bob: Well, that’s the whole point though, is that it is so trusted that they, by default, become the trusted player.

Kevin: Are you going to scan me to see what you can get me for online?

Bob: It’s only pennies, folks at home. You can check that out, Graff Retail TV.

Kevin: But if it’s what this is going to do, and this is the good news. The reason I’m happy to see things like Amazon’s price check come out in mobile and all of its different formations come out, is because from a consumer’s point of view, and we’re all consumers first and foremost, what it drives is a better shopping experience period.

Bob: Really?

Kevin: Absolutely.

Bob: How do you see that?

Kevin: Well, think about this. Every time, I’m up in Canada, I always say the best thing that ever happened to Canadian retail was the arrival of Walmart. Walmart arrived in Canada in 1994.

Bob: Made everybody up their game.

Kevin: Everybody had to up their game, but we took a look at the retailers that were most threatened by them, retailers like Canadian Tire. If you saw what they were then to what they are now, it’s a classic example of what’s going to happen inside. So, is there going to be some shake-out? Yeah, there’ll be some shake-out, honest, but there’s always shake-out. At the end of the day, the consumer wins.

Bob: But retail, we just heard today, is responsible for one in four jobs in America.

Kevin: Absolutely.

Bob: So, if we took a hit of, let’s say, 20% of people go mobile or something, into this one player…

Kevin: Right. Well, we re-allocate those jobs obviously. I’m thinking somebody’s doing all this programming and picking and packing…

Bob: Doesn’t take it, doesn’t take that many people. Here’s my thing.

Kevin: I’m not the economist on this, Bob.

Bob: Here’s my thing. So there you are, you’re our number one sales person for widgets.

Kevin: Right.

Bob: OK, you’re working with Bryan over here and he’s working with widget central and you’re the number one guy, you’re a commission-based guy. You finish the sale and you’re like, “Great, I’ll take it,” and he says, “Wait a minute, let me just get out my scanner.” He scans it…

Kevin: Absolutely.

Bob: He finds he can get it for $300 less, throws it in your face and says, “Are you going to match price?”

Kevin: Absolutely.

Bob: So, a lot of debate is going to be about this because right, a lot of retailers will say. “Well, we will match.”

Kevin: Absolutely.

Bob: So, how often can you do that?

Kevin: Now, it will be policy driven at that stage of the game.

Bob: And what does this guy want to do? Does he want to work in that environment still?

Kevin: Well, see, and that’s the thing that changes it. So now, how does a retailer evolve against that? And you see it out there right now but in different formations where one retailer will sell one item for one price, another one will sell that same item for a completely different price in town, and still sell lots of it. Case in point, take …

Bob: But you have to go there. That’s my point.

Kevin: Think about it. Go into the mall, you can buy a pair of Levi’s jeans, right, at Walmart, $5 cheaper than at the Levi store in the mall, but the Levi store in the mall still sells hundreds and hundreds of jeans at $5 more. Why? Because they give you something more that you can’t get at the Walmart store.

Bob: I’m totally with you.

Kevin: That’s what happens with retail.

Bob: But when I’m in that “something more” Levi’s store, and I’m in it. I had that experience and gosh, they loved me, and I know Cary.. .

Kevin: Absolutely.

Bob: She’s so wonderful, and she does it, and then I go, well I think about it, and I scan it, and it’s free shipping and returns. That’s what I’m saying…

Kevin: And is it a game changer? Yeah, it’s a game changer.

Bob: It’s a huge game changer though.

Kevin: What’s rule number one, and I know you say this to all your clients out there. You’re not going to be all things to all people.

Bob: Absolutely not.

Kevin: There is going to be that bottom feeder that’s going to look for that lowest of lowest of lowest price out there. I get that. Absolutely.

Bob: Tell me you’re not going to be a bottom feeder.

Kevin: You’re the guy that crusades against Groupon all the time, are you not?

Bob: I am. That was another discussion which we’ll have up here, too.

Kevin: But not everybody is going to be that bottom feeder, when you look at how this shapes out.

Bob: But that’s not a bottom feeder. If you and I were going to buy a plasma TV, and we had a great experience at Best Buy. You cannot tell me you would not be curious with that $3,000 system, you would not be curious what Amazon was.

Kevin: Absolutely, but at Best Buy they’re also going to show me the best way to be able to install it.

Bob: They should do it.

Kevin: Or they’re going to provide an educational component to that, and I can’t get all of that online. That’s the differentiating factor. You’re not wrong, this is going to be  challenging.

Bob: Well, and you’re not wrong either. This is the debate. This is why we wanted to have this debate is because this is what we’re not hearing in a lot of the booths here, right? We’re hearing that if you’ve got a tablet, baby, everything’s great.

Kevin: Absolutely.

Bob: You’re going to be fine. If you’ve got a virtual wallet, if you have a little app, everything’s great, and you and I both, because Kevin and I are very similar personalities in that we both think it’s about the person, the humanity…

Kevin: Absolutely.

Bob: …that moment that somebody walks into your store.

Kevin: That’s what we’re probably not seeing enough of around here. It kind of gets lost in the noise of all this technology and all this IT, and this is all really great, and I think it’s all really cool, and it’s important. I’m not here to say that’s not important. I’m not living under a rock in the past, but what I do recognize is that we’re just going to continue to find better ways in retail to represent it. If we want to be bricks and mortar retailers, we’ve got to start creating better shopping experiences in there, and that’s going to come by adopting some of this technology inside the stores.

Bob: With the employees though, not instead of them. That’s my thing.

Kevin: Exactly, but there’s going to be some stuff that we’re going to do in the absence of employees that’s going to make the shopping experience better, but I’ll tell you, everybody’s going to step up their game from an employee perspective. So whether it’s staff coverage, whether it’s staff ability, whether it’s staff knowledge, all that’s going to pick up.

If traffic counts are going to go down into your store, you better get your conversion rates up and you better get your average sale up.

Bob: Because the people that really want to be there, really want to be in your store.

Kevin: Absolutely, and the fastest way to be able to do that growth in your business is going to come through your staff. Get them off their butt, get them waiting on some customers, teach them a little bit more, teach them how to sell, teach them how to drive.

Bob: And hire them better, to start with.

Kevin: Right.

Bob: But they really need to enjoy going in there and meeting another person.

Kevin: Yeah.

Bob: That’s kind of shocking.

Kevin: Why would you want to work in retail, if you didn’t, right?

Bob: That’s a great place for us to end.

So what say you? Is the Amazon price check app a gamechanger? Do you expect bricks and mortar to thrive? Please enter your thoughts in the comments below.

If you haven’t downloaded my special report: Bricks and Mortar Retailing At Risk in the Digital Age, you can still do so here.

My thanks to Marge Laney at Alert Technologies and our cameraman Brian Laney who made this all sound and look great!

This interview features Marge Laney with Alert Technologies and Bob Phibbs, the Retail Doctor discussing how fitting rooms are a missed opportunity for many apparel retailers. Here is the video to watch and an edited transcription below.

Marge:            No, actually, exactly the opposite is true. The only reason the brick and mortar apparel retailer exists today, and will in the future, is because of their fitting rooms. And the reason I say that is, back in 2003, Envision Retail, a consultancy in London, did a study. They found that over 70% of people who use fitting rooms buy, versus the people on the sales floor that just browse and not use the fitting room, only would buy 28% of the time.

They just redid that survey last year, and it was stunning to see what happened. In 2010, only 10% of the people that browse the sales floor purchase, compared to 28% in ’03.

Bob:            That’s huge.

Marge:            I thought about that for a long time. I thought what is going on? My answer: Online. The browsers aren’t coming to your store anymore. The browsers are going online. The browsers are staying home, and they’re staying in their jammies. They’re getting online and they’re buying there. So what does that tell us? That tells us that the customer that walks through your store is there to fit and feel your stuff. And it’s so important that you engage that customer and drive them to the fitting room every single time.

Bob:            But that’s hard to do, isn’t it? An awful lot of people say, “But I don’t have the staff for that. I’m going to go through and add all these fitting rooms? How do we know they’re in there? Am I supposed to look under and see feet?”

Marge:         You’re exactly right. That’s why they need to start looking at their fitting rooms in a different way.

Bob:            And to build on that, aren’t most people looking at fitting rooms like this is loss prevention?

Marge:         Absolutely. Even here at the NRF show, I’ve talked to people in the aisles that have fitting rooms and they’ll tell me that they’re just sort of a pain. That they’re, as you say, a loss prevention nightmare, hard to clean, hard to service, etc. But what they don’t see is that it’s the highest conversion zone and that they should be addressing that.

Bob:            But whose read Envision?

Marge:         Exactly.

Bob:            I mean, is that something that’s big?

Marge:         And they, well, this is their business. They should make it their business to understand, and that’s why I’m the fitting room evangelist.

Are fitting rooms something you look for? When you use them, do you secretly scan the items to see if they are cheaper online? What would a good fitting room experience look like for you? Please add your comment below.

My thanks to Marge Laney at Alert Technologies and our cameraman Brian Laney who made this all sound and look great!

This interview features Ben Sprecher from Incentive Targeting and I discussing how technology can be raising the bar for customer service to unattainable heights, in particular the buy online, pickup in store movement.  Here is the video to watch and an edited transcription below.

Ben:            There are no isolated silver bullets in retail. Right? It’s all about getting the right collection of solutions together, and the collection, not just of technology solutions, but collection of people solutions, process solutions, store format solutions, all of these things together, are what you need to do as a retailer in order to get the most out of any one of these components. So, we were using the example of the person approaching the coffeehouse, ordering their latte. If you, as a retailer, provide that capability where they can pay on their phone before they get there, they can order before they get there, and they have to wait in the same damn line, you haven’t solved any problems for that person. But if you, as a retailer, say, “We have a new way to talk to our shopper in a very targeted, very personal way, in a very limited and quiet way, in a way that they respect and they want,” you also need to turn around and provide the supporting infrastructure within the store to make that a great . . .

Bob:            That can be a huge cost

Ben:            But it can be a huge opportunity. Right? If you think about the value of being able to have that express line sitting next, the red carpet line if you will . . . so you have the long line over here, you have the red carpet line over there. And the people in the long line notice the people in the red carpet line keep showing up, picking up their coffee, walking out of the door. Every single one of those people would say, “How do I sign up for that, man?”

Bob:            Dude, as a coffee guy from years and years ago, I’m telling you, you would have people livid that that happened because not all of them are going to be on their smartphone. And what happens on the day Janie forgets her smartphone to order it? Now she’s got to be in that line. But she’s telling the barista, “But you already know me. I’m always in the express line.” I guess, that’s one of the things . . .

Ben:            And this is where there is that transition. Right? It’s a complicated transition in that world.

Bob:            Yeah, but nobody’s adding staff for that. And I think – to the point of the shop online and pick up at the big boxes – management is saying, “Well, look, we already have people pick stuff up in our store anyway. Why wouldn’t they just be able to use existing employees?” Which makes sense. Wouldn’t you agree? I mean, if you were in your office, that makes a lot of sense – until you’re the guy waiting for two hours to pickup your TV.

Ben:            Right. It makes sense in terms of the spreadsheet of how many staff do I need for the store. What it doesn’t make sense in terms of is, how do I make sure that particular experience that consumer has is one that not only says, oh, I’m not just in New York across the street, but in other places in the country I’ll drive a half mile out of my way, to make sure I hit the coffee shop where I can get my coffee instantly as I show up on my way in the door, with no problems. People will change their behavior for really great retailers who do really great targeted customer things for them. And the people in that long line who, the first time they see that happen get a little bit upset, the person at the front of that register can’t be like, “Oh, dude, sorry, it’s, you know, your problem.” They need to be saying, “Oh, this is a great new program we have in place. Here’s what you do.”

Bob:            That’s not going to happen. I’m just looking at the operations behind that, especially a barista who’s being pay is dependent on being tipped. So now, your best customers will be going to the express line.  Talk about coming up with an unequal system in your store. It’s like the haves and the have-nots. I think that’s really dangerous, because I think retail is kind of a great democratizer. So, it becomes that . . . and let’s face it, the statistics last week out of The New York Times was that 1% of the people are driving 90% of the bandwidth in mobile. So, it’s a much smaller target than anyone’s saying. I mean, if this was 90% of the people had a phone and they could do it, great, but I don’t think that’s not where we are right now.

Ben:            The reason that bandwidth is being consumed by a very narrow group of people is because, I think, we collectively, we the technology industry, we the retail industry, we everyone have not provided the really great, compelling next generation of experiences on the phone that are so easy to use that everybody can use them. Smartphones are rolling out like crazy. Everybody is getting them. People are forced to buy the data plan. They’re spending $120 a month, anyway, but all they’re doing on that thing they’re occasionally checking their email.

Bob:            I’m often just looking at a map.

Ben:            Looking at a map. Yesterday there was a great session that Cognizant ran where they were talking about building the store of tomorrow today. They pointed out that we are at the point now where mobile web browsing, minutes per day in the United States, has passed stationary computer web browsing, in minutes per day.

Bob:            But what is that mean, though?

Ben:            What’s happening is people are shifting where they think about interacting with information, and they’re starting to do it much more on their phone. You’re right, there’s definitely a steep curve there. There are a lot of people doing a lot and most people doing very little.

Bob:            I guess my thing would be balance, Ben. I want to stay with the coffee house, because I think between that and the shop online and pick up in store is a big deal, because what I’m hearing is that it really is an integrated business but it’s almost a different business if you’re going to be doing the mobile with the cool technology. You really have to set it up that if this is always going to be on, then it’s almost like your store has to always be on too, right? That that customer could come in, and they have to be able to have that same always on experience, and then . . .

Ben:            Or have to have the right expectations set from the very beginning. Right? If that always on experience is available during rush hour in the morning and rush hour in the evening and lunch, then when you go into the application not at that time, it needs to say, “I’m sorry, you can’t place your advanced order right now through this application.” So it really has to be sensitive to be aware of not just the who and not just the marketing side of it, but the where and the when of each of these interactions with the shopper.

Bob:            And I’ll go to the next one, which is the operational issues that support it, because that’s the one I think that we’re missing.

Ben:            And the operational issues to support it. You can’t have a disconnect.

Bob:            People are raving about it like, “What a horrible experience.” I’m, like, “Really? You had to wait a half hour.” “But I ordered online.” Right? So . . .

Ben:            Right. It’s mis-set their expectations. They’re setting the wrong expectations and not executing on it.

Bob:            And even if a brand set that expectation, though, do you think a customer would listen to it? Because we customers are an impatient group. I’m talking over you right now.

Ben:            If it set all the way to the very front of the experience. One of the greatest experiences I had was with the Registry of Motor Vehicles in Massachusetts. Now, I don’t think anybody has ever said those phrases together before.

Bob:            No. I don’t think so. Any of you out there? No.

Ben:            When I had to do my most recent driver’s license renewal, I went and checked. I could look at each one of their locations and find the current wait time at each one of those RMVs online. I was able to change the one I was deciding to go to. That’s incredible. I knew that I was heading for a half hour wait, but I knew that I wasn’t heading for the hour and a half wait. Right? And so was I happy with that half hour wait? Damn straight.

Bob:            The expectation was set.

Ben:            Because the expectation was there right from the beginning.

Bob:            That might also be interesting if you were doing the application, we’re staying with the coffee house idea, that maybe it would say, “And there are six people in line right now.” That would be cool.

Ben:            A little camera there. You could see what’s going on in the coffee shop right now.

Bob:            All right. So, I think we’ve solved the world’s problems here with this. But anything else? Final thoughts come to mind about setting the customer expectation high or low and . . .

Ben:            At the end of the day, it’s all about respecting the customer, about talking to the customer in a way that values the incredible intimacy of this channel of talking to them, and that is targeted to who they are, to what they buy, to where they are, to when they are. When you start thinking about saying less and saying the right things instead of saying more to everybody and the wrong things, those are the retailers that are going to win. The retailers that are going to lose are the ones who treat this like printing in the newspaper, like broadcasting on TV.

Bob:            And that’s the stuff that could spook them, right? That’s the stuff that could spook customers, like, wait this isn’t any different. You’re just vomiting on me with your same stuff.

Ben:            It does not take very long to totally ruin a relationship, right? But it takes a very long time to build a good one.

Bob:            Excellent point an good place for us to stop.

Retail Consultants featured are part of the Retailwire Brain Trust Panel

The challenge

A regional chain was being challenged more and more by big box and online sales. The CEO came up to me afterward a speech and asked me, “How can we work with you?”  I asked him to call me. During the conversation, it seemed there was a great spirit of nurturing in the stores, but not much selling.   I’ll let the CEO take it from there…

The situation

“When I saw and heard you speak, it felt like you slapped me out of a dead-lock – and really challenged my thinking. You see, we had become bogged down in survival. And it wasn’t a healthy place to be… Not for me as the leader or my team. I needed someone to help me work on a new direction for my business and help me hear and observe what was going on. I was looking for a shift change in who we were. I had a hunch you could help us with your bluntness and track record.”

The prescription

To get to the true performance issues, we needed to find the root causes. Many of these root causes were buried in the organization’s structure. The “training issues” and interpersonal silos were masking why these problems were showing up time and time again.

We held a meeting with staff and heard things that needed to be changed and updated and looked at – and behaviors that had to stop- namely the discount game of both prices and people.

We wondered if they had the right people in the right jobs and were their personality styles allowing them to play to their strengths? We had every employee take the personality quiz and shared the results with the team while teaching the four personality styles and what their strengths were. “As you stated over and over, “NO MORE KUMBAYaaahhhhhhh. We needed everyone to perform, not survive so performance standards were set with ways to monitor.”

The results

“We aligned our staff into better responsibilities, changed our marketing plan, put together a training program and re-trained 200 employees using your comprehensive sales training program with several training lessons on product knowledge.”  Their customers rewarded their efforts with an 18% increase in sales and lower turnover rates. Several new stores were built and acquired.

“As it rolled out, we experienced a huge culture change with both resistance and excitement at the same time. Yes, some people were let go and some people didn’t want to change and left on their own. But we achieved what we wanted. Within months a new standard was set.”

The lessons for you

• It’s great to have a nurturing environment and you can still sell and be genuine.
• Survival isn’t a place you can grow your business from. Address issues and change the culture.
• Personality styles are very real and helpful to get the right people doing the job they are best suited for.

Have you undergone a culture change as a leader or employee? What one thing would you do again differently? Please comment below.

About Bob Phibbs, the Retail Doctor

Companies from some of the very largest, to some of the smallest, from luxury brands to startups, from franchises to regional chains contact me as a retail consultant because they are looking for results. Their successes are all theirs.

While every client and project is different, the ability to enlist me as a retail consultant who has a fresh set of eyes to look at the challenges you are facing can result in a focused, effective and creative path to profitable sales.  No matter what your size, let’s see how I can help you as a retail consultant that gets results.

This interview features Ben Sprecher from Incentive Targeting and I discussing how location based marketing can be used for a lot of things but if overused by anxious marketers they could spook customers to drop the whole thing.  Here is the video to watch and an edited transcription below.

Bob:            Ben, one of the biggest things that people are talking about is mobile marketing, right?

Ben:            Right.

Bob:            So if I get them to opt-in with their phone number, then I can send them messages when they’re walking by my store or if there’s a sale or something, right?

Ben:            Sure.

Bob:            I think a man’s phone is their castle. I invite you in on the idea that I can control when you talk to me. So the idea that somebody could, as I’m walking by, send me a little, “Hey, come in and get a $3 dollar widget or something,” I think that’s really spammy. I think you have a different opinion.

Ben:            I do, a little bit. First of all, I think that we are at a very important moment right now. We are at the beginning of what I’m trying to call the “great convergence,” the “great mobile convergence,” and there are five key components to that. Conveniently I’ve come up with an acronym called CLAMP.

Bob:            CLAMP?

Ben:            CLAMP. So you’ve got couponing and deals.

Bob:            You know how I feel about that.

Ben:            You’ve got loyalty. You’ve got analytics. You’ve got mobile marketing, and you’ve got payment. If you look around the show floor here, you’ve got companies like PayPal over there, Google over there. There are a number of companies who are looking at this giant convergence of all these different key areas, that have been very separated in the past, onto the mobile platform. The power of that is not simply that you have all these different components in one place. It’s by pulling them together, you can make a much better go of giving the shopper what they want.

Bob:            What do they want? Isn’t it just coupons and deals? Isn’t that what we’re making our smartphones into?

Ben:            The shopper wants relevance, right?

Bob:            So what does that mean to you?

Ben:            It means a couple of things to me. First of all, it means making sure, and for marketers this is a very counter-intuitive statement, but it means saying less. It means communicating less. Up until today, every new marketing vehicle, whether it was direct mail, radio, TV, whatever, has been perceived by marketers as another megaphone to shout at their shoppers.

Bob:            Absolutely. Which is like the guy in high school with all the zits on his face saying, “Look at me. I’m important,” but we don’t care, right? We care about us.

Ben:            We care about us, exactly. Up until today, every marketer has treated it, with some exceptions, as a new vehicle, a new megaphone to talk to their shopper. Now we are starting to have an incredibly powerful computer that is with us all the time, that has incredible capabilities and knows where we are, knows what time it is, and knows who we are.

Bob:            But still you’re programming it to be kind of spammy. I mean you’re saying if somebody’s within 300 feet of my store, then project this message or this image or try to get the rat to the cheese to come into my store, right? It’s not really personalized.

Ben:            It absolutely can be, and that’s the challenge to marketers today, is we all need to pull back and instead of saying, “Oh my God, I’ve got a new little megaphone that somebody’s got with them all the time,”‘ say, “I’ve got an incredibly powerful, incredibly personal way to talk to somebody, and I need to respect that and respect them and use it only for good, never for evil.”

Bob:            But that’s a whole new way to think, isn’t it? It’s like copywriting.

Ben:            It’s completely new.

Bob:            Beginning copywriters are all about “look how great I am, I do this, and I do this, this and this.” Yet we know that no one reads copy like that. They really look at how can he help me solve this problem?

Ben:            That’s exactly what it’s about. So when you have somebody who is walking down the street, if their phone chimes every 12 seconds as they walk by stores, what’s going to happen? They’re going to opt out of that entire thing, right?

Bob:            So one thing could kill the whole deal for them opting in to text messaging.

Ben:            Exactly.

Bob:            It wouldn’t just be that one store.

Ben:            The entire medium is at its infancy right now, and the entire medium has the potential to either tip in potentially the greatest way marketing has gone in human history, to be a little bit grand about it, or to be yet another way that you get crappy, spammy offers from everybody you walk by. What that’s about is saying less. It’s about using the information and the power of that medium to filter instead of to broadcast.

Bob:            That’s a whole different way of thinking, right?

Ben:            It’s completely opposite.

Bob:            That is not in evidence around here, I’m sorry.

Ben:            Well, I think that there are . . .

Bob:            I mean it’s a one size fits all. Just use our platform and you can do what you’ve always done.

Ben:            Say anything you want to, do whatever you want.

Bob:            Right. You can take your Valpak coupon and you can now make that into a Groupon coupon, okay, great. But there’s got to be more to it because that’s the thing that iPad promised, and that’s what got everybody so excited. Like the first time you saw Facetime and it was two people who were deaf, talking. That was a moment. You were taken aback, “I never thought of that.” But that took somebody to really turn it upside down, and I don’t think we’re seeing any good examples in mobile. Have you seen any examples where it has been customized and relevant and interesting, besides the work you probably already do?

Ben:            So to speak in sort of general terms, I’ve seen some of those articulated as “vision direction.” So again, if you look at Google and PayPal as companies who are trying to think many steps ahead here about where exactly is this whole thing going? The story that PayPal is showing at their booth is someone going to a coffee shop, he is being given not just any offer when they get anywhere near a coffee shop, but the phone knows them through loyalty as somebody who likes vanilla lattes, and they know they’re five minutes away on their walk from the coffee shop. So now is the time to tell them, “Get your order in right now. Do you want your normal vanilla latte?” That is something that anybody wants to receive. So, done right, focusing not just on the who, but the where and the when . . .

Bob:            But I go to the next level, even if it’s an execution issue, that’s all great. Ben, you’re 5 minutes out and you want to do it, except there’s already of line of 20 out the door. So your expectation, just go with me, is that when I show up, my drink is now first, and that may not happen.

Ben:            This is where the Retail Doctor comes in, right? This is about where you go and you help the retailers to understand that customer service means a different thing, a little bit, in an era where there are many different ways where your customers are interacting with you.

Bob:            This is a great idea. We’re going to take this up in the second, which is that idea of customer service has a new meaning.

If you haven’t downloaded my special report: Bricks and Mortar Retailing At Risk in the Digital Age, you can still do so here.

My thanks to Marge Laney at Alert Technologies and our cameraman Brian Laney who made this all sound and look great!

So what would it take for you to not allow a company you previously opted in with to sms you?  What creative uses for mobile marketing do you see?

Please add your comments below.

Retail Consultants featured are part of the Retailwire Brain Trust Panel

This interview features Paul Schottmiller from Cisco Systems and I discussing purchase influencers, staffing levels, technology and luxury boutiques. Here is the video to watch and an edited transcription below.

Bob:               Paul, so much of the activity here at the NRF Big Show in New York City is about technology and how we’re going to do all this stuff in the store and we value everyone. But as you and I started talking, we realized where the pedal meets the metal – in the store- it’s a little different. And you had some thoughts on that.

Paul:             Yes, there are a lot of segments in retail where it really appears they’ve sort of given up on the idea of staff in the store to help their customer, and I think that’s creating an opening for technology to come in and potentially play a role. We did a recent survey of 1,000 US consumers and asked them their top three influencers in the buying process, who helped them buy, and only 13% said store associates were one of their top three influencers, whereas 68% said online reviews.

Bob:            From anonymous people. (See the NYT article, “For $2 a Star, an Online Retailer Gets 5-Star Product Reviews“ )

Paul:           From anonymous people.

Bob:            That could have been bought, or from a competitor, but they trust them more.

Paul:           Yes, and there’s a real uptick in that trend.

Bob:             Wow. That’s fascinating.

Paul:

Even friends and family were down 20%, year over year, 60% the year before, 40% this year. Twenty percent said store associates in 2010, down to 13% in the most recent survey we just finished in 2011.

Bob:             So what were the top three?

Paul:           All online related. Online reviews.

Bob:            Online reviews, Facebook, social media, that stuff?

Paul:            Yes, other types of online recommendations and reviews as influencers.

Bob:            And is that different from geography or age?

Paul:           There was some segmentation by age and the things that you would expect.

Bob:            The younger, the more tuned it.

Paul:           Obviously, younger people, but, quite frankly, even in the middle age and up categories, more and more interest and initiative
around using the technology channels.

Bob:            Astonishing. So from my side, of course, I would take that we can grow that 13% if you train your people better.

Paul:            Right.

Bob:            I mean, that’s clear. But on the technology side, you’d say, “Well, if that’s the case, then why would we put any money in our employees?”

Paul:            Well, the question is, “What’s your value proposition to the consumer?” If it is qualified labor in the store, then you really need to make that a focus, and you need to spend the time, the energy, the money, and the talent to develop that. If you don’t, other people will and you’ll be replaced by these technology sources. I believe for a lot of retail, the reason we’re seeing what we’re seeing is that a lot of retailers have given up, and they really don’t have a strong effort towards making that differentiation. It’s different. It’s different at Wal-Mart than it is at Neiman’s or Nordstrom, for sure.

Bob:            Yeah, but the Amazon feature changes everything I think . . .

Paul:            Absolutely.

Bob:            . . . because maybe you were able to get an extra $50 for your item, and now the tuned-in customer is going to say, I can get it on my phone for $50 less. Now you’ve got this, almost violence, against your employee. He has to decide, do we do it or not? It becomes a policy or a service issue, but regardless, that $50 is gone from the system.

Paul:            What we saw was that if they’re absolutely price shopping, very focused on an item, particularly commodity items and price focused, things like technology and that’s very difficult to overcome. You’ve got a level of price transparency as a function of the smartphone and the mobile in the stores. Now if you can catch people earlier in the decision process, in phases we call discovery and inspiration, then if you’re providing them that guided selling, either in person or through some of your online tools, it does somewhat alleviate some of the pricing pressure that we’ll see otherwise when people are simply shopping.

Bob:            Luxury goods are now arriving onto flash sale sites like Gilt. So those products may all look great on Madison Avenue, but when it really gets down to it, luxuries could become commoditized too, right?

Paul:            Sure.

Bob:            So what would your advice be to a luxury retailer, for example? To not become a commodity.

Paul:           First off, you have to look at the digital component of the experience. Ignoring it is absolutely the wrong strategy. You need to look at it and figure out how you’re participating with your customer in that journey, the digital, but also the human interaction pieces, because the human action piece is important in some categories in some segments in some retailers for some customers. And if that’s part of your value proposition, you need to make sure that you’re not kidding yourself in terms of the investment in that area . . .training your employees and paying your employees. If you do, just like if you’ve got a higher price, it’s going to get exposed by the technology very quickly.

Bob:            But even then, if I had an extra person on board for three hours, let’s say, and that cost me an extra $30, isn’t the potential that if they turn just one sale around, they would more than pay for the person?

Paul:            Absolutely.

So what say you? Are some brands kidding themselves that they are staffing sufficiently? Do you trust strangers to verify the trustworthiness of a brand or store? Please enter your thoughts in the comments below.

If you haven’t downloaded my special report: Bricks and Mortar Retailing At Risk in the Digital Age, you can still do so here.

My thanks to Marge Laney at Alert Technologies and our cameraman Brian Laney who made this all sound and look great!

Three reasons to perform a physical inventory:

• Counting your inventory isn’t just for insurance reasons, but a major determiner of your store’s health.
• You can get buy-in from your employees that, once completed, will mean less out-of stocks and having more of the best sellers.
• You are also bound to find items you didn’t know you even had.

I’m sharing a system I’ve used for doing a physical inventory because 95% of retail consists of single store operators who may not see the value in doing one.

That’s because…

Physical inventories can seem daunting – especially if you haven’t done one for awhile or have a larger store. Or expensive if you hire an outside service. But don’t let either of those stop you – you can do a physical inventory on a shoestring budget…

Preparation is the key!

Here’s how to do it and maintain your sanity. If you already have procedures for your shop or other type of business, check to see if you’ve addressed all the points below.

A Week Before

Price it.

• Everything in the store, ideally with category number, price and date/yr.

Organize.

• Everything as much as possible by category.
• Write out an instruction sheet that pertains to your store. For example, what is a unit.

Map it.

• Take an oversize piece of paper and create a map of your store. Sketch out the location of every rack, display, wall, and shelf if necessary. Don’t forget the back room or storage area.
• Beginning at the front and working counter clockwise, walk around and assign each rack, display, shelf a number; each number will represent a different section.
• Number your inventory sheets to correspond to the sections on your map. Your goal is to have lots of sections to make counting easier.
• To speed counting, enter categories (from you POS system) onto the counting sheets with every price in the section listed. If a description could speed counting, enter it prior as well.
• Have plenty of extra blank sheets for sections that have too many price points for one page or missed sections.

Arrange it.

• Try to keep categories or merchandise together; you don’t want a lot of onesies and twosies or it will slow down counting dramatically.

Plan it.

• Decide the date you’ll close early say 5pm. If you’ll close early, put a sign up for customers at least five days in advance. An inventory should take no more than four hours if you have enough help.

Figure it.

• Write up details of how many helpers you’ll need and how you’ll pay them. Teenagers appreciate cash so I always paid out of petty cash having them sign a time card as proof with all their information.
• Call your insurance agent and see if they will cover your liability for a one‐time event.

Recruit counters.

• If you don’t have enough staff, call your local high school counseling center and tell them you want to hire about 15 responsible kids to help with inventory.
• You’ll pay them minimum wage cash and have pizza and sodas. They must call you in advance to confirm.
• Get their name, cell phone and email address. Signup any that call – some won’t show and you’ll be covered.
• Get plenty of pencils with erasers.

Wait.

• Don’t allow yourself to start counting through the day, customer service will suffer.

The Big Night

Feed them.

• Order a couple pizzas to be delivered with soft drinks.

Track them.

• As they arrive, check off their names.

Set the ground rules.

• No horseplay, accuracy is expected, be nice to each other, if you don’t follow rules, you’ll be asked to leave.
• No one will be paid until they have signed their time card and all information filled out.

Buddy ‘em up.

• Pair a person who knows the store with one who doesn’t.

Instruct them.

• Tell them what you are going to be doing.
• Show them how to count; they are to either make tally marks or if practical, count by category and price.
• All prices are at full retail, not sale prices.
• Anything unpriced should be pulled, brought to the counter and counted last.
• Count in pencil.

Show them.

• Count one section as a group to show your process including how to count, hash marks, what the sheet should look like when turned in, etc.
• They should check with you to make sure their first sheet is done correctly.

Help them.

• Before they turn it in, all tally marks should be tallied into one number per line.
• Assign one person the map– usually the manager to be responsible every sheet is counted.
• As sheets are finished they are to put a red check on the map and the inventory sheet
• If practical, the map person can tally up each sheet that night but could wait until the following morning.
• Each sheet should have a total $ at the bottom by category.

Thank them.

• If they did a good job, tell them you will contact them for the next inventory.

The Next Day

Total up all sheets by category.

• Enter your grand total somewhere safe

Once you have these figures, you can easily figure your open-to-buy (how much you can purchase based on what you already have in your store), shrink (the difference between what you thought you had and actually have caused by not checking invoices, sloppy transfers, mis-keyed items and theft,) and plan changes. Without a physical inventory you do not have accurate information.

Oh and if you do inventory matching scans to your POS – make sure you are transferring any shortages out to a dead store like #999 or in from store #999 so you have accurate tracking of the differences.

Even if you use your own employees for inventory, these steps will help it not be a hassle but an organized breeze.

As always if you have questions about temporary workers, age requirements and the like, please consult your local labor board to ensure compliance.

What have you found effective to make counting go smoothly?

Grab a free master inventory sheet you can use right away, just enter a bit of information below.

For more about using your inventory to grow your sales, pick up a copy of my book, The Retail Doctor’s Guide to Growing Your Business (Wiley.)

Target last week made news with a joint letter from their Merchandising Chief and Chief Executive to their vendors.

According to the WSJ, “Target is reaching out to vendors to help craft a more competitive pricing strategy as it seeks to battle rivals and the lower-priced online market.”

In that letter, the retailer says it is not going to let online-only retailers use its stores “as a showroom” for their products. The result is an undercutting of Target’s prices “without making investments, as we do, to proudly display your [the vendors’] brands,” the letter states. The executives say they will be “challenging” the vendors “to work with us to develop an assortment that will allow Target to be competitive and profitable across all channels.”

Bravo Target!

This sends a bold message to online retailers and to the vendors Target has helped make successful. It is an opening salvo against the foregone conclusion that everyone is switching to buying everything either through smartphone apps or online. And against Amazon hijacking their customers.

Target’s partners are bound to accept the request, and Target won’t be the only one putting it out there. It could be as simple as vendors making minor changes in their products so the Target product wouldn’t have any exact match – the model number/bar code simply won’t exist anywhere except on the Target item. Therefore when customers find items at Target, they can’t swipe them with their smartphones to find them cheaper online. This is a step beyond private label – the reason to create these products is not to be necessarily a cheaper alternative to the brand. It is designed to be exclusive.

It would make it easy for Target to say, if you can find a lower price on the exact same item, we’ll match it because the exact same item won’t exist except at Target.

According to the National Retail Federation 95% of all retail operations are single store units.

Smaller merchants need to be able to mimic Target and say you won’t be able to find this product online either.

Look, 92% of merchandise is still purchased in bricks and mortar stores according to CNBC.

Smaller operators need to claim the kind of power Target has in order to thwart the online retailers who are looking to make bricks and mortar stores into showrooms for online products. But as single operators they don’t have much clout.

How to do it?

Most bricks and mortar retailers belong to at least one trade organization or buying group. They should band together and request this from their vendors so that their SKUS don’t match the online-only sites.

Ideally vendors have to be willing to create products that are slightly different and aimed for sales in either big box stores, smaller retailers or online retailers – but not for all.  I’m sure many will be skeptical this could work.

But if bricks and mortar retailers can use their buying power to increase personalization through their instore channel, then they can leverage the advantage they truly need against the showrooming of Main Street.

What do you think? Could this work? Please comment below:

The situation

Aron Lieberman of Rockland Window Fashions purchased a historic home in a prime neighborhood to showcase his products.

After the purchase closed, he learned that conventional signs would not be allowed on the front lawn.

Traffic was slow even though the road in front of his business was one of the most-traveled roads in the town. He wasn’t getting any bump in sales from his location choice.

The goal

Get more customers into the store.

The results

Traffic to his store increased by 50%. And this all happened during the middle of the recession!

Aron has gone on to put this landmark image of the house on all of his emails, invoices – wherever and whenever he can to leverage the visiblitily his status his house enjoys.

Lesson for you

Nancy, one of your best customers, comes into your store to view your new spring shoes.

Your number one salesperson, Bill, works with her to find just the right shoe, just the right style, just the right color.

Just one thing…

When they find the perfect shoe, you are out of Nancy’s size.  Now it used to be OK for Bill to just say, “Sorry,we’re out, but you might try online” leaving  Nancy frustrated and headed home to her computer to try to find it at another store.

But nowadays, as soon as those words, “We don’t have it” exit Bill’s mouth, Nancy, or any other smart shopper, is on their cellphone to Zappo’s or Amazon to check their stock for that perfect shoe.

It’s not because they didn’t want to buy it from you in the first place, it’s because the Internet has made it so easy that unless you step in and offer to get it for them instantly, they can do it on their phones in a flash.

Wouldn’t you rather have Bill quickly add within a nanosecond,  “But I can have it shipped to your home free of charge?”

Of course you would. It saves the customer the frustration, and also gets you the sale.

How do you incent Bill to always add that?

That’s exactly what a visitor to my website asked me yesterday…

She was looking for how to incent her brick and mortar employees to embrace web sales via the iPad.

The more I thought about how to answer her query, the more I realized that retailers in general are trying to figure out how to provide a seamlessly integrated world, a world where customers can buy whenever and wherever they are, but also where store employees feel motivated enough to make the extra effort before their customer whips out their phone and does it themselves.

No, you shouldn’t incent them to use the web because it doesn’t go far enough.

Employees typically get an incentive for doing one thing. If they sell a shoe tree with a pair of shoes, they’ll get an incentive of $5.00 for every tree. That will sell a lot of shoe trees, but it doesn’t encourage your employee to sell anything else.  All the other add-ons are no longer as important.

You with me?

If Bill had an incentive to sell the red Jimmy Choo shoes, he would try to sell that shoe to every customer. Every other shoe would just sit there.

Look, retailers need to be clear about what an employee working on their salesfloor should really be there to do – sell all the merch, not just one type – however they can.

How do you get an employee to do that?

First and foremost they should be people who should want to have the satisfaction of helping people by getting the merchandise out the door. They should be proud of their brand and be able to move seamlessly from web to salesfloor and be paid equally for wherever they make the sale. That will allow them to embrace the web as just another place to find the item and make the sale. Just like a customer.

What to do

Upgrade your sales force to become commission-based or salary plus commission for every sale regardless of how it is entered in the system.

That means you’ll probably have to  upgrade your POS abilities so those commissioned salespeople can seamlessly get credit whether they help your customer in the fitting room, at the cash-wrap desk, or via an iPad instore.

We often think of upgrades for computers, but upgrading your service means upgrading the people who deliver the service – your employees. Commission raises the bar and attracts people who truly understand the game of selling.  They understand they don’t eat if they don’t sell.

True, commission salespeople have a bad reputation (put there more by movies than actual experiences), but without the reward of doing a very good job for every item they sell, your salesfloor is filled with so much beige.

So many apathetic bodies that result in…

So few sales.

Giving your entire organization a multi-channel commission system is the way to get the true rewards you sought with incentives – better customer service and higher sales.

Look here for more on commissioning you retail sales team. 

If you missed the first two installments of this series, start here.