It makes for very sad reading when I see yet another report of a retail business going into administration. Just recently Rhodes and Beckett and Herringbone have joined this notorious list. They follow hard on the heels of Marcs, David Lawrence, and Allphones, who have ended up in the same boat and I assume more casualties will play out as the year progresses.
It’s particularly sad for the staff who end up having to look for another job, sad for the owners as well of course. So why is this happening and why is it occurring more often?
We can blame lots of things – online sales, overseas big retailers taking market share away, falling behind on trends and a number of other reasons. My take on this is pretty simple, providing retailers have the right product that customers want to buy and merchandised well, then it’s down to the instore experience that will determine if the customer buys or not.
I have talked a number of times about the importance of the instore experience and the absolute lack of this in most retail stores. Now I’m not saying that this one thing would have saved these retailers, however, it’s a key factor. How well the sales staff perform has a direct correlation on how much and how often customers buy.
This has been roundly supported recently from two quite separate sources. Matt Newell, executive strategy director at retail strategy firm, The General Store was quoted in a very recent Inside Retail article “I think there’s a big opportunity for retailers with physical stores to drastically improve their instore experience. The internet can’t be beaten on commodity style purchases but online retailers can’t match the immersiveness of physical retail. Retailers with stores should play to that advantage as hard as possible.” Wow, Matt, I absolutely agree. Here’s the opportunity to smash online retailers and your competition by providing that unique instore experience.
Furthermore, Daniel McMahon, head of ThoughtWorks Retail Asia Pacific, had similar sentiments after attending the NRF Big Show held in New York, mid-January. The NRF 3 day event is attended by over 33,000 attendees, with over 3300 retailers (87 of the top 100 retailers) visiting the expo. David who has attended many events commented “Having attended the NRF Big Show for many years now, the thing that always strikes me about these conferences – is how much technology is pushed by solution providers as the path to retailing nirvana.
In reality, at worst it is a shortcut to rolling out undifferentiated business process and at best it is an extraordinary amplifier for a brand promise built on differentiated product and experience. What a wide range of potential outcomes. Technology doesn’t replace merchant skill – and it is great merchants, customer advocates, disciplined execution, and capital allocation that create great and lasting retail businesses.”
David went on to offer the following advice for Australian retailers “the biggest trend I can offer you out of NRF is to take a look at your best people – and challenge whether you are enabling them to focus their time and energy in being great merchants for your customers. Or are out of date tools, processes, data or technology stopping them from driving product and offer differentiation.”
So if you don’t want to become one of the next statistics, I would strongly suggest having a look at what happens at the frontline in your stores and answer these questions:
- Are my staff providing the best possible experience for every precious customer?
- Are they able to stop tasks to attend to customers straight away?
- Are they supporting in-store merchandising and promotional initiatives?
- Are your store managers leading by example and coaching their team to be the best they can be?
If the answer is no to any or all of these questions it’s critical that you do something about it, before it’s too late.
Roger Simpson – CEO, The Retail Solution and Author of “The Retail Solution” With over 35 years’ industry experience, Roger Simpson is recognized as Australia’s #1 Authority on customer ROI in the retail industry and as a global expert on staff coaching, customer service, and selling skills.