Retailing, the business of selling goods and/or services directly to those who use them, is a $60 billion a year industry in Australia, but too often it’s run like a kid’s lemonade stand.
Despite the development of a couple of centuries of media-driven marketing, and more recently the advent of on-line retail, the very basics of what it takes to succeed in retailing have not changed in thousands of years and yet, if we are to gauge by the experiences of the shopping public – their customers – those basics are most commonly ignored!
A recent exit survey of 3,000 Australian retail customers found that the 40% of respondents who said they were given satisfactory service, when asked to explain what they meant by that rating said, “You know, they weren’t rude or anything.”
Through poor selection processes, poor training, low standards and poor practices the shopping public’s expectations have been sufficiently lowered that they are grateful if they are not abused!
Research by a Central Queensland University team found that “it is statistically unlikely that the person serving you is naturally good at it.” Based on their research only three in 10 people possess the “intrinsic personal characteristics” of being good customer service providers. Of the remainder the lead researcher said that, “they simply shouldn’t be let loose on the public!”
So what does it take to get it right in retailing? And what is on offer if you do?
Apple & Retailing
They have invested massively in their commitment to develop the world’s best retail experience. For example, in 2015 they hired in Angela Ahrendts the former CEO of Burberry (one of the world’s most exclusive brands) lead their store and on-line retail customer experience strategy.
Ahrendts cost Apple an US$80 million first year package but, fortunately for both parties – and for Apple customers – that investment, on top of decades committed to ‘getting retail right’, now returns Apple the world’s highest per-square-foot-per-year retail profit of $4,551, and counting!
So, what are the basics? And, are we doing them?
Each of the following items is important – essential, really – but each is presented here in approximately descending order of their importance relative to each other.
You might ask yourself why each has been assigned its priority in this list. There will be a number of reasons and your insights into those may hold as much value for you as the ideas shared here:
Focus first on your own people. If they are not innate people-pleasers, improve their mindset or move them out. Oh, and make sure you are leading by example, have their back covered, and have created an environment in which they feel valued and can thrive.
Then focus them on their people (your customers). Give them the mental, emotional and material resources to treat their customers extraordinarily well. Treating your own people superbly provides them with a model which they can apply in turn to treating your customers to the same level.
An ordinary product wrapped in extraordinary service will beat an extraordinary product wrapped in ordinary service nearly every time – but an extraordinary product wrapped in extraordinary service will always be unbeatable.
What have you done to ensure that the products you offer are imbued with extraordinariness?
If position, position, position is the maxim for real estate, then traffic, traffic, traffic is it for retail.
Whether your ‘place’ is bricks-&-mortar, clicks alone, or clicks-&-bricks, traffic is the goal, and place – whether No 1 on High Street, or No 1 on Google, or No 1 in the minds of your target market – is a prerequisite.
Quality-control every aspect of people, process and product presentation.
Retail is detail, and your customers will notice, appreciate and rave about whatever they sense to be an extraordinary attention to detail.
Consistently extraordinary service does not ‘just happen’ (read the opening research extracts!) It can only be the product of continuously evolving systems, skills and commitment to their development.
Designing systems that enable your people to consistently exceed the expectations created by your marketing will reduce your costs, boost morale, and generate free word-of-mouth publicity.
Marketing can be defined as ‘gaining favourable attention by promising people a desired experience with your product, your people and your enterprise’.
Promises raise expectations; make sure you have the people and processes in place to consistently exceed them.
Promotion is about gaining space in the minds and hearts of your target market, your Ideal Customer.
Promotion goes beyond marketing, it involves continually enriching the product and service experience you create, consistently polishing reputation, progressively developing relationships, continually deepening loyalty, actively encouraging advocacy, and always seeking referrals.
Price is what you ask, but value is what you give, and your focus must be on continually increasing the perceived and actual value of the products you offer, while managing costs and preserving or extending your margins.
Customers seldom want a cheaper price; they are usually seeking greater value. Henry Ford continually reduced his costs on the T Model Ford. While from 1908 the product remained unchanged for 10 years, its price progressively dropped from $995 (78 weeks’ wages) to $295 (10 weeks’ wages) to deliver an 8-fold increase in value. Ford drove his price reductions through cost reductions, maintained his margins, and became the richest man in the world in the process.
Customers buy from people they know, like and trust – and that goes double for people who know, like and trust them (the customer).
Winning a customer is hard and sometimes expensive. Keeping them is relatively inexpensive (sometimes it’s simply a case of not doing anything wrong!) Getting to know them – in an era of social media, big data, instant communications and pervasive smart phones – requires an investment of resources but that investment is dwarfed by the value of the prize. Make the investment – and thecommitment to drive it.
Sometimes ‘no’ just means ‘No, not now’ or ‘I don’t know enough to decide in favour of your offer’.
Retail is about always being there; about always having the products; about always tempting people with offers relevant to them; about learning, refining, retrying – until they buy or die!
We could have made this one ‘Patience’ but that implies ‘just waiting’. Persistence is about trying new things until you find what works, and then making that better and better until there is no competition.
OK, so it doesn’t alliterate, but it does start with P so stick with us:
There is an old Korean saying that goes, “Man who does not smile should not open shop.”
Everything of any consequence begins with mindset, and so that smile must begin on the inside, driven by:
- gratitude for having something you perceive as being of value to others, and for having the opportunity to tempt them to experience it;
- anticipation of the satisfaction of others when they experience that value; and
- a passion for presentation (retail is detail, and detail is easy if you are passionate about it, but a drudge if you cynical about it).
Your Retail Philosophy
To understand yourself and thus make yourself understandable to others, develop your own ‘Retail Philosophy’.
That will consist of at least:
You might start by looking at those of some of the most successful retailers today, and then think deeply on your own. Once you get – deeply – why your retail enterprise exists, and can articulate that to others, then your people will get it and more importantly, your potential customers will get it, too.
A simply yet compelling single statement in ‘what’s in it for me’ language that instantly explains the products and services you offer and why people should be buying those from you.
Your Values give your people the guidance they need to quickly and intuitively make right decisions about how to delight your customers. Rules create reasons for your people to say ‘no’ to your customers. Give them Values to live by instead, and then skill and empower them to use their best judgement in delivering on those at all times.
Then set some goals to go after!
Challenging goals when accepted result in superior performance. Superior to what? Superior to what would have been the case without them! Simple.
So, make sure you are negotiating stretch goals with every one of your people and that they are focused on achieving or exceeding those every day.
Remember, your sole value as a leader is the total value of the increase in performance that others deliver as a result of being led by you.
There. Not so hard after all!
 This is one of Nordstrom’s rules. Nordstrom’s have become synonymous with ‘giving customers the most compelling shopping experience possible’ (their Commitment) through extraordinary service and they achieve that merely by telling their people to, “Use your best judgement about how to achieve that at all times.”