What do successful retail stores have in common? What makes them successful and better than the competition? What makes some stores do better in good or bad times while the industries fall behind? The answers could depend on who one asks and what one seeks. Some good answers can be found by studying success. A common misunderstanding have always existed that good or bad ideas result in turn in the course of business. This may be true in some general circumstances but is not the best formula for finding ways to turn an average or declining business around. What has proven to work is the close study of examples of success. The world of business is built on entities that are successful in their activities and one approach to maintain and improve industries has been by studying why and how some are effective compared to the rest. These success examples are our best chance for finding good answers to the earlier questions.
Unique stores are always a few steps above and ahead of the competition. Consumers are interested in retail stores that offer products that are unique and different from average. This characteristic goes beyond the product and service. The atmosphere and the decor of the store can have a similar effect. And the sales staff are no different. Every single element that makes a store stand out will attract customers and bring them back. It goes without saying that as one store can change and become unique the competition will follow. A retail store can be unique for a limited time and need to change to revitalize the uniqueness. Window displays and the position of the products are some of the most common changes seen in retail to attract the consumers. Many more elements exist that can also change and evolve to continue to attract consumers.
One of the lessons I learned in retail management was the importance of experimenting with different ideas for marketing products. I am surprised how many retail managers have a hard time grasping the concept that no marketing idea is automatically successful and needs to be calibrated until brings reasonable results. This is most often true in chain stores that have centralized marketing. The following of the company program will not always bring good results or the best results (if any). The marketing programs are made with many factors in mind and when they are implemented, the reality of the situations adds to the complexity. The people on the retail floor are the ones who have first-hand knowledge of what really works or not in their stores. They and the manager of the store have the opportunity to experiment with the marketing programs. The program may be created on location or have come from outside but in either case will work well and best if the program is adjusted for the location and the specific customers. This is not an automatic process. It requires experimentation and observation. If the results are successful, the numbers will show. If the plan is not doing its best, experimenting is one basic approach to deal with the ineffectiveness. The fundamental concept remains the same that all retail managers must be able and willing to experiment with marketing ideas whether they came up with the marketing plan or someone else. The marketing plans do not bring results simply by implementation. They need fine tuning by experimenting.
I am astonished at the number of the retail staff and managers who do not understand what a customer is. A retail business will most likely have a location. This location has a great deal to do with the amount of business and people universal understand location means business. Location brings business because of the relation of the customers to that location. This is a very basic idea. What really matters is to understand what a retail business is and why it exists. A concept is what the business is about. A store comes to existence because the creators believed that location can provide a product or a group of products or services that people from outside are willing to pay for. This exchange of product and service for payment creates a retail business. The business side is well-understood but the other half is equally and if not more important. The customers who are the people on the outside that will pay for the products or services of this location see what the retail store offers very differently than the people in the store. How the customer sees and perceives the products and services has a good deal to do with how, when, why and what they buy. The group of customers outside who see what this place offers are something they want to pay for are the market for this location. The entire population around the store or with access are not the market. The actual market are the few people who are willing to interact with the store by paying for something. The store is designed to match this select population. The target market are everything and the store needs to adapt itself to what they want and see. The majority of retail operators do not understand this concept. If this target customer group prefers to shop in the morning, the store must be able to handle them. If they prefer certain items, they have to be carried and so on. The critical factor is to remember the design of the retail store must match the target market. This matching becomes the concept of that store. The majority of people who work in retail have no clue what a retail concept is and its origin or benefits. They just think some stores are made big and some small. Some staff wear suits and some casual. Some items are more expensive than others. Everything is known by retail staff and managers in terms of incidents of questions or purchases by the customers. They are generally unable to see these exchanges as a whole and how they fit the concept of the retail business. They fail to be part of the concept of the store and join the customers in this exchange. They see business as a process of transactions taking place upon the customer visit. They misunderstand the retail store as a place that opens and closes on certain hours with people arriving and leaving. They fail to see the whole transaction outside of the store. The products and services leaving the store become part of the life of that consumer and have a detailed story of how they fit in. The consumer arrives or returns for the benefits of the product outside in one’s life or business. The crew of retail stores understand very little of the concept besides the little taking place within their working hours. They probably do more harm in many situations by not being part of the concept. The best way to understand the concept and become part of the retail concept is by being a successful and avid consumer oneself. It is important to shop one’s and other similar stores regularly and use the products and services as consumers do. It is impossible to be part of the concept. The retail store will never become a great business until the consumers and the store personnel are all part of the concept.
The basics of retail and customer service are probably the most important factors to consider besides the appearance and the organization of the store. The target consumer is not just anyone who is within the proximity of the store. The target consumer is a person who has very specific things in mind and a visit to the store can provide the consumer with some product or service that fit those specific things. The retail staff do not know what may or may not work and have to find this out. They must be qualified and able to undertake this task. They also must be willing to actually approach and work with the customer within the specific situation to be helpful. The blend of this consumer and retail staff experience is perceived as customer service. The topic is bigger and less flexible than commonly perceived. Good customer service requires much training and experience. Everything that relates to the retail store and its concept is 100% included in the customer service though the staff fail to understand this unless they play customer. Only a person who 100% understand the concept by being both staff and customer (100% of both) can provide genuine customer service. That is one reason why stores that focus on a smaller group of products and services can provide better customer service. The range of customer experiences is more limited and the staff can be effective consumers themselves without too incredible an effort. Customer service is a very bad label for what it is meant to represent. The concept is mis-taught because people assume they know what something means if they have a basic definition. The definition most retail staff have for ‘customer service’ is too rudimentary and may apply at a gas station by being nice and efficient but is ineffective for true retail experience. A great store succeeds by the staff and the consumer being part of the retail concept. Customer service is the experience of the customer by getting involved by the store and its products or services. There is hardly a definite beginning and end to the experience. Being nice and polite ruins the business.
Retail has one characteristic that is common with many other businesses. The management of a retail store has a great deal to do with the state of the business. One metaphor for understanding the retail business is a ship and its captain. Imagine a ship sails on January 1st from port A and arrives the last day of December at port B where its cargo is offloaded and sold. This is the story of a retail store. The fiscal year begins sometime and ends on that day the next year. If the ship is well and everything works well, the ship is able to bypass port B and land at port C which is farther. The same cargo that sold at port B will sell much higher at port C. This is the challenge of retail experience. If things are done well, the business can have much higher sales by end of the fiscal year. We call this higher sales, sales increase, higher profits or whatever. The fact remains the ship operates as an independent vessel with limited connection to anywhere and other vessels. The crew and the ship sail. If things work well internally and externally, the ship can land at port B or port C. A good captain can reach port B or he is not a captain and needs to be replaced. A great captain can reach port C and is worth the best compensation. The retail store operates much like this ship. The crew work under the command of the captain. The ship may have an owner and even if the owner is on board, that person is bypassed for the best interest of the business. Only the captain knows how to operate throughout the journey. Once they are on land, things change but at sea only the captain counts. If you consider what it takes for this person to be a good captain or great captain and what it takes for the crew and the ship to match the trip, you can see what makes the difference of port B and port C. Every single detail you can think of that relates to this journey is significant. The person who processes all the details in real time, as they happen, or from experience is the captain. He makes the decisions that will make or break the ship. Only a genuine captain can do the job or no ship arrives at port B by December deadline. Retail is very much the same. The staff can be hired and trained. They can be managed and operations can be efficient. If everything goes great including the external factors such as economy (the weather) and competition (other ships sailing), the retail store may make its fiscal goals by end of the year. If things go great, it will go beyond the goals. A good manager can reach the year’s goals regardless of the economy, the competition and the internal state of the retail store. They are good because they can deliver. A great manager can surpass the year’s goals in very bad economy, with fierce competition and poor internal state of the business. That is what makes them great. The great manager will process all the little details of what is going on (much like what the great captain did at sea) and make DECISIONS that may or may not look like the average or bad manager’s decisions but result in surpassing the year’s goals. The good or great manager is able to carry the staff, the store and the consumers with him or her through the year without them or anything internal or external getting in the way or keeping him or her. He or she is the spirit of the business because he or she can understand the concept, which is everything we talked about, so well that he or she just leads away and everything goes with him or her. Everything just goes and everyone follows as if hypnotized. Why does this happen? The concept has to be in place and the staff and the consumers hopefully match the concept. That is the minimum requirement. The ship must exist and the crew and the buyers at port B or C must be good for the trip’s worth. They are hopefully good matches and if they are not, the good or great captain or manager will deal with the little or big problems that will come up by making good or great decisions. Experience with the concept (the trip) has a great deal to do with the quality of decisions. One good thing about retail or restaurant business in America is the universal acknowledgment that the manager makes the business. A good manager will result in a good year. A great manager results in a great year. The state of the economy, the competition and the little or big problems will not defeat this person. The basics of the business must be there and the man anger must be genuinely qualified and experienced to make the good or great decisions. And, the ownership (person, persons or company) must understand the captain carries the business and not them. The qualified person must be allowed to lead on one’s own. A robot manager will result in a business that is affected by everything external and internal whether good or bad. Most chain retail businesses believe in robots. They fail to understand what good or great is. They lead the ships by remote from their headquarters and have a trophy manager just in case or to take the blame. That is a typical American retail story.
This case study is not pre-planned and the following segments will be organized as best fit to analyze. Since I have a good deal of experience as a retail manager and have worked with this company before I should be able to provide insights beyond ordinary retail experiences and activities about our un-named retail electronic store. I will do my best to review what may appear in the near future dealing with the retail electronic store or other retail or restaurant business I may have access to. Since all of the analysis are within the general perspective explained above, they will appear in a chronological order following this introduction regardless of which business the analysis is about. Each case study entry should serve as a standalone case study but also fit within our general perspective. The retail analysis applies to retail food and beverage stores also. Most successful restaurants and restaurant chains in America have used data and information from the American retail industry to build successful enterprises. The retail analysis will relate to those in restaurant, bar, food and wine business very closely.