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13 reasons why retailers are failing

If you ever needed an example of why retailers are in trouble, let me give you one. Better still, I’ll give you 13.

All 13 stem from a recent real life example – one that hopefully demonstrates that outrageous rents, high staffing costs and online competition may not be the only challenges confronting retail businesses today.

A word of warning though, if you're easily offended stop reading.

This story demonstrates how shopping has changed and how consumers like me, have also changed and why we no longer accept second-rate service. 

The story starts with a friend emailing me a link for a new iPad accessory being sold by an online retailer. 

Message #1 – word-of-mouth advertising and customer referrals continue to influence buying decisions, but in the digital age, they are much easier to access and to share with a much wider (and wiser) audience.

I clicked on the link and thought, “Wow, what a nice little product. At $50 it isn’t expensive and I might ask others in the office if they are interested too.” 

Message #2 – one customer can become many. 

I then looked at the website’s ecommerce section and saw that it was easy to use. I emailed the link around the office and four other people said they wanted the item, too. I told them I would order five. 

Message #3 – consumers often don’t know what they want until they see it.

The next day I had a dentist appointment in Glenferrie Road, Hawthorn, in Melbourne. I only mention that because it’s a high-profile shopping “High Street” and integral to the story. My dentist is always late. And I mean always. Not only do I call her surgery before I leave the office to check for delays, I usually arrive at the revised time and ask again, and most times there’s still a wait.

[Question to self: Why do you still use this dentist? Oh yeah, she’s a great dentist!] 

Message #4 – quality workmanship is still valued.

So, instead of waiting in the surgery, I usually go to a cafe or visit the small computer store across the road. And on this day I thought I’d see if the store sold the same iPad accessory or something similar. I would have happily paid the same price, or a little more for the convenience of “I want it now”. 

Message #5 – some people still like shopping at a physical store. 

I entered the store and I found one staff member serving a woman at the front counter and another staff member sitting at a desk towards the back of the store, presumably working on his computer.

I walked to the iPad accessories and could see a whole range of things, so I thought it best to seek help. The woman had moved away from the counter so I approached the staff member and asked if he could help me and he said that he was still serving the customer.

Message #6 – he told me what he was doing rather than how he could help, like calling for another staff member. 

I walked back to the accessory area and looked again. Nearby, the man at the desk didn’t even look up, not even when I moved closer to him. I wondered whether he was working or updating his Facebook status. 

I moved even closer to attract his attention and get a reaction. He quickly looked up and went back to whatever he was doing, which was, clearly, far more important than dealing with a customer. 

Message #7 – if staff are on the shop floor their first priority should be the customer regardless of other work. The admin work can wait but the customer should not.

I went back to the counter and stood there for a moment and it was clear the woman’s transaction was still going to take a while. The salesman looked up, and then continued with the sale even though his customer was away from the counter looking at other things. 

Message #8 – good sales staff can do two things at once, if they choose, especially when trained to do so. 

I looked around, there was no one else in the store so I walked out the door, momentarily looking back to see what the man at the desk was doing. He was still “working hard” on his computer. 

Now, as they say, here’s the rub; both staff members had no idea that I was ready to buy there and then. Both had no idea whether I was going to spend $50, $500 or $5,000. They could not know because they didn’t even speak to me. 

Worse, being the type of consumer I am, if they didn’t have the exact accessory that I saw online, they might have been able to convert (up-sell) me to something different that might have even been a little more expensive. Not only am I a "want it now" consumer, in this case I wanted five!

Message #9 – not all customers are looking for a bargain. 

So it was with some irony that the next day I read a newspaper report on how Myer’s new strategies are going to revolutionise retailing. Get this: “The second change is that Bernie Brookes (Myer CEO) has discovered that if Myer invests in more staff on the shop floor, customers are happier and buy far more goods.”

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The article in The Australian added, “Customer satisfaction ratings jump.”

Now, normally on reading such drivel I would say, “No shit Sherlock”, but I realised that the logic that more staff will mean more sales is just plain incorrect. My experience the day before showed that even on a one-to-one staff to customer ratio, I left a store unhappy. 

Message #10 – conventional wisdom is often wrong!

Worse, not only did the computer store fail to sell me something on this day (I have purchased at that store before) it has now lost me as a customer forever. 

Message #11 – staff can be valuable or detrimental to a business. 

Sadly, adding more staff is not the answer. I mean, when it comes to huge department stores like Bernie Brookes’ Myer or others like Target and Kmart, it is true that some staff on the shop floor would be a good starting point! 

That is, all too often in department store sales staff are actually non-existent, which was the real point of Brookes’ comment. 

However, you can have all the staff in the world but if they aren’t customer-focused or trained well then it won’t help sales, as my example demonstrates. I believe the larger issue these days is that many sales staff are simply not doing their job. 

I am constantly astounded these days by how many sales staff are using their smartphones instead of serving customers. Most don’t even look up from their phones to acknowledge your presence, let alone serve you!

The worst example was when I was recently overseas and I visited a huge shopping centre. I was the only customer in a store and there were four staff, three were busy on their phones and one female staff member was using a laptop computer. It seemed unusual because it didn’t look like the store’s computer and she was sitting on boxes away from the sales counter.

None of the three staff on their phones acknowledged me so I walked over to the young woman thinking she may have been the only one working but, of course, she was on Facebook!

Now, I could give her the benefit of the doubt and say that she might be the company’s Social Media Manager, but as many of you know, I’m a skeptic! 

I have dozens of other examples like this where retail staff are focused on their personal phone, Facebook and Twitter rather than the customer. Most of it happens when managers are not around. 

Message #12 – it’s not the number of staff you have, it’s the quality.

Hey, no it’s not, that message is wrong. Let me correct it!

Message #12 – it’s not the number of staff you have, it’s how you manage them. 

If you allow staff to manage your shop floor the way they want, let them endlessly answer emails and text friends when they should be serving customers, pay them while they’re using Facebook and let them watch customers walk out the door, you’ll go broke. 

The staff in the computer store effectively sent me online, to their competitor! And they lost me as a future customer. Both may have been working, but one was working on the wrong things. The customer didn’t come first. 

Messages #13 – outrageous rents, high staffing costs and competing with online retailers are all important challenges for retailers today. But, dare I say, the greater challenge I believe is to manage your staff to focus on the customer every minute of every day of every week. Achieve that and the other challenges become less important and might even disappear.

I promised you 13 messages but in today’s business environment it’s a good idea to "value add". Marketing 101 says always under-promise and over-deliver, so here’s an extra message ... for free! 

Message #14 - Customers used to have no option other than to put up with ill-trained staff, bad customer service and poor management, but the internet fixed that. Customers have become less tolerant of the way stores are managed, and they simply walk. As I did!

Footnote: Just so that you don't think I have a bad case of sour grapes because I was ignored while shopping, it's ironic that a recent newspaper report highlights the impending demise of the very same High Street shopping strip I spoke of. Ironic, eh?

_____

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ABOUT THE AUTHOR
Coleby Nicholson • Managing Editor

Managing Editor • Jeweller Magazine


Coleby Nicholson is publisher and managing editor of Jeweller magazine. He has covered the jewellery industry for more than a decade and specialises in business-to-business aspects of the industry.






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Sunday, 26 May, 2019 09:10pm
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