Friday, October 3, 2008

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Get in their heads

by Cinda Baxter on October 3, 2008

in Economy, Retail

A friend of mine doing some reconnaissance work (aka: trolling the big boxes to see what they’re up to) commented about how poorly small retailers seem to be doing when it comes to making the customer feel appreciated. On her visits to discount chains, she’s welcomed with open arms. On visits to independent retailers, however, she gets next to no welcome, and very little warmth. In her words, “They’ve gotten lazy.”

My take? It’s more than lazy employees. More than having the right employees. It’s about fear…theirs.

In a big box or chain, there are several degrees of separation between the CEO and the part timer on Elm Street. Those employees don’t see the bottles of Advil and Pepcid AC lining an owner’s desk. They don’t see concern in the eyes of the person who actually owns the place. They don’t see a personal degree of risk as only one of 127 employees on the 20-hours-per-week schedule.

In an independent retail store, however, there’s typically no degree of separation between the staff and the person whose life teeters on the success-—or failure-—of the business. Employees know there aren’t multi-million dollar accounts spreading cross country to offset one location’s losses. They know the odds they’ll be the one “let go” are pretty high if there are only four others on the schedule. And they know that getting another 20-hour-per-week job in retail is gonna be kind of tough right now.

They’re as scared as you look.

So how do you fix this?

1. Explain to them that yes, this is a nerve wracking time, but that you have a plan. Walk them through the plan assuming they’re smart enough to understand it.

2. Explain how much pain your business can endure. In their eyes, you may be 98% of the way through the “buffer zone,” nearing life support when the reality might be that you’re only 10% of the way into the pool.

3. Explain the reason you’re ordering in smaller batches and not loading up on show specials (assuming you’re following my advice here and here) is because it strengthens the store’s cash flow. Your ability to be proactive is what protects the store from financial risk.

4. Explain the reasoning behind any other overt change in the way you operate the business right now. What employees interpret as crash-n-burn damage control might actually be a brainstorm you came up with six months ago.

You need to get that deer in the headlights expression off their faces so they’re more likely to look customers in the eye, smile, and welcome them to your store with sincerity. They need to engage with the customer, not cower from them, and make everyone feel welcome.

They need to behave as though they can breathe rather than be constantly holding their breath.

You comfort them. They comfort your customers. That’s what we retail types call a win/win.

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Did I call it, or did I call it?

by Cinda Baxter on October 3, 2008

in Economy, Independent Retailers

In browsing through some of the old RetailSpeaks newsletters, I ran across my column in the January issue. Somehow, it seems more timely than ever…especially when you hit the part about Washington Mutual:

Let’s face it-—what shakes the economy shakes our stores. Many of us felt aftershocks from the mortgage crisis jiggle our registers; next up appears to be a wave of shakes from the very thing we love to see-—our customers’ credit cards.

Notoriously the last to admit risk, banking officials have been not-so-quietly whispering warnings of potential disaster in 2008. According to Newsweek, Citigroup has earmarked $2.24 billion to cover credit card defaults this year; Capital One, Bank of America, and Washington Mutual are each bracing for a 20% uptick in losses; and AmEx-—long seen as the home of financial sound credit card holders-—is boosting its default coverage reserves by a whopping 44%.

…I’d be the last to suggest anyone should be buying as if we were still in the cash-rich days of the late ‘90s (oh, to be there again!). But I do firmly believe the fastest way to store failure is to circle the wagons, hide the checkbook, and stop looking for new product….

Concepts like “open to buy” and “turns” have never been more critically important to independent retailers than they are today. It’s not enough to remember how last spring’s sales went; that was last spring.

In the end, and regardless of how the quarter played out, independents need to remember that looking behind never bodes well for what’s ahead. We have the ability to spin on a dime, allowing us far more flexibility than the big boxes, and can can tailor our product mix to the customers we know will keep shopping.

…Remember that this roller coaster ride we call “retail” has wonderful peaks as well as sometimes scary valleys.

Read that bold faced type part again. And again. Now’s the time to get smart, folks. Now’s the time to plan your budget, then stick to it. Now’s the time to switch from big, whale-sized orders intended to carry the entire quarter to a series of smaller re-orders that can be placed as cash flow supports them. Now’s the time to pay that credit card down as fast as you can. Now’s the time to reassure your employees that things are under control so they don’t scare off your clientele with deer-caught-in-the-headlights expressions on their faces.

And now’s the time to smile at your customers, no matter how hard it might be…after all, they can’t see your knees shaking when you stand behind the counter. You have to remember, the image they receive is the word of mouth they’ll take away.

Hang in there. You can do this. Believe it.

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