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The Party's Over! Some Tough Love For Small Business & Retailers
WARNING: This hub is somewhat harsh and possibly a downer for many independent retailers, depending on how you view the obstacles and opportunities in front of you!
Blaming the economy, or the internet, or the big boy’s, will not get your business anywhere! So let’s boost our resolve to be better.
Anyone who has been in retailing for years prior to the recession, may have been in La-La Land. The fact is, in the past, we’ve all benefited from:
- Inflated home values.
- Credit cards for everyone – even the cat!
- Ultra-low interest rates.
Together they added up to spark completely fantastic and unsustainable levels of consumer spending. Even after corporate America began to cut back back and downsize, the housing boom, low interest rates on refinances and credit cards seem to create a mirage for consumers that the good times go on and on! Think about all those home refinances that were promoted so consumers could get more money out of their home to spend. So what did consumers do? They kept on spending as if the party would never end!
Retailers loved it! New stores were added, and new concepts were launched, and meanwhile the internet and e-commerce grew exponentially. While the U.S. economy grew 5% a year from 1996 to 2006, the retail sector grew at a level of about 12%. Revenues rose sharply. Profits ballooned. As Dan Kennedy (well known marketing guru) says, “The fish were leaping out of the water into the boat.”
Now, the party's over! It was great while it lasted! I think many of us thought we were pretty good retailers during those years? Maybe we all did. Well, many of us were wrong! Meanwhile, the internet retailers continued to multiply and grow and now we are left too many mediocre retailers chasing too few dollars! Now, even the best of us will have to work harder to earn:
- Every sale,
- Every store visit,
- Every website click,
- Every response from every marketing effort.
- And Every email address.
We have to earn it even more so than ever, and we've got to step it up substantially by being:
- Better organized,
- More friendly and personable,
- More interesting (if not downright entertaining!),
- More service-driven (not just service-oriented),
- More knowledgeable about what we sell.
- More passionate about our product category.
- And More tuned into our target customer and our niche!
- Better at appealing to as many of the human senses as possible.
. . . .and that’s just for starters.
Some Tough Love For Retailers!
You Can't Continue As You've Always Done!
Depending on your store, your strengths and the areas where you struggle, you’ll have to decide where to start and how to keep improving in virtually every area over time. Ask yourself honestly, if some retail training, or fresh retail ideas are in order. If you want to see continued increasing sales and profits, do you really think you can continue to do as you've always done? Will you need to re-evaluate your customer service? Is good enough, really good enough? Is customer satisfaction enough? My answer is NO!
The New Reality of Retailing
We all want to hold on to at least our current customer base, but we also want to build that base. To do that, it is no longer enough to have a convenient location or even the best variety of merchandise in a given category. Having the cheapest merchandise was never a good strategy. Clean and uncluttered is great, but it's not enough, as well. The bottom line, is that ordinary is no longer worthy of surviving (or especially building your sales). Even customer satisfaction is not going to be enough. Customer satisfaction is the lowest and most basic form of customer service. You'll have to do better than this. There are enough places out there to go and be entertained, educated and impressed with much more than so/so service. The world is less and less tolerant of just one more mediocre retailer. The penalty for mediocre is a slow death – by a thousand or more disinterested or indifferent customer walk-by’s!
Some Retailers Have Been Living On Borrowed Time!
I believe a whole lot of retailers have been, and still are living on borrowed time!. They may be open and available, but they’re too much like the same "me-too" store down the street. Just being open and available is no longer a recipe for success, and without adjustments, it may become a recipe for disaster!
The fact is, the market “was” artificially great, and it really needed a serious cleansing of all of the poor and mediocre retailers out there. Well, that cleansing has been happening since 2008 and still is!
If your store is one of the lucky ones that survived, congratulations. But if you’ve been basically going through the motions, operating a me-too, irrelevant store, delivering ordinary service, I still think your days may be numbered. Even J.C. Penney and the great granddaddy "Sears" have been feeling the heat!
Two Extremes Of Retailing
Open Up Your Mind: There Is Hope!
Hopefully, reading this is a first step towards making up your mind that this next year will be a whole new ballgame. Some of you may have read my book, (A Line Out The Door) and hopefully some are visiting my website at RetailRichez. So, I'm hoping that you’re looking for ways to get off autopilot and make the changes that will put you in the winners’ column. Complacency is a killer and so is blaming the economy, the government and the internet retailers. The large majority of retailers I visit today seem to be blaming everyone else for their troubles! While there is nothing you can do about these other problems, there is plenty you can do about your own store. If you can take some steps towards refining your niche, stepping up your service, and separating yourself from the competition, I congratulate you on your first important step towards success, in what I would call, a whole new ball game!
What is Boring Costing Your Store?
Think about it! The world and the marketplace reward innovation, entertainment, economy, quality and great service. Apple proves that! The world is also crying out for uniqueness. What are you doing to make your store different or special? Whether you are a retailer or a small business of any kind, ask yourself daily, “What is boring, or basically being the same as my competition, really costing me?” I guarantee all independent retailers (whom I love), that there is a lot you can be doing that isn’t being done. The good news is it can be done and is being done everyday by many first rate independent and national retailers.
Which are you closer to?
Good News: I Believe Brick n' Mortar Retailing Is Here To Stay
Retailing for brick n' mortar stores is not a thing of the past. It may be more competitive, and you will definitely need to improve your game, as traditional retailers are rapidly changing the way they have done almost everything. But, I am convinced they will continue to be viable and popular with consumers for the foreseeable future. Why am I so convinced? Because, prophets of the demise of brick and mortar retailing have lost sight of one thing. Customers will always prefer holding, handling, smelling, touching and feeling what they are about to buy, compared to looking at it on a color screen. Nothing beats reality, and many customers would rather have it now, as opposed to waiting for delivery. It’s as simple as realizing that we would all rather be with our friends in person, than to see and talk to them on a computer monitor. Believe it or not, there are still successful retailers running impressive sales gains out there and some of them even have “A Line Out The Door”(the title of my book) !
Be The Best In Your Niche
As I point out in my book, "A Line Out The Door", there is an overabundance of everything, including mediocre to poor retailers. There have been too many automobile manufacturers, too many mediocre pizza parlors, too many bookstores, gift shops, tanning booths and just too many “me-too” stores. I’m in stores from San Diego to Washington DC regularly and I’m generally amazed at the complacency and poor customer service around this country, in all too many retailers. . . and I'm not just pointing out the small retailers!
There is a GIANT gap between what they believe we are delivering in the way of customer service and the reality of it all to our customers!
Your success from here, on will require a focus on catering to a specific group of customers in a fairly well defined niche. That means knowing customers better, knowing your products better, and knowing your mission and purpose for existing in this world. And the answer to your purpose should NOT be, that you want to make a living or to get rich. Deciding you want to be a florist, because you’ve always liked plants or that you love scrapbooking and will open a scrapbooking store is not even remotely in the galaxy of having a valid reason to exist. Think about it. In the beginning, what was the purpose in opening your store? What did you think you could do better than the competition down the street or across town?
Your success from here on out, will also require an "over-the-top" commitment to customer service, and a memorable and positive experience as often as possible for the customer. Do it, or lose it (the store that is)!
Why Should Customers Beat A Path To Your Door?
You need a profound reason to exist. It’s your unique selling proposition. Many of you will tell me that you’ve heard this before. However, too many of you out there still do not seem to have an obvious USP (unique selling proposition). Just why is it that everyone should beat a path to your store over any other competitor? When or if, you come up with a good answer to that question, you’re on your way to the golden goose! A part of you answer will probably be that you need to do it better, faster, or give your customer a special or memorable experience that makes a real emotional connection, and makes your place, THE place to go!
Again, having a passion for scrapbooking, flowers, ice cream or woman’s fashion accessories is not enough to be a retailer. It certainly helps, but you need a passion to excel and a passion to succeed and do it better. It makes no difference what the e-tailers, Walmart or even the poor economy throws at you, because excuses and blame just don’t pay the bills. Remember, the business world and the marketplace owe you nothing. The government may owe you some stability, predictability and some more understanding in the way of regulations (don’t get me started), but the hard sad fact is, that "you" will have to save "you". No one else will!
"Let’s make up our mind today that there is no point or reason for you, or anyone else to go into business, and deal with the stress, take the financial risk, pay for high rent, put up with the challenges from your own people and the public, just to open up another mediocre store!"
©2012 Retail Redefined and RetailRichez