This week, U.S. retailers across the nation have headed into the most dreaded month of the year, for their industry. January is “peak season for bankruptcy filings,” based on data compiled by Bloomberg Intelligence, dating as far back as 1981.
With Kmart and Sears announcing the closure of 103 stores nationwide, and Toys R’ Us hiring liquidation advisers in an attempt to downsize and save their struggling business, it’s clear that no one is safe from the chopping block.
This morning, as I walked into an empty home improvement store, I started thinking about these once-giant businesses, the evolution of brick-and-mortar stores, and the struggle to keep shoppers from going online. To me, the solutions are simple:
- Focus on the customer experience.It’s common knowledge that customer service is dead in the brick-and-mortar shopping experience. Whether it comes from a lack of staff training from the employer, or unmotivated and underpaid employees simply not caring enough, every single store in the world struggles in their service department.It’s time for you, Mr. or Ms. Retail Store Owner, to take charge of your customer experience, and give your staff a motivational kick in the rear. Reemphasize the importance of customer appreciation, and motivate your staff with a pay-for-performance compensation plan.
From now on, when your customers ask for the location of a product, your employees will guide them to its exact location on the shelf, not just give an aisle number. If a customer is uncertain about a product’s features, your employees will possess the necessary knowledge, and experience, to be able to answer their questions and give further recommendations to meet their needs.
By initiating a pay-for-performance plan in your organization, employees will have a monetary reason to increase sales, drive repeat business, and further generate a positive brand image for the business. There is no greater motivator than money.
I once spoke with the district manager of an automotive retail business, who used to tell his staff to “Give away the keys to the store, if it will make the customer happy.” This over-exaggeration of customer service emphasized his laser focus on providing extraordinary service his customers, and it reflected positively in their quarterly reports. It works for them. It will work for you.
- Price-match your online competitors.Best Buy is a shining example of a brick-and-mortar retailer who is tackling their online competitors with a “We won’t be beat on price” guarantee. This successful tactic has kept price-conscious customers coming back into their stores, by promising matched-pricing to their online competitors, first hand experiences of trying products in person, and having the convenience of bringing the purchased products home that same day.Online retail stores can offer lower prices, but they will never offer the experience of a showroom floor. Even if it means losing a percentage of profit on your inventory, price matching your online competition is well worth the investment.
- Educate your customers.As the owner of your retail business, it’s imperative that you not only make your customers feel valued, but that they also know the benefits of shopping with you. Make sure they are aware of your price-match guarantees, upcoming promotions and sales, and that your business has a well-trained staff who is there to answer their questions.
Education of your customers starts with educating and training your employees (A poster on the wall won’t cut it). Make sure your team understands these benefits of shopping in your store, and that they know the importance of communicating these benefits to your customers.
As many brick-and-mortar shops continue to slowly bleed out and die under the foot of their online competitors, the only ones who will survive will be those who have focused on their customer experience. It’s up to you, the owner of your retail business, to make these necessary, customer focused changes.
If you have questions about improving your retail business, feel free to reach out to me @MoscaSmallBiz. I’d love to hear from you.