Vision - July/August 2008 - (Page 8)

c4 trends viewpoints on Ce evolution ] • [ by susan sChreiner at least six percent of shoppers because of a lack of trained help. Retailers lose either for the purpose of reorganizing or liquidating a business. Rumors about the sale of Circuit City are swirling (as this article is written). Selling Retailers will need to work harder at driving consumers into their stores, whether it’s brick, click or cross-channel. But the mom and pop values are coming back into play: loyalty, pricing, demographic targeting, cross-channel marketing, the in-store shopping experience and customer service. Retail: What’s the Trend? O Loyalty Some retailers are suffering from self-inflicted wounds. Macy’s is a good example. While it was a revered brand in certain markets, it incurred consumer wrath when it tried to transform itself into a singular national department store chain at the expense of familiar local names with a loyal following, such as Jordan Marsh in New England or Marshall Field’s in Chicago. For more than 150 years, Marshall Field’s defined Chicago as an international city and was more than just a department store and major tourist destination. Someone forgot that people had allegiance to Marshall Field’s and it was not necessarily transferable to Macy’s. Seemingly someone forgot Tip O’Neal’s famous phrase which also applies to retail that “all politics is local.” In contrast to Macy’s approach and current realization of the importance of local, Wal-Mart has worked to build-up neighborhood markets. nce upon a time, we bought our first radio or TV from neighborhood stores. The shopkeeper would know your name and ask about the family. Is there still room for mom and pop shops today? Alas, for the last decade or so, the neighborhood store on Main Street has been largely supplanted by department stores, big box retailers, wholesale clubs and online commerce, and so too has the warm customer relations based on the familiarity of living in a neighborhood. As cross-channel marketing and clicks-to-bricks emerged as yet another alternative to the “live” shopping experience, there has been a further swing toward depersonalization, lack of in-store product knowledge and purchases largely based on price. Today retail may be at another inflexion point. In April 2008, The New York Times carried a piece, “Retailing Chains Caught in a Wave of Bankruptcies.” Today’s retailing reality is that business is not good for many, and for others it’s even worse. In the CE universe, many retailers already have taken a hit—closing stores, laying off staff and otherwise looking to reduce expenses. CompUSA, Harvey Electronics, Tweeter Home Entertainment and Sharper Image found that cut-backs simply weren’t enough and chose bankruptcy, said they were ignored completely by associates. These findings reveal that retailers lose at least six percent of shoppers because of a lack of trained help. In contrast, Apple stores are providing an alternative shopping experience for consumers, and it is evidently successful. Apple is among the fastest growing retailers in the world, according to Retail Forward, an Ohio-based market research firm. Its distinctive style reinforces the company’s brand cachet and pays off handsomely. In 2006, Apple stores posted more than $4,032 in annual revenue per square foot of space. In contrast, that is more than six times the revenue per square foot at Nieman Marcus, four times that of Best Buy, and about 1.5 that at Tiffany’s. According to a Macworld transcript of Apple’s April 2008 financial call, Apple makes a significant investment in educating their salespeople, reporting 580,000 one-hour sales personal training sessions in that quarter. The “wow” of style, merchandising, simplicity and a user-friendly yet knowledgeable approach makes shopping at an Apple store an unusual experience. A wow shopping experience generates four times the word-of-mouth than a problem experience, according to the Wharton survey. Follow the Consumer The way people are shopping is changing. Increasingly, leisure time is precious. Many consumers gravitate toward stores that can pull together a broad range of products and services with convenient and thoughtful merchandising. The more successful stores also have focused on in-store tactics to ease the choice, complexity and communication with shoppers and put a spotlight on customer service. They carry products that are likely to appeal to certain demographics and local consumer preferences. It seems 2008 may be rough sailing for the retail environment. Retailers will need to pay extra attention to the little things that enhance a consumer’s shopping experience to attract customers and to keep them coming back and spending. Maybe mom and pop shops aren’t dinosaurs, after all. Please send your comments to susan@c4trends.com. • www.ce.org Customer Service Salespeople can make or break a sale, and in many cases, they are the single biggest detriment to the shopping experience, resulting in more lost business and negative word of mouth than any other shopping problem. Thirty-three percent of consumers polled for The Retail Consumer Dissatisfaction Survey, conducted by the Wharton School’s Jay H. Baker Retail Initiative, said they have been unable to find a salesperson and 25 percent 8 July/August 2008 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - July/August 2008

Vision - July/August 2008 Contents Shapiro's Spectrum In This Issue The Economist C4 Trends Visionary Embracing Disrupting Technology Vaulting Ahead with Your Brand International Risk Stop Boomerang Products CEA Newsline Tech Speak Tech Policy Going Global Eye on Business Market Insider Just the Stats

Vision - July/August 2008

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