STORES Magazine - May 2008 - (Page 12)

CONSIDER THIS / PRESIDENT’S PAGE Unconventional Wisdom BY TRACY MULLIN The Voice of Retail Worldwide STORES is published by NRF Enterprises Inc., a subsidiary of National Retail Federation Inc., 325 7th St. NW, Washington, D.C. 20004. (202) 783-7971 FAX (202) 737-2849 t last count, there were about 5,000 books on the market on how to run a business. Anything you would want to know is likely in one of these guides, which offer tips on everything from starting a company to hiring the right staff to investing in new technologies. After hearing Patrick Byrne, the CEO of Overstock.com, speak at Shop.org’s Online Marketing Workshop last month, I have a new appreciation for those who are willing to set business books aside on occasion and use their gut instinct to lead. Many of the decisions Byrne has made as the head of Overstock.com have hardly been what one would call conventional. The company’s advertising is still run by a woman he hired through a temporary staffing agency years ago. He doesn’t believe in measuring people on productivity but, instead, on quality of work product. And Byrne has made a name for himself on Wall Street for his no-nonsense approach to investors. Unlike many executives, Byrne is refreshingly candid. When asked about the “Google Effect” on e-commerce, he admitted that Overstock.com had not leveraged natural search to its fullest extent in the past, which he called “really stupid.” Acknowledging that he was hesitant at first to invest in new technology, Byrne confessed that he then tried to make improvements too quickly, which led to shrinking revenues. And he declared that his keynote presentation was mostly about how he “screwed up Overstock.com and customers fixed it.” Indeed, it hasn’t all been rosy. When company revenue began to nosedive earlier this decade, Byrne said the company was suffering because it had abandoned its commitment to the customer. After addressing technological and inventory issues, the company rededicated itself to service in January 2006 by making a conscious effort to shift focus away from the product and toward the customer. Today, the customer service department is given the authority to take merchandise off the website if it receives too many calls that the product is defective or is not what was promised. Overstock.com also has a unit specifically tasked with customer response that has access to the warehouse so that it can quickly determine why and how problems are occurring. After all, Byrne says, “customer care knows where the bodies are buried” in every company, and giving them control can alleviate problems more quickly than waiting for another department to act. The company’s rededication to customers seems to be working. Earlier this year, Overstock.com was ranked fourth for customer service, according to an NRF Foundation/American Express survey. Sales and profits have begun to climb handsomely, and shopper satisfaction is at an all-time high. While Byrne’s approach is a bit avant-garde, some of what makes a great leader is having the courage to defy conventional wisdom. If we had to read thousands of books to take our cues, we’d never have time to actually do anything. A CHAIRMAN OF THE BOARD Myron E. Ullman, III, Chairman, President and CEO, J.C. Penney Co. VICE CHAIRMEN Philip L. Francis, Chairman and CEO, PetSmart, Inc. Stephen I. Sadove, Chairman of the Board and CEO, Saks Inc. PRESIDENT & CEO Tracy Mullin SENIOR VICE PRESIDENTS Mallory B. Duncan, General Counsel David Hogan, CIO Karen Theibert Knobloch, Member Services Carleen C. Kohut, Finance & CFO Steven J. Pfister, Government Relations NRF Divisions Association for Retail Technology Standards EXECUTIVE DIRECTOR Richard E. Mader (202) 626-8140 National Council of Chain Restaurants PRESIDENT John R. (Jack) Whipple (202) 626-8183 FAX: (202) 626-8185 Retail Advertising & Marketing Association EXECUTIVE DIRECTOR Mike Gatti (202) 626-8117 FAX: (202) 737-2849 EXECUTIVE DIRECTOR Scott Silverman (202) 626-8192 FAX: (202) 626-8191 325 7th Street, NW Suite 1100 Washington, D.C. 20004 All articles published in this magazine represent solely the individual opinions of the writers, and not necessarily those of the National Retail Federation. 12 STORES / MAY 2008 WWW.STORES.ORG http://Overstock.com http://Shop.org http://Overstock.com http://Overstock.com http://Overstock.com http://Overstock.com http://Overstock.com http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - May 2008

Stores - May 2008 Contents Executive Editor's Page President's Page Contrasting C-Level Compensation Across Segments What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Cover Story: Concepts That Clicked Concept2Watch Kiosks Artificial Intelligence Tech Support Online LPinformation Data Synchronization Human Resources Site Selection POS Selection Communications Biometrics Networking Systems Credit Loeb Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - May 2008

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