STORES Magazine - June 2008 - (Page 74)

CONSIDER THIS / LOEB RETAIL LETTER Copyright 2008 by Loeb Associates Inc. Used by permission. The Art of Transparency BY WALTER LOEB Speaking at a financial analysts meeting in April, JCPenney chairman Mike Ullman said that he did not want to make a projection of earnings for the current year, only one quarter at a time. He was not sure how the hostile economic environment was going to affect his company’s earnings or how it will affect the industry in general. I thought that he was being very honest in his comments to analysts: He wanted his thinking to be as transparent as possible and have everyone draw their own conclusions. Other retailers (like Coach) have followed Ullman’s lead and declined to make projections for the current year. I think that there is no point in posting estimates when the environment is so uncertain that one can not provide Walter F. Loeb is a New Yorkthe good guidance that folbased consultant and member lowers of the company have of the NRF board of directors come to expect. As a result, I whose newsletter is published think that it is likely that there monthly in STORES. will be a wide range of estimates based on various scenarios that analysts may be painting for the economy in general. Transparency has become a watchword for the retail industry. Not only must financial information be honest, but product information has to become more effective in order for consumers to make the right purchasing decisions. Associates — whether wearing the blue shirts at Best Buy or the orange aprons at Home Depot — can and do help — when they are free. In my experience, however, it is rare that personnel are available for consultation (my recent attempt to purchase an HDTV became a real struggle since I was not sure about the pros and cons of the various formats – plasma, LCD and DLP). Knowledgeable associates who share their information generate trust in themselves, their company and the products they are selling Info must be available Often, retailers rely strictly on point-of-sale price tags to tell a product’s story, yet the few data points that are displayed usually do not answer all the questions a consumer might have. In order to develop greater consumer trust, there must be ample information available for them to make a decision – be it for a camera, a computer or a washing machine. The consumer’s demand for information is often complex and in need of amplification. In many cases, the salesperson is unavailable and the consumer is left to her own devices. Unless she has read Consumer Reports or some other guide, there is little information available in a selfservice environment. 74 STORES / JUNE 2008 Create value and trust Deloitte and Touche’s Pat Conroy states that retailers create value and trust by increasing responsiveness to customers — improving the ability to sense needs, interpret requirements, frame responses and learn from outcomes. It ranges from interpreting weather conditions to change in the mix of goods shipments to adapting to changing market conditions. In order to compete, retailers must be responsive to changing consumer dynamics and involve customers in creating value. While stores must have a consistent price strategy in all classifications, an awareness of the competition may make a product more or less desirable. Transparency has to start at the top, but every associate must understand the power of an open door and access to information. Knowledgeable associates who share their information generate trust in themselves, their company and the products they are selling. WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - June 2008

STORES Magazine - June 2008
Executive Editor's Page
President's Page
Tesco Tests Carbon Labels
What Shoppers Think
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Cover Story: Boom - or Bust
Green Retailing
Online Marketing
Building Traffic
Water Management
Digital Marketing
Loyalty Programs
Special Report: Taking on Teens
Supply Chain - Robo Crop
Human Resources
Supply Chain - Directory Assistance
Loeb Retail Letter
ARTS Update
Point of View
NRF News
Retail Crossword
Retail Industry Calendar
Last Laugh

STORES Magazine - June 2008