Sometimes you step back and think, who thought this was a good idea. I received my monthly cable bill yesterday which includes my internet, phones and cable TV. The bill reflected a $50 increase or about 20 %. My cable provider has an office about a mile away so I stopped by while out on a few errands. The clerk referred by billing questions to the supervisor on duty who immediately determine the cause of the increase. My plan has a 20% bundle discount which expires June 1st. every year. Without hesitation he immediately renewed by bundle discount for another year and then cautioned me to avoid this happening again by marking my calendar with a reminder to stop by the store next year by the end of May to renew the discount. He then added that it would be shame for me to lose the discount since I’ve been a loyal customer for over twenty years. This is when the fun started since in my business as a retail consultant I’m always discussing ways for retailers to maintain their loyal customers.
This is basically the conversation that followed: “So you acknowledge that I am a loyal customer and my monthly bill is over $300 a month. Why is the burden on me to remind you that my bundle discount needs to be renewed every year? Cable companies are losing customers who have alternative services especially for movies and TV programming.” His response was “Why would we just automatically renew the discount without customer asking for it? That would be foolish on our part.”I received a call later in the day from customer service supervisor as a follow up. She was aware of my conversation at the local store and expressed her gratitude for my business and being a loyal customer. She also was happy they were able to maintain my discount but next year I should get to the store sooner to renew it, since there policy is to allow only a one week grace period from the expiration date. They turned the whole process upside down. In essence what they saying, “Even though you’re a loyal customer we require you to contact us annually and tell you want to remain a loyal customer”. Interesting concept! Here’s my takeaway, review any policies, procedures or processes you have than are barriers to customer’s maintaining a relationship with your store and remove then immediately. Every interaction with a customer either enhances or diminishes the relationship. Think about it!
1. Technology that lags behind their expectations
2. Restrictive return policies, especially “All sales are final”
3. Gift cards that expire
4. Inability to return on line purchases in the store
5. Excessive communication by email, text or social media that has no substance or value proposition
6. Constant out of stocks of key or promoted items
7. Slow or cumbersome checkouts
8. Inadequate store signage
9. Not being recognized as a good –valued customer
10. Not being responsive in resolving problems or issues
1. Happy employees are the linchpin for creating loyal customers
2. It’s essential you know who your best customers are and treat them as your best customers
3. All customers are not created equal but they all count
4. Having the right inventory at the right time and at the right price is a key to a retailer’s success
5. If you’re ignoring millenials your putting your growth in jeopardy
6. The cost of retaining an existing customer is 3x-5x cheaper then acquiring a new customer
7. 75% of customers when surveyed said they spent more in stores that provide good service
8. Upgrade your technology to embrace the digital customer who shops 24/7 – if you’re not communication with them digitally your competition is.
9. Love the business you’re in but don’t fall in love with your processes and procedures. Evaluate, change and adapt.
10. Retailer ware too many hats to be good at everything. Focus on what you’re good at and delegate the rest
Despite the downward trend of gases prices why haven’t we seen a commiserate increase in retail sales? The most recent report on retail sales indicates a weakening of the retail sector. Analysts have offered a myriad of opinions on why retail sales are soft. These are a few of the most common reasons given:
– Under employment: People have taken lower paying jobs
– Obama care: The implementation of Obama care has caused a dramatic spike in insurance costs
– Savings: There has been a significant increase saving rate in this country.
– Student debt: Millenials are important factor in retail sales and they are burdened with substantial student loans.
It’s fair to say that all of these have some effect on retail sales but here a few other factors that should be considered.
– Gas prices: Gasoline sales are part of the retail sales numbers. Obviously when gas prices decline their contribution to the retail sales number declines
– Before the economic crisis retail sales experienced double digit increases as did the expansion of retail outlets. People were using the equity in their homes to finance the spending spree. The recession and ultimate collapse of the housing market brought this growth trend to an abrupt end.
– The hangover effect: After the “Great Depression” it took nearly a decade for consumer confidence to rebound and people to resume their old spending habits. We are seeing the same process happening now during the slow recovery from “The Great Recession”. Consumers are in fact saving more and being more cautious which is only natural after a financial crisis. Maybe one the lessons is that retailers should take a careful approach to opening new stores as can be attested to by the recent announcements of store closures.
There’s always a rush to judgment to provide quick analysis to economic numbers, which usually tend to be an over simplification. Consumer confidence is a main driver of retail sales and that’s always tricky to predict. Retailers should be less concerned about what pundits are saying and listen to their customers. That’s where you’ll get the “unvarnished truth”.
1. Every system can be hacked your goal is to mitigate your risk
2. Your connection to the internet is your more vulnerable access point
3. Keep your firewalls and antivirus software updated.
4. Make a list of all third party vendors that have access to your customer data (outside marketing companies, vendors etc.).
5. Evaluate how your e-commerce site processes credit card transactions. Card not present transactions specifically e-commerce and phone orders are out of scope for PCI compliance. The merchant is responsible for fraud that occurs in these “card not present transactions”
6. Becoming EMV complaint is not mandated at this point but retailers not only bear the liability for fraudulent transitions if they are not complaint but customers fell their data is more secure with stores that can process chip based credit cards.
7. As more merchants come online with the new chip enabled credit card devices more fraudulent activity will migrate to e-commerce “card not present transactions”.
8. Passwords should be reset monthly- a minimum of fifteen characters- use numbers, upper and lower case and symbols
9. Meet regularly with your staff to review data security issues and best practices to keep data safe.
10. Monitor and enforce your internal data security policies
I attend the National Retail Federation Show in New York City for the thirtieth time two weeks ago. The show is a must for anyone like me who is involved in retail technology. This is the “toy store” of retail systems and technology. The main focus of the show is tier one and two retail segments, ranging from Wal-Mart to large regional chains. There are however some vendors that cater to the independent retail segment, but it’s also of value to understand the technologies the big guys are considering since many of these technologies will come down stream in the near future. It’s also a reality that some of the technology being showcased will never be implemented by retailers. This year there were more pragmatic solutions and some that were introduced a few years ago and have been refined.
Here are my key 10 takeaways from the show.
1. The store of the future is now
2. Retailers can no longer function with disconnected systems
3. Omni-channel is now: The reality is consumers want control of their buying experience, “buy it anywhere at any time”.
4. To meet the challenges of omni –channel sales retailers need the tools to intelligently re-allocate merchandise. The right merchandise at the right location and the right time is the challenge to meeting omni-channel expectations.
5. Millennials trust their social network more than traditional advertising
6. If you want to keep customers loyal to your brand you must keep them engaged and motivated
7. Millennials have little tolerance for retailers who lag behind in technology
8. Just because a customer is in your store doesn’t mean he or she isn’t buy the product somewhere else
9. It’s the age of the educated workforce. Store personnel must be armed with the same technology that consumers have at their fingertips.
10. In store marketing driven by Beacon technology is gaining traction as consumers become comfortable with allowing retailers to communicate with their mobile devices when shopping in their store.
I was recently interviewed by Justin Guinn, retail market researcher at Software Advice, a Gartner company. Our conversation focused on the many issues small retailers face when deciding how to select and implement a new POS system. Given two-thirds of single-store retailers don’t have a POS system in place, I think this is a highly-relevant topic. The problem is that so many small retailers simply don’t know how to choose and implement the best POS system for their stores, especially now with the new credit card compliancy requirements (EMV).
During our conversation, Justin and I touched on some tips for successful POS implementation. You can see a summary of those below, or view Software Advice’s full checklist.
Get Staff From the Start of the Selection Process:
The point I stressed the most in our conversation is that all too often retailers don’t realize successful implementations start long before any software is being considered. Rather than focus on POS system capabilities, business owners have to first understand the common pain points and inefficiencies their staff is facing. Only with this information in mind can any features and capabilities of a POS system have an impact.
A great benefit of these insightful conversations with your staff is that you can organize the information into a ‘needs document’ that you can then share with POS vendors. This needs document will enable you to quickly weed out ineligible vendors who don’t offer all the capabilities you and your team require.
Get Your Staff to Practice Using the System:
Obviously, no matter how great your system and its capabilities are, it means nothing if your employees don’t know how to properly leverage it. That’s why I also stressed how important it is to train your staff on the new system. Again, the needs document is a great reference point, this time for determining which functions and capabilities the corresponding employees need to build an understanding around.
The training should directly align with the various goals that have prompted you to adopt the new POS system in the first place. With that in mind, a great idea or fail-safe rather, is to have a point person on your staff who is the expert on all things regarding your POS. This employee would be in charge of training new staff on the system and would also be a go-between for your team and your POS vendor’s account rep.
Keep System Security Top of Mind From the Beginning:
Another area that I place a lot of importance on is with system security. Credit card information and customer profiles and purchase histories are of utmost importance in today’s POS market. And the recent EMV compliance deadline has added another layer of required security measures that business owners must take or potentially face severe negative financial consequences.
Aside from system compliance, one of the most significant types of loss in retail spaces is with employee theft. Though it may seem insignificant if an employee discounts their friend’s blouse or comps a meal for their family, these actions add up over time. Proper safeguard should be in place to alert you and enable you to audit sales at an employee level to hold them accountable for any wrongdoings.
By following these best practices and the rest I discussed with Software Advice, you essentially have a pos implementation guide with all the information you need to properly adopt your new POS system. If you still need help choosing the best system for your business, Software Advice can help you narrow your options down with a free consultation call. And if you require further assistance, I’m always here to help consult you on your journey.
In a recent article Retail Drive published a list from industry experts listing 11 predictions for 2016. One in particular from Steve Barr caught attention:
Forget about the transaction, it’s about the interaction!
Steve Barr, Retail and Consumer sector leader, PwC: Creating a unique customer experience will continue go a long way toward building loyalty in 2016. Shoppers, especially millennials, are craving experiences from brands. For retailers, it will no longer be about having large amounts of inventory on hand. The store will evolve from a hub of products into a distinctive experience that helps the consumer be more connected to the brand and its values.
About two weeks ago Jordan’s Furniture opened a new store in New Haven Connecticut. To characterize this as a retail furniture store would be a gross understand statement. They have taken the concept of creating a unique customer experience to new level. Inside the store is a sixty foot high adventure ropes course, a pizza shop where you can customize your pizza with 180 choices of toppings and an ice cream shop. They’ve created a retail environment where mom, dad and the kids can go for a “shopping experience”. While mom shops for furniture the rest of the family can try the rope adventure. When their done they can all enjoy their custom pizza and ice cream. The obvious goal is to attract the whole family, create a destination experience and increase the amount of time each potential spends in the store. There is a direct correlation between the time spent in a store and increased spending.
There have been many articles written recently about the demise of the traditional department stores. All retailers need to step back and see how they can create a unique shopping experience in their stores. It’s certainly worth the effort to explore how you can meet the expectations of the millennials. Have a meeting with your key employees to discuss any and all suggestions on creating events that engage customers. I plan to visit Jordan’s in the next few weeks to get a first hand perspective.
This is an example of an simple event to engage customers that utilizes both in store and on line marketing.
Announcing the 2016 H&T Peak Pics Contest!!!
Hickory & Tweed is taking our storied “Wall of Fame” online this season! Just like the countless photos of loyal Tweeder’s lining our shop’s walls – we want to feature the best shots from the H&T community in our online “Peak Pics” series!
Send us your best photo from the slopes this season – and we’ll share it on our Facebook page. Whether it’s a family shot from the lift, or a summit selfie – we want to see the best ya got!
The weekly pic with the most “likes” at the end of the season will win a H&T Threads Prize Pack!!!
Tis the season of make or break for many retailers. The consequences of a poor Christmas selling season for many independent retailers is dramatic since for some Christmas represents up to 30% of their annual sales. Early indications are that on-lines will again experience at 15% or higher year over year growth while stores sales will solid but not spectacular at somewhere between 3% and 4% over last year. When you factor in the effect of lower energy prices giving the consumer more expendable income the increase is not impressive. Some of the reasons are a shorter selling season this year, the mild weather that most of the county is experiencing and the obvious effect of-line shopping. These factors are out of the control of the independent retailer; however there are factors you can control. At the end of the season dig deep into your sales results not just top line sales. Compare the following year over year:
These numbers are a good starting point to gain insight into this season’s results and for making adjustments to your business recognizing the new reality of retail. The new reality is being driven by the online and mobile centric consumer. This consumer uses the web not only for shopping but for researching product. Contrary to popular belief they still enjoy many of the advantages of shopping in stores but they want the following: A fast and efficient shopping experience, liberal return policies and clerks you have good product knowledge. So let’s examine how these numbers help us gain insight:
Average number of transactions: Traffic counter tell us how many people came into the stores but transactions tell us the conversion rate.
Average sale per transaction: Is this number increasing, flat or decreasing. This is a good indication of your clerk’s ability to suggest add on items.
Number of items per transactions: This number follows the logic of the average transaction in that it is not only an indicator of clerk performance but also an indicator of how you merchandise to promote add on and complimentary sales. The simple example is placing the Salsa next to the Chips.
Gross Margin: This is a more complicated number to analyze because of the many factors that influence seasonal sales. A mild winter will certainly affect the sales of scarves and hats when last year winter came early and hard. How this is still and key indicator of performance that has to be scrutinized not only against last year but this year’s plan. Think about what a two per-cent increase in gross margin means to your bottom line.
Sales by department: Depending on your inventory hierarchy you can go deeper into sub-departments to get a more accurate picture. Again there is a weather related factor in these numbers but they also provide insight into trends. Carhartt noticed a younger consumer was buying durable work wear in their stores. The first indication was a spike in the sales of certain categories which upon more in-depth analysis showed certain product categories were becoming “street hip”. This is an obvious example but there are trends happening within your merchandise hierarchy that are precursors to where they market may be going.
Gift Cards: These are the gift that keeps on giving for retailers. There low cost, they don’t go out fashion, they bring in new customers, they boost post Christmas sales, they are over redeemed by between 10% and 20% per-cent and about 8% of the value of gift cards never gets redeemed. If you’re not displaying gift cards prominently and promoting them you missing a tremendous opportunity.
The plight of the independent retail is real. There will be winners and losers but the survivors will thrive and grow. The data is there to help you make the adjustments necessary to be a survivor. Use it or lose it!