Are brick and mortar stores a dying breed?
Circuit City, Blockbuster, Border’s, Filene’s and the Sharper Image are only a few of the better known retailers that have closed their doors in recent years. The full list is ominous. Check out this Wikipedia listing if you’re up for a big shock. (http://en.wikipedia.org/wiki/List_of_defunct_department_stores_of_the_United_States) Sure, you can blame it on the natural evolution of things. Or stronger competition. Or the growth of internet shopping. Or constant price battles that force weaker players to fold up their tents. But, really, it’s more complex than that. Do you really care whether your office supplies come from Office Depot, OfficeMax or Staples? Does it matter if your light bulbs come from Home Depot, Lowe’s or Ace Hardware? What difference does it make if you buy your next TV from Best Buy or HHGregg? What’s relevant is that many of today’s retailers are turning a blind eye to the retail disasters or yesterday. They have forgotten how to differentiate themselves. They have become commodities. No, brick and mortar stores aren’t going to die as a relevant shopping channel. But as smartphones become a ubiquitous shopping tool and the internet offers a myriad of place to find it cheaper, customer loyalty will become more and more difficult to achieve. The question that ever retailer should be asking themselves is where to take a stand. Is offering the greatest customer service, like Nordstrom, an answer? Is it making the shopping experience a form of entertainment, like Apple stores, a way to go? Is providing the highest quality products, like Whole Foods, an option? Maybe it’s instigating the perception that being a generic brand is to offer unbeatable value, as Costco has done with its Kirkland brand. Whatever it might be, remaining a relevant retailer means digging deep to find a unique point of difference.
Spend this holiday season with Hilbert’s paradox of the Grand Hotel (and other tales of the precious customer)
19th century German mathematician David Hilbert described the concept of infinity this way: first, you must picture a hotel so vast, so overwhelming that it has an infinite number of guest rooms. This hotel is not only large, it is also full, with every guest room occupied. One evening, a sojourner enters the lobby, seeking a room in this hotel with absolutely no vacancy. Despite being sold out, the traveler gets a room, since the hotel is not limited by any finite number of accommodations. So the guest in room 1 is moved to room 2, the guest in room 2 is moved to room 3, and so forth, ad infinitum. The newcomer is put into room 1. The hotel can repeat this procedure any number of times whenever new clients happen to show up. Would that this were so for retailers—a steady line of customers snaking out the door, waiting to come in, every section packed, every aisle occupied, a hub of activity 24/7/365, one shopper after another after another with no end in sight. While this isn’t real, we’ve often observed sales associates who believe that customers are an endless resource. Like it’s no big deal if they don’t sell customer 1, because a customer 2 will be right behind. There’s always one more and one more after that. Take this incident at Best Buy, in which an employee told a customer, without checking, that a hard drive was out of stock. When he ordered the same item online for in-store pickup, less than an hour later, it was miraculously available. Or this customer service fiasco at Men’s Wearhouse, in which a saleswoman insulted a customer with lines like “I don’t know why you’re here,” and “I can’t help you now.” Even in the best of times, it’s foolish not ...
