When execs come to visit the store: what’s real and what’s typical?
Parents’ Day at summer camp is usually a kid’s first lesson in the art of spin, optics, presentation, veneer and varnish. This is the day the food is better, cabins are swept, and everyone’s smiling. As soon as the last car leaves, the gussied-up, rustic Eden reverts to its usual repose as juvenile hellhole. It’s still shocking how many times we’re in the field on store visits with retail executives and hear how great this particular location is—only to see later the abyss that it truly is when we’re reviewing video that’s been captured with “mom and dad” not around. When a regional manager happens to be in the store, customers are magically lavished with help and praise and good cheer. There’s a bustle about the store, with purposeful professionals doing the Lord’s work of selling and stocking and just being busy and fussy. Products are laser-lined on every shelf. It’s all quite—what’s the word?—lovely. Until it isn’t. Which is usually the next day. We see lots of non-sales winning behaviors as soon as stores return to “normal.” The customer greetings are weaker, contact interactions on the floor are less effective, and products look sloppier. Rote recitation often takes hold, where associates go through the motions. It’s no wonder when we’ve asked retail executives how much time they believe their associates are in direct contact with customers, giving assistance, the answer is sometimes in excess of 40 percent—a belief the staff is spending almost half its time attending to the needs of the shopper. This is their experience, and may well be what’s occurring when they’re in the field observing. But when we show them the day-in and day-out reality—sometimes at 12% or less—it’s an eye-opening experience. Kind of like sneaking a peek at camp the day after Parents’ Day.
Engaging with the Customer
“Can I help you?” “Doing okay over here?” “How’s everything?” We’ve all been on the shopper’s end of these low-value contact questions in stores, restaurants and whatever chain retailer trains its associates with the blunt instrument of “engage the customer.” It’s gotten to the point where such expressions are so empty, they’ve become little more than verbal tics on the part of employees—rote recitations they almost cease to be conscious of even asking. And there’s a perfect synchronicity to this, since customers are barely conscious of these low-impact greetings, either. In our work with retailers, we hear this literally thousands of times. As an example, associates are typically trained and expected by management to greet the entering customer. Too often, this requirement gets translated by employees into saying “hi.” From a courtesy standpoint, this may sound better than no acknowledgment at all, though we’ve yet to see a higher buy or conversion rate when comparing customers who get a “hi” to those who enter with the absence of any greeting. Not surprisingly, most customers don’t even acknowledge this greeting and walk right beyond the associate saying it—not even saying “hi” back. That’s a big bowl of nothing for a key component of a customer engagement initiative. “Doing okay over here?” is another low-percentage expression, a perfect invitation for the customer to say yes, fine, just looking. Once we diagnose how interactions like this are working or aren’t withvideo and audio behavioral analytics, we provide retailers with the approach to make contacts count more—not in a theoretical, one-off way, but with a selling model that can be scaled. Today’s Wall Street Journal has an interesting article on how retailers are pushing enhanced sales tactics to drive top-line growth. The realization to bring about more sophisticated training is sinking in, which comes from the realization these chains have a way ...
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 ...
Reports of Sear’s Death Slightly Exaggerated (for Now)
Not many people are seeing the softer side of Sears these days, or the harder side for that matter. Tech Ticker reports that Jeff Matthews of hedge fund RAM Partners says the much anticipated Sears turnaround story may never happen because Sears Holding Corp. Chairman Edward Lampert doesn’t know how to run retail. Barron’s recently ran a storypointing out Sears’ many problems -- sagging sales, shabby stores, inattentive service, uncompetitive pricing – and suggesting the company’s stock price could fall another 50%. Beyond frightening. Credit Suisse analyst Gary Balter wrote an earnings note titled, “Put A Fork In It.” Are the naysayers right? Is Sears done? Sears has certainly gotten close to the max in cutting costs – there have been reports of only one sales associate per floor. In a world with where national big box stores provide competitively priced appliances on the one hand, and local dealers lavish personal attention and customer service on the other, Sears needs to be competitive on some dimension to survive, since there’s no net over the abyss of the middle. Sears could focus on a smart reinvention its stores. The company still has some fabulously reputable brands, like Kenmore, DieHard, Craftsman, and Land’s End. Sears has actually made a number of good decisions lately – a plan to start selling toys and to offer a Christmas Club card, where consumers add value beforehand and get a 3% bonus on the funds. This has some old-fashioned, Big Book Catalog-style appeal. On the 21st century front, Sears’ MyGofer experiment, which merges online shopping and the ability to pick items up at a brick and mortar location, might allow Sears to unlock some value of all those Sears and Kmart stores. (But note to Sears: if you’re going to position yourself as a serious Internet player, make sure
Gilly Hicks–We’re Not Sold
When it comes to Gilly Hicks, the lifestyle lingerie emporium aimed at teens and the newest brand in the Abercrombie stable, there’s one thing we can all agree on: the store itself is beautiful, luxurious, and sexy. The look of the space has won raves from fashion bloggers and stock analysts alike. The branding is brilliant, although entirely fictional: Abercrombie CEO Mike Jeffries concocted an elaborate Australian back story for the entirely American underwear brand (who knew “down under” had other meanings?) A portrait of “Gilly” hangs in the stores, to add a faux vintage feel to the shop. Gilly Hicks hopes to be younger and hipper than, but just as successful as, Victoria’s Secret. The opening of Gilly Hicks has been controversial. Although Citigroup analyst Kimberly C. Greenberger praised the store’s “cute and sweetly sexy” image and said, “We believe Gilly Hicks could be a more wholesome alternative (to Victoria's Secret), and mothers would not mind taking their 15-year-olds to Gilly Hicks to shop,” an assortment of critics have attacked the whole notion of trying to sell sex to teens. Everything from the store’s racy ad campaign, featuring 7-foot-tall posters of naked men, to the website, which broadcasts a video showing women swimming topless, and the effort to sell sexy lingerie to teens has drawn complaints. But the ultimate question, indeed, the only question is, will it sell? Gilly Hicks represents a huge per store investment, from the home-like front porch exterior to the dimly lit Ralph Lauren-on-steroids interior, with a huge amount of square footage dedicated to selling a tiny passel of products that would fit comfortably inside the closet of a New York City studio apartment. On the one hand, other companies have made big profits using edgy, sexy ads to sell to the teenage set. The other ...
Drop a quarter in the jar if you like this post
Maybe I wasn’t in an especially charitable mood, but I thought I had seen it all when I recently spotted a styrofoam cup duct taped to the delivery window of a Dunkin’ Donuts, a sight which gave off the weird vibe that drive-through customers should offer a reward to a forearm for handing them a bag. There are a few topics that are guaranteed to generate heated arguments on the internet. Is it rude ask people to take their shoes off in your house? Is it tacky to have a cash bar at your wedding? And today’s subject, should behind-the-counter employees solicit tips in a jar next to the register? Anywhere you see counter service, you’re likely to see a jar or cup filled with dollar bills and coins. Cold Stone Creamery has raised the tip jar to an art form – workers break out into loud goofy songs when you drop a bill into the jar. Even teachers have gotten in on the act – one instructor conducted an informal experiment by setting a tip jar on his desk, and found that a few of his students threw in some (promptly refunded) change. Nowhere is the tip jar more ubiquitous than the coffee shop, whether it’s the indie rock dive around the corner or corporate behemoth Starbucks. There’s a certain logic behind the coffee shop tip jar; after all, say baristas, bartenders get tips, and making a latte is at least as complicated as pouring a draft beer. Tip jars have their supporters. Counter service employees are delighted to get a few extra dollars for their efforts. Store owners and managers are happy to have their employees rewarded without having to raise prices or wages. And some customers don’t mind the jars, or even find some of the more creative hand ...
Hyatt’s Random Walk Down Service Street
Last month, Hyatt Hotels’ C.E.O., Mark Holamazian, announced that Hyatt Hotel employees will be performing “random acts of generosity” for some customers, such as comping a bar tab or waiving charges for a family breakfast. Bloggers have noted that conducting a publicity campaign around gestures hardly seems random, and runs the risk of angering those who don’t receive the largesse. Rob Walker’s Consumed column in this week’s New York Times Sunday Magazine points out that the Hyatt campaign is an effort to leave the customer grateful. Walker cites a coming paper in the Journal of Marketing which argues that a customer who is made to feel grateful is likely to become “enduringly loyal.” Humans enjoy reciprocating out of gratitude, and we feel guilty when we don’t, which is a phenomenon that businesses can exploit. But, as Walker writes, in order to inspire gratitude, favors must be performed “as a function of free will,” not merely in service of company rules. Loyalty programs sponsored by hotels and airlines do not automatically inspire gratitude; instead, frequent customers feel entitled to the free flights and hotel nights, andstrategize to gain the most generous rewards for the points they’ve earned. It’s not wrong for Hyatt to be ramping up customer service, especially now. Service has always driven loyalty, especially when customers are giving more thought to how they spend each dollar. One recent studyfound that nearly half of all customers feel service has declined since the recession started, and more than that said they’ve recently cut ties with a company due to a service lapse. It’s no coincidence that Nordstrom, with its legendary customer service, has recently trouncedcompetitors such as Macy’s and Saks in terms of sales and stock performance. But we question whether Hyatt’s scattershot, random approach is the best way to go. ...
Saturday Morning at the Hardware Store
I walk in and a clerk approaches to ask if I need help. I tell him I need a flashlight, just something basic. He walks me to the appropriate spot in the aisle, and begins describing the selection. “We’ve got your Eveready. $3.95. Not the greatest, but does the job,” he says, starting at his lowest price point. “Then there’s this Energizer. Better grip. $6.99. Or we’ve got a Sylvania. Good for the garage. It’s $12.99.” He takes a step to the right, moving toward something else, as if he’s signaling that we’re about to enter a special new universe. “Of course,” he tells me with a knowing look, “you could get this.” He begins hefting a powerful looking cylinder of silvery black metal and then starts thwacking it slightly menacingly on the palm of his other hand. “This,” he pronounces, “this is the one the cops carry.” Of course, he had me at the product demo, but the law enforcement piece put me all in. I buy two of them……at $49.99—each. There are a number of lessons here, not the least of which is the incalculable sales value of story in the store. This was a pitch-perfect bravura performance, and in case you’re thinking today’s workforce isn’t trainable in this skill, you need to know that this associate was not some old-timer hardware store guy—but a 20-something “kid.”
