The Fault In Our Stores
Steve Dennis
Top Retail Influencer & Analyst | Strategic Advisor | Keynote Speaker | Award-winning Podcast Host | Bestselling Author of "Leaders Leap" and "Remarkable Retail" | Forbes Senior Retail Contributor
The following is excerpted from my just released book Remarkable Retail: How To Win & Keep Customers in the Age of Digital Disruption, which I finished writing and editing at the end of last year. Many people believe that the COVID-19 crisis is the proximate cause of quite a few retailers dire situation and imminent bankruptcy filings. Yet the bullet that will kill a good number of them was fired long ago.
Long-term trends, demographic, technological, and otherwise, have clearly exacerbated the issues for those retailers that find themselves stuck in the middle. But we shouldn’t lose sight of the fact that many troubled retailers are suffering from wounds that were largely self inflicted over a period of many, many years.
Far too much of retail is still filled with tired old ideas and an abject failure to pursue innovation. Many of the retailers filing for bankruptcy or closing large numbers of stores have barely changed in over a decade.
The same old mistakes, particularly an over-reliance on deep discounting, are repeated over and over again. Tour most regional malls or drive through a typical suburban shopping area, and you’ll find all the usual suspects and a veritable epidemic of boring, a maelstrom of mediocre.
During my career—and particularly during the past few years as a keynote speaker and consultant—I have traveled around the world and been exposed to a wide variety of different markets and retail concepts. One finding that is consistent, whether I am in New York, Los Angeles, Beijing, Sydney, Tokyo, Mumbai, or Dubai, is that an awful lot of retail looks and feels pretty similar. Virtually identical storefronts and websites. Look-alike promotional signs. One-size-fits all marketing campaigns. Merchandise presented in an uninspiring way on a sea of racks and tables. Lackluster customer service, if there is any service to speak of at all. And as for product offerings, they’re often all the familiar name brands with wide distribution, plus quite a few obvious knockoffs.
Department stores in particular have been swimming in a sea of sameness for decades. Now they are drowning.
The retailers that are struggling typically have both strategic and executional issues. From a business design standpoint they often sit in the middle of the price spectrum, offering neither great product value and convenience nor anything unique from a product, experience, or service standpoint. They sell fairly average “safe” products to the great masses of the population. A little bit of everything for everybody, nothing that special—or remarkable—for anybody.
Even worse, they are often deeply invested in real estate that may have been the right decision ten or twenty years ago, but today their portfolio is typically littered with many poorly performing locations. These stores are usually too big for the digital age and their design and layouts are anything but contemporary and attractive. The tired, outdated visual design of the average Macy’s or Dillard’s stands in stark contrast to the looks of fashion brands like H&M, Zara, or Supreme or newer beauty brands like Bluemercury or Glossier. The amount of money that needs to be invested to update and reposition a weak brand’s physical assets is more than a little bit daunting.
Making matters worse, basic execution—housekeeping, staffing, keeping inventory in stock, and so on—is also lacking at many challenged retailers. Devoid of anything remarkable, their sales productivity and profitability are poor. Rather than trying to innovate, the most common reaction to dealing with lagging store performance is to engage in a series of cost-cutting moves—which tend to make an already untenable situation go from bad to awful.
This article originally appeared on my blog which can be found here
Advisor, Board Member and Coach
4 年Well said Steve - and the survivors will be the ones that take this opportunity to rethink and rearchitect their offering - but it is certainly going to be too little too late for many of the players.
Accurately put, we need to bring local art, craft, food and people to physical retail all over the world ??
Content Writer | Sales | Marketing | Events | Market Research
4 年I'll go a step further and say that basic execution is lacking because Retail management (head office and in-store) methods are almost entirely numbers / metrics based (spreadsheet management, minus the people management). What makes or breaks an in-store experience for customers? Genuine enthusiasm and passion for the brand, product(s) and service(s), combined with knowledge. What's needed to deliver a brand fan generating service experience? - Soft skills (The ability to truly connect with people. Listening skills. Compassion. Empathy. Energy.) - Emotional intelligence (Underpinning all communication, manifest in the simple desire to help people) The best of the Hospitality industry is legendary for this approach. To the extent that Retail Banking has studied how the best in Hospitality deliver their 'wow', in an attempt to warm and enhance their own service delivery capability (and profitability) . Yet this passionate, empathetic, approach is almost completely missing in far to many big box, mainstream, Retailers. Why? 1) Soft skills don't appear on the KPI list used to 'measure' Retail store, or Group, trading performance. (And I don't include, 'was I greeted on arrival in store' on this list - that's setting the bar so low as to not even be worth mentioning.) 2) Managing an in-store team with an almost exclusively numbers based focus is what delivers the sub par results we see time and again. Playing to the stereotype, just to demonstrate a point: It's letting an accountant (fluent in numbers, but not known for high energy, passion and public speaking skills) deliver the motivational morning team briefing, and wondering why your creative, passionate and enthusiastic team have switched off after 15 seconds. (Selling the outcome, not the product / service / experience, which delivers the outcome = cart before horse) - Do we hire an accountant because of their winning personality (sorry number crunching friends), or their stoic ability to accurately crunch data, delivering essential financial insights? - Should we entrust our numerically amazing accounting friends to manage and deliver our passion, energy , enthusiasm and service based customer experience? In any industry or sector, asking the wrong people to do the wrong tasks is always a recipe for disaster. The skill set, and mindset, for someone who excels at spreadsheet based performance analysis, stock counts, stock replenishment, potentially even merchandising (tasks based in part or whole on compiling, interpreting and/or utilizing, numerical data), are not remotely the same as those required to deliver a truly brand fan winning customer experience. How many of us have set store housekeeping goals in Retail, only to see staff obsessively focus on these, at the expense of customers and service delivery? Be honest now. In Retail, getting this repeatedly wrong is a toxic combination. One which results in a begrudging, feet dragging, daily slog. A full on arm wrestle between what store staff are told must be done, and how little can actually be done without being confronted by management. Staff engagement nose dives. Store standards slide. Customer engagement falls of a cliff. Customers can tell. Staff rather talk to each other, complaining about the working environment. I've seen this time and again. And, let's be honest here, I'm no Einstein. So why is it so difficult to deliver something else? My guess is that Head Office hasn't figured out that it needs to communicate differently (or, if it has, hasn't yet figured out how to deliver this message), between business units. Look at it this way; Would we communicate at a board meeting the same way we would to customers on the shop floor? No. So why is this such a difficult concept to grasp when communication takes place between Head Office, Regional and Store Management, and the in-store team? A conversion from a numbers based conversation, to a passion based, service delivery, language (to achieve those numbers) is 100% essential if we are to enable delivery of a brand fan wowing, financially successful, business. (Selling the experience through the product and/or service, which delivers the outcome = horse before cart) This shift in communicational mindset also encourages a change in view of who we hire, what we hire for, and how we retain talent. Yet still we ignore this 'hidden in plain sight' dysfunction, and wonder why, in far too many environments, Retail sucks.
World Record Holder | Award-Winning Marketing Thought Leader | Top 25 Innovators across the Asia-Pacific - The Holmes Report | Forbes Author | BW 40 under 40
4 年Great article Steve!
Chief Client Officer @ Taylored Analytics | Executive Business Coach @ johnbartold.com
4 年And too often, these faults were propagated across the retail landscape as 'best practices' and everyone seemed to adopt them. Good to identify them. Now, time to apply processes to drive new thinking, creativity and focus on consumers and the relationship between the brand and the consumer.