I found out today that Walmart has a newsletter, and that it actually features the “old spelling” Wal-Mart. Interesting that the spelling is different depending upon what you’re reading, but the scoop is that the name is changing to “Walmart” and the colors are also getting a sprucing. What this says to me is: Even the biggest retailer in the world feels it’s important to keep in touch with their customers. How about you? If you don’t keep in front of them, they’ll for sure forget you.
A newsletter is one way to do this. It’s a great vehicle to inform the public just what your company is doing and what’s new with your employees and products. A simple but clever format, this is not an ad for your products but a brand-building mechanism for your business. Notice the green banner that says “top trends, tips and takeaways from the thought leaders in green retailing.” Yes, this is also from Walmart. Did you know they were leaders in green retailing? I didn’t.
According to a recent article in Chain Store Age, the future of retailing seems to be related to customer service integration and information technology. Here’s what some of the most cutting-edge businesses are doing:
- Marketing programs designed specifically for what customers want to buy — not what we want to sell them. No one sells anything to a customer today, customers decide to buy or not buy. It’s their choice.
- No more waiting at check-out lines. Apparently this is what customers consider the worst part of shopping. I had an interesting experience in Walmart recently. I requested $20 cash back on top of my purchases. Somehow, I forgot to get the $20 and discovered my shortage at the Dunkin’ Donuts. Off I went back to search for my $20. The cashier didn't remember it, so she asked around and after a while came back and handed me a $20 bill, saying no one had found it but here you go. At first I refused, saying it was my fault to walk out without my money. She said it happens and we’re happy to cover it—we believe you. So much for the prevailing thought of Walmart being cheap! I left with my $20, still feeling a bit guilty, but I was amazed at the customer service.
- Get to know what your customers want and their shopping history or “browsing history,” and then start sending out special offers to these customers. Store service will take on a new meaning. Not only will salespeople give pricing to customers, but will have access to competitors’ products as well as their pricing. This will be done from a hand-held device.
The mega stores, really, only offer a narrow view for the customer. One is the view that they deliver the lowest price. The key will be to really understand our customers and react quickly to their spending trends rather than immediately going to the lowest prices. The “megas” offer narrow selections to the masses. If the independent store is to win and grow it will have to enhance the experience with a broader, more interesting assortment of products as well as personal service. This is more than showing up on time. It’s the “over-promise, over-deliver” mentality. Only by delivering quicker, better, individualized solutions will the independent have something to compete on other than price.
Customers continue to change. We’re seeing new categories, tweens and teens with unique spending habits and much more. Retailers must understand how to use technology to offer the right stuff to the right customers. Just because a customer is older doesn’t mean they think they’re older or want to buy "older" products. So texting, writing a blog and having a MySpace is not only for younger customers.
Although the Chain Store Age article was taken from “Oracle, the technology people,” it lets us in on the vision that is out there for all of us: technology.
Again we go back to value, what it is and how to deliver it. Some things seem worth repeating.
Business runs on margins; if you price too low you will be out of business. If your prices are high you may have less customers. If you go out of business because of high prices, at least you won’t be poor!
Does Cost Really Matter?
It probably does to your salespeople if they know the costs. Think about how you feel when you know the cost of a product you’re buying. Don’t you automatically decide how much it should sell for? You don’t figure in overhead, winter storms and gas prices; you just decide what you want to pay.
Customers really don’t understand the price of certain products–carpet being one of them. As professionals we might come close but customers are confused by the process. Different types of information on the back of carpets depending upon where you shop. It’s pretty impossible to shop the products until the salespeople decide that they’re all alike and then most likely drop the price. There’s a reason why the stores have private labels — so the customer can’t compare the products.
Carpet is undervalued. The average selling price in 1975 was $15.40 a square yard. Carpet has gone up 80% since the 50s and automobiles have gone up 240%. The price of houses would probably scare us to death.
Natural hard surface products need to be sold on the “stories.” Sustainability, availability, the green story, and unusualness—not price. From day one of retailing, the unavailability of products has always demanded higher prices.
Customers pay what they perceive value to be, no more and no less. It’s not all about product, it’s the perception of your store, your services and the quality of everyone who works for you. The more knowledge, the more degrees and the more certifications your team has the higher their worth.
Brands have huge value. The value of a brand can’t be overstated. From Nike to our new swimming brand on the Cheerio box. What’s your store brand? And what’s your connection to the community? Is it important that you’ve been in business for 100 years? If you haven’t done anything unusual or important, it may not be. All these connections are “brand building.” Know about your “big brand products” and remember that customers want their brands and will pay for them. They already know the value of their brands before they come into your store. Just reinforce what they believe. Go to your brand’s Web site and learn all you can.
The Better Customer is Still Out There
Despite the “R” word and rising gas, food and whatever else there is—there are still people out there with money. They’re buying from someone and it might as well be you. Unless your salespeople are used to selling on price; if so, this is a tough time for them to change. If they’re going to drop prices because that’s the only way they know how to sell or you want them to sell, then raise the prices on your products so you don’t go out of business.
Keep your cost prices confidential and teach your salespeople what value your store has. Give them relevant product knowledge as well as tools to sell products. Shelter magazines to give customers ideas and photos of jobs that your store has done. Remember female consumers buy completed interiors and “looks” whereas men buy products. Send a man out for a product and he comes back with it. Send a woman out and she comes back with whatever she likes and sees. Much of what she buys depends on how clever your store is merchandised, the “fashionablitiy” of your store and your salespeople, and everyone’s ability to get these points across.
Better merchandise should be sold at higher prices. Funny that I have to say that. Stores drop prices all the time, giving customers the idea that everything is alike. Lexus doesn’t have any problem charging what they charge; they don’t spend time comparing themselves to Ford. They sell what they sell and from their showrooms to their service, the customer wants to belong to the club. There are just some things that are “worth” more.
There will always be a customer who will say your price is too high. Why? Because I know that some people will bargain with me and it’s worth a shot. If you believe in your products and your business, you will take it as “just a shot.” This is actually where your knowledge and “know-how” comes in.
Merchandise your floor well. Salespeople should have proper “step-up” and “step-down” products to sell from. Buying merchandise should be a thoughtful process—how does it fit into your merchandise mix, what are your customers buying and what are you selling? Be diligent in collecting this information. “Hit or miss” or “throw some against the wall” has never been a strategy. When there were more customers you could “get lucky.” Now you can get out of business!