Lessons learned from two of the best brick and mortar retailers
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I am as guilty as the rest of the bloggers and pundits. The latest headlines on Amazon's innovation for Go stores or Amazon delivery suck the air out the rest of retail. However, what if you are not Amazon, and don't have the profitability of cloud services to fund retail stores? Is the rest of retail doomed to an impeding apocalypse?
No, but survival requires more than complacency. We miss, or often forget the successes of retailers who are thriving in spite of Amazon. The rest of retail would do well to re-examine their "secret sauce" of successes, which are not based upon free home delivery.
Why this is important: Retailers can never afford to be complacent. However, Amazon is not the only model of success. The rest of retail would do well to study the critical success factors of those who are thriving today in spite of Amazon's growth.
The most powerful four-letter word in retail today is "HELP" not "sell."
The very definition of historical retail was building a PLACE to merchandise PRODUCTS, and PROMOTE in order to attract customers to sell them things. The operative four-letter word of historical retail has been "SELL" them stuff. However, today's customers have access to unlimited products and prices online anytime and everywhere. The four Ps are no longer key differentiators. Online is increasingly winning at selling products at a price.
Customers do not want to be just "SOLD." They highly value "HELP" in evaluating choices and assistance in selecting what they need, what best fits their lifestyle. Don't believe it? Despite Amazon's successes, 75 percent of purchases are still made in store. Two powerful retail success stories stand out as models of what can be achieved in stores.
While Amazon Go may be sexy, Apple Store success continues unabated
It is almost hard to believe that Steve Jobs launched Apple stores in 2001. In the wake of all the Amazon headlines regarding the purchase of Whole Foods and the launch of Amazon Go, many have forgotten how Jobs literally reinvented the concept of a retail store as a customer-centric engagement center. The model for Apple's store design was in fact the concierge model of top hotels, not any existing retail store.
Apple's Stores still generate more foot traffic than all of Disney's theme parks combined. Despite being in some of the most expensive retail spaces like the Louvre in Paris, Apple stores consistently out perform Tiffany jewelry stores on a square foot basis.
The keys to Apple Stores success have nothing to do with the 4Ps or the latest technology. First and foremost, Apple recognizes the power of talent. They have the philosophy of "Hiring for Smiles." Apple's approach is that it is very difficult to train staff to smile and engage others. So hire for smiles and train the rest.
Apple's "secret sauce" is not secret — it requires executing fundamentals
The other key component of Apple's success is their focus on training staff on how to engage customers in order to help them. A major portion of initial training focuses on asking open questions to help understand customer needs. The number one priority in Apple stores is to help customers discover what they want to achieve, not to sell them a device.
The secret sauce of Apple lies in their customer-centric process that is the foundation for staff training and store operation. The APPLE is the acronym for the essence of their stores:
A pproach customers with a personalized warm welcome.
P robe politely to understand all customer's needs.
P resent a solution for the customer to take home today.
L isten for and resolve any issues or concerns.
E nd with a fond farewell and an invitation to return.
The word "sell" does not appear anywhere in the Apple store recruitment, training or process.
So, what if you are not Apple? Ace is the place and epitome of "HELP"
Ace Hardware stores are essentially the antithesis of Apple. They do not have cache high tech products, elaborate design or premier locations like the Louvre. While Ace stores are similar in size to many Apple stores, they are stuffed to the ceiling with thousands of SKUs of nuts, bolts and things consumers need for their daily lives.
What is unique about Ace Hardware it that they quite literally adopted the "HELP" mantra before Apple even envisioned their stores. There original slogan of the "Helpful Hardware Man" has evolved into "Folks." When you have a leaky "thing-ama-bob" on the weekend, Ace is literally the place with the knowledgeable people who can tell you what is, give you advice on options to replace it, as well instructions on how to install it.
I do not know Ace's acronym or "secret sauce" for people and training. Suffice it to say, Ace has earned incredible loyalty by friendly staff helping find solutions in store. As of 2016, J. D. Power has ranked Ace Hardware "Highest in Customer Satisfaction with Home Improvement Retail Stores" for ten consecutive years.
"Do. Or do not. There is no try." — best Yoda lesson ever for retail survival!
Bob Thompson just posted a fantastic article on Customer Think entitled: "An inconvenient truth – 93 percent of customer experience initiatives are failing." While Bob Thompson does a fantastic job of summarizing the issues, the commentary to the post is even more enlightening. I encourage all to review it. The comments are a litany of both the challenges and what the rest of retail can achieve.
What the rest of retail can do is what Amazon and most stores are NOT doing. What the rest of retail can do is focus on helping customers to solve problems, and assist them in buying what works for them. Instead of focusing on Amazon's headlines, the rest of retail needs to build on the success factors of Apple Stores and Ace Hardware:
- Talent first: Hire for smiles and invest in developing employees.
- Institutionalize customer centric processes focused on HELP versus sell.
- True CX: Real customer experience focused on taking the pain out of doing business, thanking customers for their business, and winning them back.
Retail does not have to be rocket science or require vast millions in capital investment. The operative word for store success is "DO." Senior management must mobilize the entire organization to focus on helping you and me find what we need to make things better in our lives. Sales are not the primary objective. Sales are an outcome of helping people to buy.
Chris Petersen Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace. www