Maximize retail sales by avoiding back-to-school syndrome
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By John Larson, senior partner at John Larson & Company
Over the last 20 years, one of the "constants" that I have observed in my work with major retailers to establish customer loyalty is a consistent five to seven point decline in customer satisfaction beginning the end of July and running through Labor Day.
Initially, this was easy to write off as a statistical anomaly, but over time I've come to realize that this is an especially challenging time of year for engendering high levels of customer satisfaction. Eventually, I developed a term to refer to this decline: "Back-to-school syndrome."
Two things typically happen during the back-to-school shopping season that contribute to back-to-school syndrome:
1. The influx of customers at that time of the year lengthens lines at the checkout register, in some cases doubling the time it takes to pay for the merchandise the customer has just selected.
2. Many of these additional customers are unfamiliar with your store. Some of them may actually be first-time shoppers with you. These customers will need help in finding the specific items they are looking to purchase (e.g., "Where do you keep your lunchboxes?").
The challenge retailers face during the back-to-school shopping period is navigating how to attract infrequent customers and capitalize on the opportunity for increased sales — without allowing those sales to come at the expense of a poorer experience for "regular customers" who form the backbone of the business over the course of a full year. If you aren't careful, the sales gains you achieve during back-to-school shopping can come at the expense of diminished revenues over the long-term with your most loyal customers.
So how can you "play it smart" and take advantage of this short-term uptick in business while minimizing any adverse impact on your more frequent, loyal customers. Here are a few suggestions for avoiding back-to-school syndrome:
1. Staff up. The great American philosopher Yogi Berra probably put it best when he said, "No one goes there anymore. It's too crowded." Traditional labor scheduling metrics that relate labor hours to sales revenue will not apply when incremental sales increases are being driven by customers who need more time and attention than the customers who frequent your stores at other times of the year. You will need to have more help on the floor during the back-to-school shopping period than you would normally require for a similar amount of sales volume in March or April.
2. For many retailers, the items that are purchased during back-to-school are easy to identify and form a narrow subset of the total merchandise offerings. If this is the case for your business, consider creating a temporary back-to-school department near the front of your store. This department would contain 70 to 80 percent of the items back-to-school shoppers require. By placing this section as close as possible to the entrance of your business, you'll make it easier for the back-to-school shoppers who may not be familiar with your store layout. This will also help keep other areas of the store more open for your year-round customers.
3. Involve your store employees in identifying solutions that may work for your specific clientele and retail concept. I continue to be amazed at the creativity of the employees who interact with customers on a day-in and day-out basis. They understand them and, more importantly, they want to do a good job for them. In my experience successful companies listen to their employees and take full advantage of the insights they have to offer, particularly during high traffic events like back-to-school shopping.
The back-to-school shopping period provides a tremendous opportunity for increased sales and new customer acquisition. Prepare for the event by ensuring your business is properly staffed, strategically placing your back-to-school items and keeping your valued employees involved in the planning process. In doing so, you'll easily avoid Back-to-School Syndrome and propel your business toward revenue gains and enhanced customer loyalty.
John Larson is also the co-author of Capturing Loyalty.