Platt Retail Institute: Breaking Down Barriers to Create a Competitive Advantage

Discussion
Nov 20, 2009
Avatar

By Don Watt, chairman
and CEO of D+W Partners

Through
a special arrangement, presented here for discussion, is a summary of
a current article from the Platt Retail Institute’s Journal of Retail
Analytics
.

Several years ago, we experimented with
installing TV screens in the back rooms of 10 stores. This was in response
to management’s concern that store personnel were not following weekly
plans. The company president was filmed, outlining the five key objectives
for the week, ranking each store on effectiveness of implementation.
Each week, results were reviewed. No manager wanted to be questioned
on shortfalls to plan. The resulting peer pressure began to stimulate
improved performance. The 10 test stores outperformed the rest of the
chain by an average of 50 percent in implementing plan.

A 15-minute tape,
shown to every employee, was more effective than the previous 2-½-inch-thick
printed document. The reason was obvious. The printed piece was too large
to absorb, and if the reader did make an attempt, it delayed other functions.

Based
on the test, screens were installed in all 250 stores. Internalizing
TV production functions, with a director, camera operator, assistant
and editor, lowered costs per commercial from $150,000 to $600. Annual
studio costs to set up and operate were under $1 million. Payback was
under 10 months, with ongoing annual savings of $3 million, including
increased messaging.

As the screens sat idle during the day, they
were moved to the selling floor, to promote specific product programs.
The results were surprising. Average increases of 400 percent were achieved
when the authority figure delivered the message. At first, this created
some turmoil, requiring the issuing of rain checks, to compensate for
out-of-stocks, until adequate stocking levels could be predicted. Another
benefit was discovered. Pricing became less sensitive, as the value proposition
was clarified. The president, as consumer advocate, was more believable
than a paid spokesperson. Moreover, his message differentiated his business
from competitors in a meaningful way.

Several years later, the next president
of the chain dismantled the system, as he was uncomfortable on camera,
or communicating with employees in this medium. His tenure proved to
be short and the idea became distant history, until a new president began
to utilize mass media to tell consumers about his private label program.
Will he move to communicating in-store, given the proven effectiveness
of the system?

Stay tuned; a new case history may be
around the corner. For other retailers seeking to find a competitive
advantage, today’s technological advances offer an opportunity to use
flat screens, centrally controlled, without the spokesperson leaving
the office. This use of an authority figure isn’t for everyone, as it
requires several factors to come together, but when they do, the results
can be exciting and profitable.

Discussion
Questions: What do you think of the potential to feature top retail
executives on in-store media networks? Generally, do you like seeing
store CEOs or other “authority figures” involved in commercial
messages?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

14 Comments on "Platt Retail Institute: Breaking Down Barriers to Create a Competitive Advantage"


Sort by:   newest | oldest | most voted
Steve Montgomery
Guest
11 years 5 months ago

As indicated in the article, several factors combined to make this work–a personal “appeal” from the president, a simplified message delivered in a visual format, and public ranking of the stores. I am also sure it worked because the president was personable on camera. That doesn’t mean that to be effective, the spokesperson has to be to a movie star but they do have to be believable.

I think that is the key to the effectiveness of an authority acting as a company spokesperson. The audience must believe that the presenter believes in what they are doing, selling, etc. A classic would be Lee Iacocca and his famous line “If you can find a better car, buy it.”

James Tenser
Guest
11 years 5 months ago

Fascinating example of the tight natural linkage between in-store media and in-store implementation. This CEO seems like something of a visionary. It’s unfortunate his successor was unable to carry the concept forward.

There are several worthy threads to this discussion, but I’ll focus on just one: I’m not very keen on the value of cheerleading as the sole assurance of store level compliance, even if a charismatic CEO is leading the cheer. However, if the right tools and training are also provided; and if employees know with certainty what is expected and how they will be measured; then management communication can help to establish a culture of compliance.

Ian Percy
Guest
11 years 5 months ago

What would we do without research? A 15 minute personal video message has more impact than a 2.5 inch thick manual no one reads! Who would have known?

If I understand it right, a program apparently produces amazing results but is canceled because the President is “uncomfortable” speaking to his employees. There are days I shake my head at some of these pieces. Once again–all organizations die from self-inflicted wounds.

This also triggers two other ideas. First, executives should get training in persuasive presentation skills. In my view this is among the top three skills every leader must have. Second, if you think about doing something like this and you don’t have an “authority figure” who can pull it off in an engaging and persuasive way, consider using a good external professional speaker to convey the company message. A dynamic outsider will out-persuade a dull up-tight insider every day. Trust me, I did the research!

Doron Levy
Guest
Doron Levy
11 years 5 months ago

I guess it really depends on how well the company is doing and what the message is. GM (I know, not retail) is in dire straits and they seem to be plastering the CEO everywhere. Do consumers want to hear from the guy that got a bailout? Not sure. Same goes for retail. Depending on the circumstances, how well would customers respond (or employees who constantly have to watch these things)? I’m not big on the in-store media to begin with but I would suggest keeping it to merchandise and vendor commercials.

Bernice Hurst
Guest
11 years 5 months ago

Although I don’t have any facts on how happy the company is with results, Waitrose supermarket in the UK has been using its MD in a variety of ways to interact with customers and staff. He has even blogged about his weightloss diet in an effort to show he is a genuine, real, honest kind of a guy. His face is on a lot of publicity material and he is fairly convincing even to a cynic like me. Whether having him live, on screen, in-store, is next up I do not know. But I wouldn’t be surprised. The fact that he is used more and more indicates that he is a pretty successful salesman but I think, as with the article and other comments, it’s all down to the individual.

Marshall Kay
Guest
Marshall Kay
11 years 5 months ago

I like the idea of utilizing video clips to drive better in-store execution. Right now, management has little way of knowing what is really happening in the stores. Self-reporting is notoriously unreliable. Video clips improve the prospect of greater compliance with HQ’s plans.

Many people are unaware, but item-level RFID can be used to provide executives and district managers with real-time visibility into the level execution of individual stores. Whether it’s as simple as knowing whether specific merchandise is still sitting in the stock room, or whether it’s validation of planogram compliance, executives have the ability to know exactly which stores are (and aren’t) following plan…and they will have the data to prove it! These tools will be particularly valuable to district managers, allowing them to allocate their time more effectively.

Mel Kleiman
Guest
11 years 5 months ago

Two things here:

1. Communications with your employees. Here we have a key executive holding a weekly huddle with all employees. Now, everyone understands the objective for the week, no matter what time they come to work or what their job is. They heard it from the top and we have open communications.

2. As a spokesperson to the customer, that is a whole different game. Go with the executive or go with a paid spokesperson but communications today is the key.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
11 years 5 months ago

An important lesson. Now let’s fast forward to today. Who is going to be the first to combine video with social media capabilities in the retail store operation…effectively moving from one-way communications to collaboration? Anyone think the employees responsible for delivering the last 100 yards have anything of value to contribute?

Edward Weisberg
Guest
Edward Weisberg
11 years 5 months ago
The story of the retailer who used video for sales management is quite a compelling case study of the effectiveness of how passion and interest, combined with the right medium, can drive success. How successful the effort is, however, is dependent on the passion and the interest of the CEO or spokesperson. If the CEO is just a “talking head” financial person, without a real understanding of why the company is successful, then the net result will be negative, as will the long-term prospects of the firm. One of the reasons the televised sales meeting worked is that the CEO was able to show that he really cared about each store, and he paid attention to the numbers, hopefully praising the strong performers. I’m sure many sales managers never bothered to read the written reports, but when they were part of the show on TV, with their success broadcasted, they paid attention. Using TVs in the store for consumers also depends on the character of the speaker. We’ve seen many ad campaigns that are extremely… Read more »
Ed Dennis
Guest
Ed Dennis
11 years 5 months ago

While communication from the executive suite is always better than having a message filtered through 3 to 5 executives and managers with agendas of their own, one must ask how others do it before piling accolades on this solution. It would seem that if the company were taking the right tack with regard to hiring both managers and floor personnel, and were backing this up with proper training, then the expense of the consultants and TVs might be saved.

With regard to a competitive advantage, it would seem that this retailer found itself at a disadvantage and instituted this system to catch up with competition. Can’t completely say it’s a waste but it would seem that a presentation on one screen during a weekly meeting should suffice IF the employees and managers aren’t completely daft.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
11 years 5 months ago

Some years ago I managed the BI-LO supermarket bidness in Greenville, SC for a local ad agency. The Marketing VP was Allan Noddle, Jeff’s older brother and the best retailer I have ever known. BI-LO’s ad manager suggested that we create a TV campaign featuring Allan, and our creative director informed her that Allan had “a radio face.” Later, when Allan became president of Giant Foods in Carlisle, PA, his ad agency created an extremely effective, award-winning TV campaign featuring him. Boy, was our agency wrong. Allan’s position as an authority figure was a marketing goldmine. I’m a believer.

Tim Henderson
Guest
Tim Henderson
11 years 5 months ago
CEO communications to staff are one thing. Using CEOs to communicate to consumers is another. In the case of staff, it’s always a good idea to have the CEO offer some form of regular communication to staff to inform them about what’s going on with the business, new initiatives, long range plans, etc. I’d add that the CEO should make every effort to visit stores in person as often as possible. When staff hear the message from the CEO’s mouth and see him/her in the store, they know this is a CEO who cares about the business, the staff, and the consumer–and hopefully that mindset carries over to staff. But I’m less fond of using CEOs to communicate to the public. In some cases, a lucky company has a natural communicator as CEO, e.g., Wendy’s and Men’s Wearhouse. What I think is more important is that brands find a friendly, trustworthy face to put on the brand to make the brand more accessible to consumers. CEOs aren’t always good at that. That said, what’s most… Read more »
Jerry Gelsomino
Guest
11 years 5 months ago

Is this new? 30 years ago I worked for a retailer that build its own TV studio to be able to produce video messages and send them to the field. This was a great way to bring important corporate messages and technique of selling to our stores. The problem was whether or not the on-screen personality that came through was positive or negative, as delivered by television. Some people just don’t look good on TV; e.g. Nixon vs, JFK. But in any case, it gave a snapshot to the staff of who our executives were and what they looked like.

Mark Price
Guest
Mark Price
11 years 5 months ago

As the report “Creating the Wow Experience” from Wharton indicated, one of the key factors in “Wow” is authenticity. Customers want to deal with real people, get real feedback and have real relationships with companies who share their thoughts and listen to their customer needs.

This media experiment provides a real voice to two constituencies: (1) retail floor associates and (2) customers in-store. It creates a real-world voice for the company, one that has “skin in the game,” and can make the company much more personal and genuine.

This approach will only work as long as the executive continues to speak authentically, and does not resort to impersonal pitches for products that will not meet customer-needs. The goal is not to sell the lowest-priced product, or the product on sale; the goal is to create long-term customers who appreciate real feedback on strengths and weaknesses of different products and the support to back it up.

wpDiscuz

Take Our Instant Poll

How effective are CEOs or other company figures as pitch people?

View Results

Loading ... Loading ...