Retailing success doesn’t depend on silver bullets

Discussion
Photo: RetailWire
Dec 13, 2018
Ray Riley

In his book “The Hard Thing About Hard Things,” Ben Horowitz relays a conversation he had with a fellow engineer at Netscape at a time it was under siege from Microsoft’s web server, which happened to be five-times faster. Netscape had just gone public three months prior.

His counterpart told him: “Ben, those silver bullets that you and Mike are looking for are fine and good, but our web server is five times slower. There is no silver bullet that’s going to fix that. No, we are going to have to use a lot of lead bullets.”

On the opposite side of the spectrum, physical retail has been under similar siege. Volatile employee turnover, challenging rents, a tight labor market, shifting foot traffic and technology infiltrating the store at every turn. This, in addition to many global retailers burdened with lackluster real estate, irrelevant merchandise assortments, weak data and tough cash positions. Where’s the silver bullet?

Anyone who’s spent considerable time in physical retail has heard the silver bullets as they’ve been loaded into the figurative magazine:

“We’ll increase our investment in e-commerce; that’s where our growth is coming from.”

“Let’s poach [senior leader] from [legacy or competitor’s business].”

“The [insert technology] will fix it.”

If it were easy, wouldn’t everyone have figured it out by now? It’s no secret that over 75 percent of overall retail revenue occurs in physical stores, and while that number will likely decline in the years to come, it will not invert.

The role of a team member or manager within physical retail has fundamentally changed and increasingly requires an advanced skill set as artificial intelligence and other technologies become more prevalent. That along with a reduction in footprints will become more critical to retail success as stores become physical hubs for redrawn customer districts.

It’s time to reinvent the store. I’m not referring to shop renovations, touch-screen kiosks or the vague notion of experiences, which often take the form of champagne and cheese Fridays. I’m talking about those who create experiences; people. You won’t find any silver bullets.

DISCUSSION QUESTIONS: How will the role of store managers and associates need to change in the next couple of years? What skill sets and training will be needed to keep store staff ahead of the competitive learning curve?

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Braintrust
"Selling anything, especially in retail, is all about value. "
"In our highly competitive markets, the store must be shaken up at least monthly to look different."
"The key takeaway here is that value creation happens at the *customer* level, not the *transaction* level. It’s about CLV developed over time..."

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29 Comments on "Retailing success doesn’t depend on silver bullets"


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Min-Jee Hwang
BrainTrust

Selling anything, especially in retail, is all about value. Shoppers may think or say “I can’t afford that” but they really mean they don’t see the value in it. This is how store employees can evolve moving forward: focus on the value. Create experiences that people want, focus on the why of a product or service, and be different from competitors.

Dick Seesel
BrainTrust

The role of a store manager or associate doesn’t happen in a vacuum. Yes, their roles are changing as most retailers try to shift to a true omnichannel model and add tech-based service enhancements. And roles are also changing as stores broaden the merchandise categories they offer.

But the store experience is still driven by headquarters initiatives, from merchandising to brand management to product development. So the basic premise — there is no “silver bullet” — is right. It’s about getting all of the elements of the retail mix in sync with each other, and targeted toward shoppers who find that mix most relevant to their needs.

Bob Phibbs
BrainTrust

Clearly Ray is brilliant. Nothing to add, no silver bullets. Retail takes hard work to know what shoppers will pay money for, how to craft a branded shopping experience and get them to pay you enough so you can pull enough money out and grow the business.

Ray Riley
BrainTrust

Thanks Bob.

Mark Ryski
BrainTrust

There was a time when store managers were held in high esteem and associates were valued. Today, it seems that many retail executives are indeed looking for a silver bullet – and in some cases a high capacity clip full of silver bullets that they randomly spray across the organization.

Store managers and associates are not devices that can be programmatically directed. In an effort to deliver greater “productivity” and a better “store experience” it seems that the store manager is being marginalized — they are being directed by apps, alerts and systems that drive their staffing decisions, merchandising decisions and even daily tasks. Retailers should realize that store managers and front-line personnel play a key role in their success. Store managers need to be able to use data and tools to make decisions and run the store without being lorded over by an app alert that tells them it’s time to clean the toilet.

Kenneth Leung
BrainTrust

The challenge is store managers and associates seem to be treated as cost of goods sold more than revenue generators. The increase use of automation seems to be a drive to reduce in store staffing. I am sure a few retailers is looking closely at the Amazon store experiment to see how they can replicate. I always say you can’t win by copying, you have to win by innovating, creating your own niche in product and services.

Chris Petersen, PhD.
BrainTrust

The whole is greater than the sum of the parts. In retail stores today, that whole must be focused on creating a compelling CX (customer experience). The single greatest component of CX is the “people” part. And the single greatest change agent is the store manager. All too often they are buried in operations and paperwork. Store managers are the single most influential factor in recruiting and developing the talent required to make a difference with customers. While store managers are not a “silver bullet” per se, they are an incredible focal point worth investing in and rewarding. They don’t need “silver bullets”, but they need the time and resources to adequately train staff to engage customers. The successful store of the future needs to have the “quarterback” on the floor actively developing all of the touchpoints that collectively comprise the whole of CX that makes the difference.

Ray Riley
BrainTrust

Love the QB reference. I totally agree.

Peter Fader
BrainTrust

The top two comments here (by Min-Jee and Bob) say it all: the value created for (and extracted from) most customers has got to exceed the value invested in them. And yes, it’s hard work to figure that out and do it consistently.

But it also takes a lot of discipline: don’t “give in” to a particular customer just because they make a lot of noise, or because of some old-fashioned notion that they’ll suddenly become a great customer after you satisfy them.

The key takeaway here is that value creation happens at the *customer* level, not the *transaction* level. It’s about CLV developed over time, not revenue collected at a particular moment. Doing that is hard, but it starts with a very different mindset than most retailers (and store managers) currently utilize.

Ray Riley
BrainTrust

Congrats on the book Peter — mine just arrived earlier in the week!

Art Suriano
BrainTrust
The answer to the question is it will come down to the people working in the stores and their ability to “wow” their customers. The problem is that the answer is no different for the future than it is today. You have two audiences: those that want to buy what they need and those who enjoy shopping. Those who buy what they need are going to shop more often online and avoid stores as much as possible. Those who enjoy shopping will remain a large group and that group is a group of consumers who visit stores, who expect service and are looking for a good experience. However, retailers for years have done everything they can to save a dollar short-term by reducing staff and cutting training which has serious long-term consequences. When doing so, these retailers are ignoring the opportunities they have to help the shopper make a purchase and to provide a great shopping experience that has the customer looking forward to returning. The retail winners of today will be the same winners… Read more »
Jeff Sward
Guest

Plain old lead bullets — I love that. Actually knowing who the customer is. Executing to their preferences better than the competition. Assortment planning, flow and seasonal conversion, risk mitigation, and what I call probability merchandising. Brand promise and product first. Path to purchase second.

Gene Detroyer
BrainTrust

It could not be said better, “it’s time to reinvent the store. I’m not referring to shop renovations, touch-screen kiosks or the vague notion of experiences, which often take the form of champagne and cheese Fridays…You won’t find any silver bullets.” Those who REINVENT the store in a way so that it is unrecognizable from today’s are going to be the winners.

How many times have we written about Target’s and others’ next new initiative that is going to change everything? Target, in particular, is the silver bullet king and will suffer in the long run.

Georganne Bender
BrainTrust

Right on, Ray! The overall concept of reinventing the store may come from corporate, but the in-store experience comes from the people who work there. Retail store managers and associates are often as overlooked as the fixtures that house the product. But they, in fact, are the personality of the store; they create the in-store experience. Respect for the front line just might be that silver bullet so many retailers are looking for. You can’t create the perfect in-store experience sitting behind a desk.

Ray Riley
BrainTrust

So true Georganne!

Ralph Jacobson
BrainTrust

Physical stores will survive, but those that will thrive will train and continuously re-train their staff to connect with shoppers of the moment. If the current shoppers research products online, then the staff needs to know their product portfolio better than the staff of the past. This is just one example of the continuous evolution of staff capabilities that is required in this fast-changing retail world.

Ray Riley
BrainTrust

Agreed Ralph. Products are always changing, and the consumer has instant access to product details at all times. I think the emphasis is (and has always been) solving problems for customers through expert human connection, in addition to basic sales and service skills. I view products and transactions as the outcomes of that. We’ve all seen the car salesman who can rattle off the horsepower and 0-60 metrics, but not actually understand the buyer in the slightest.

Ralph Jacobson
BrainTrust

Great points, Ray! Thanks.

Steve Montgomery
BrainTrust

We tell all our clients that there are no silver bullets in retail. Retail is detail and really is the cumulative impact of many details. This is true for the manager and store associate roles.

There is no silver bullet for the training that both groups need. There are lots of issues that need to be addressed in their training. Also, it’s not a training issue but the company’s perception of the value that they bring a store’s success has to change.

Rich Kizer
BrainTrust

The time has arrived when meetings to pump up associate involvement efforts and insist that the management get involved with associates is not enough. In our highly competitive markets, the store must be shaken up at least monthly to look differently. So shaken that customers start commenting on and asking when “these new” items came in. And because the store is frequently shaken, they go on a new and refreshing treasure hunt — every visit. And the associates get excited. Staleness comes from the same layouts and same looks presented all the time.

Ray Riley
BrainTrust

Yes Rich! Turn compliance and tasks into energy creating activities for the in-store teams to love, and in-turn transfer that energy to customers. Sounds like a great plan.

Mel Kleiman
BrainTrust

Looking at the lead bullets that show it is going to take to not just win the battle but to win the war. I’ll start with the right team.

  1. Systems and processes to hire the right people at all levels in the organization.
  2. Training, training, and more training.
  3. Reward and recognition for true performance.
  4. A fun place to work.
James Tenser
BrainTrust

The “silver bullet” mentality is a useful way to think about business innovation in retail. I have used the “bolt-on” metaphor in the past to make a similar point. A new app, or process, or policy seldom succeeds in transforming business performance on its own when addressed in isolation.

Beneficial change — especially in the physical retail environment — requires a systematic approach that engages the people on the front lines. Provide tools and support that enable their success, and most employees will embrace new methods and project their satisfaction toward customers.

This is an enduring principle of customer service which is no less relevant in the present era of digitally-mediated experiences.

Hania Whitfield
Guest

If you take the time to truly understand the new consumer mindset. Interestingly, it is the same mindset our parents and grandparents grew up with — that of a true shopping “experience.” The only difference is that consumers have actually improved sales success by researching first for a more prepared decision, but when it comes down to the purchase, we want the best and most personal experience in the process.

Intensive high-end customer service is key to keeping ahead of the competition — online or physical. Store managers will need to nurture and empower staff, and staff will need to hone their skills in creating loyalty. The busier the consumer becomes, the more significant and valued a “personal shopper” is to enhancing a consumer experience. Once a consumer trusts and enjoys a salesperson to understand and meet their needs, the loyalty follows. But employee turnover must remain very low to cultivate this concept. And that is where management must take responsibility for ensuring the employee experience is also exceptional.

Ray Riley
BrainTrust

100%!

Carlos Arambula
BrainTrust

Technology has changed consumer behavior and expectations. “Always on” consumers and tech savvy companies can build enduring relationships, but all it takes is one poorly trained employee to ruin that relationship.

All consumer facing employees, and especially managers, need to be beyond familiar with the company’s apps, e-commerce site, and store policies. Also it is critical that customer-service take a bigger role in the training of retail employees or they become a nuisance to educated consumers instead of a positive aspect of the experience.

It takes a lot of lead bullets to fix things, but one negative consumer experience can easily become the silver bullet that destroys the consumer-retailer relationship.

Ricardo Belmar
BrainTrust

There are no silver bullets, as Ray points out. Just as you shouldn’t deploy new technology in the store for the sake of technology, it all comes down to meeting your customers’ needs! Retailers that get that right will succeed.

Casey Golden
Guest
Agreed Ricardo, I relish leaving the office for a coffee and enjoy the European cafe culture. I believe Starbucks has a greater success focusing on in-store experience and talking a page out of the RH playbook. Starbucks used to be the place, dare I say that is was a luxury experience in 2007? Now it feels more like an assembly line where no one knows your name. Do you remember when the Barista knew knew you and put a smile on your face first thing in the morning. Personally, I have moved all “coffee” meetings and in-between times to the NY Meatpacking RH to the coffee bar on the 3rd floor because it is inviting, sophisticated, comfortable, and quiet. I can enjoy a moment with my coffee, a colleague, and my laptop. There are some Starbucks stores that still have beautiful seating areas, local artists hanging on the wall, and music low enough to have a conversation but they are rare and typically found in Europe. Starbucks is one of the few players that can… Read more »
Ricardo Belmar
BrainTrust

I recently visited that RH location in meatpacking and have to agree with you that it is a very different space! Actually has a meeting there as well and it was quite productive — definitely redefines retail as a destination space.

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Braintrust
"Selling anything, especially in retail, is all about value. "
"In our highly competitive markets, the store must be shaken up at least monthly to look different."
"The key takeaway here is that value creation happens at the *customer* level, not the *transaction* level. It’s about CLV developed over time..."

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