I’m running late for a meeting which has been called on virtually no notice by a client. I’m heading East towards the real burbs.
The traffic opens up a bit as I get past the Leader Newspaper headquarters on Whitehorse Road, and I plant the foot. I leave behind the rich feeding grounds of the BMW X5s and Merc 4WDs. The landscape is now dotted with Ford Territories and Subaru Foresters. I can see on the distant horizon the land of the real Aussie car, calling me, like a mirage in the desert. The rolling hills of suburbia. I’m heading out to where the V8 Falcons, Commodores, and Magnas hide at night, huddled in their cold, brick garages. The Falcons dream of running over BMX bikers. The Commodores of having their panels endorsed by a cigarette company as they race around the Mountain at Bathurst. The Magnas just dream of being either Falcons or Commodores; hating being copies of real cars.
Ah, the suburbs, true backbone of western society. Where even the native trees get clipped and credit cards get clipped even more. The Whitehorse Road shopping strip is retail central for Melbourne. Kilometres of big factory-style outlets. There’s Bunnings, Beacon, BBQ Galore, and that’s just a few of the Bs. And it is furniture retailer nirvana. There’s Outdoor Furniture, Oz Design, Scott Berkowitz, bloody Ray’s (used to be Ray’s Tent City) has furniture.
I look to my left and right as I race along and it seems different to the last time. More angry. More desperate.
Every single retailer has a SALE sign up. For some, it’s the entire window of their showroom covered in the word. Others have a plastic banner stretched along the roof-line or staked on the grass in front. Some have big balloons floating above the store or those bouncing thin plastic men blown up by a pump that beckon you in but only manage to scare me away.
Most have 30, 40 or 50% off. As original as another re-run of the Simpsons. If you’re all doing the same thing, why would anyone go to your shop over the next one claiming super specials too?
This is doubly frustrating as a marketer when you think about what they are selling. I wouldn’t mind if they were a little original in their buying. But they stock the same stuff. There are literally hundreds of identical donkey-brown square-angled latex-filled sofas along Whitehorse Road. Hundreds and hundreds of identical Balinese-inspired teak dining tables surrounded by thousands of identical folding teak chairs.
I know where the rainforests of Southeast Asia have gone. There are more teak trees in the 15 kilometres or so between Box Hill and Bayswater than there is in the 15,000 kilometres between Port Morseby and Ho Chi Min city.
No wonder everything is on Sale. Anybody with half an ounce of intelligence would do something else. Would say ‘Get new stock. Get rid of the crap. Move on with your lives. Change’. But do they? Year after year they go to the same conventions overseas. Visit the same exhibitors. Get told the same crap. Buy the same story and suffer the same problem. They compete on price because they are comfortable doing it and they just don’t seem to get the idea there are other things you can do besides reduce your profits every second day.
They claim they are ‘marketers’ because they’ve been to a seminar once on selling, but they constantly make the mistake discussed in the first 10 minutes of the first lecture in Marketing 101. If you’re looking for an inspiring career in marketing, don’t do furniture retail in Melbourne. You’d be better off joining the Army. In the Army, they actually know marketing has little to do with fighting the Taliban, or whatever the task is today.
And there is the pall of death. You can see it in the eyes of the managers of the stores. Poor suckers who agreed to a commission-based salary, sold through as a ‘profit-sharing’ deal. Here they are, on a lower base, now taking home less money than the people who cut down the trees in Malaysia and chopped them up to make occasional tables.
Why care? Because some people in retail are doing a great job and deserve better than to work for people with the I.Q. of a wing-nut, and besides that, I started my working life in retail and I happen to love it. I love the people contact, the edginess of it. The absolute make-or-break that it is each and every day of retail. I just wish it could be done a lot better than it is in dreary, suburban Melbourne.
Now that the recession is starting to bite and the blood is starting to flow on the streets – it’s about time we consider how to do retail in tough times properly.
What’s tough times?
The government thinks a dip in the GDP of 2 quarters is a recession and a depression is anything more. I’m talking say 1% lower. Any business that’s had two-quarters of minus one percent would be laughing at calling their situation anything other than a slightly flat period. A recession in the real world is when hundreds of thousands of people’s jobs go and a depression is when we’re begging for food on street corners. Keep in mind we’re a long way from either.
It’s all attitude
The whole game is attitude. The most important thing you can do is maintain a positive one. When you get up in the morning, say to yourself ‘I’ve got two ways of treating today. I can be a son of a bitch with a migraine, or I can be a fun, positive person who gets on with life and the rest of the human race and makes other’s lives a pleasure’. Whistle while you work. Be pleasant to be around. Be a leader.
Live it up
Fill yourself and the people who work for you with confidence and happiness. I don’t care if this means you have to take large amounts of morphine or start drinking at 8am. Make jokes. Spray perfume. Buy people lunches. Download some good music and play it too loud. People shop where they feel best and optimism makes everybody feel better.
Customers matter
And for God’s sake, focus on the needs of your customers. Australians love to shop no matter what the economy is doing. This is true in both business-to-business and consumer marketing. Consumers buy anything that makes them feel good. The entire fashion industry (plus beauty/ furniture…) is based on the idea that things don’t wear out, they simply loose appeal/ are no longer cool. So getting new ones makes you a better/cooler person. And this is accepted as raw fact.
Smart companies are always looking to invest in products and services that help to improve their business. They do tend to make decisions based more on logic, but only by shades. Businesses still decide to change over their carpet because it doesn’t match their new corporate colors. Their phones because they don’t work with wireless….
Yes, I know retail is starting to die a slow death across Australia over the last few years, what with big names like Jeanswest and Harris Scarfe folding up shop. Kmart apparently won’t be renewing their Northcote lease. It’s not the end though, no matter what you might think from the news. JB Hifi just recorded its strongest half-year profit to date:
Retail expert Amanda Stevens told Yahoo Finance that the electronics store’s surprising results aren’t that surprising at all given their customer service model.
“If you’ve been into JB Hi-Fi lately, it’s a fast-moving big box retailer, but they really have knowledgeable staff, which is always a sigh of relief for consumers versus other retailers you go into, and you could spend up to 15 minutes finding someone to give your money to,” she said.
And it’s something JB HI-FI’s group chief executive officer Richard Murray agrees with.
“I would like to thank over 12,000 team members across Australia and New Zealand whose hard work and continued focus on our customers delivered this result,” Murray said.
See that? Customers matter. Make it easy for people to give you their cold, hard cash. And make it feel good for them to do so.
Look at every day as a new start
Go to work with a vision. Have a goal. Keep your focus on the task at hand and never, ever concern yourself with the ‘what could go wrong?’ There are millions of things that could go wrong. You could have rolled under a bus at the age of 7, but you didn’t. Get a focus on the future and start going there NOW.
Advertise more, not less
When you think it’s time to cut back the marketing dollars, the smart players advertise more. Increase marketing efforts during slower sale periods. Fight for market share.
Generate buzz around your business
Whenever anything (I’d add ‘noteworthy’, but it doesn’t matter what you think – it’s only about what a journo will pick up) happens within your business, send a press release to the media. (‘Starship cleans floors on Tuesday’ will do.) Grab any free positive coverage possible. Use what you can generate a good buzz about your business. And be careful about how your business presents itself across any touchpoint.
It’s no longer true that any attention is good attention. Consumer activism is even more powerful than ever. However you call it – wallet activism, buycotting – people have been making more conscious choices about where their money goes to. Brand loyalty isn’t as strong as it used to be. If you’re doing stupid stuff, people will find out and leave for your competitor. Via the Washington Post:
In a report released Jan. 30, the firm surveyed 2,000 U.S. and British consumers who had taken at least one of nine actions in response to something that a company or brand did. Fifty-nine percent of these more activist-minded consumers said it was more important than ever to participate in consumer boycotts, while far more — 83 percent — said it was more important now to support companies they believe “do the right thing” and buy from them.
Even among those who had taken part in some kind of boycotting, a greater share said supporting companies with purchases (or “buycotting,” at 79 percent) was what mattered most rather than boycotting (62 percent).
You might have seen the about-face that Barilla did. Yeah, that pasta and pasta sauce brand that you’d have seen in the supermarkets. When its chairman, Guido Barilla, made homophobic comments on a radio station in 2013, social media ignited with outrage:
Amid calls for a global boycott, Colzani’s family and friends asked what he was doing running that sort of business, and members of his leadership team said they felt deeply uncomfortable. Harvard pulled the pasta from its dining halls, and major retailers in the U.S. and Europe asked to meet with Colzani to clarify the company’s stance. The list of celebrities pledging to shun the brand included Jodi Picoult and Chrissy Teigen, who suggested in a tweet to her 11 million followers that she would fund gay pornography filmed in a bathtub filled with linguine.
The actual market impact was low, but the brand’s CEO became concerned that the brand would be seen as out of date:
The radio interview effectively rescinded Barilla’s seat at the table with progressives, whom it needed to ensure the long-term viability of the brand. “I would guarantee that there would have been virtually no drop-off in sales, because capability—Does the pasta taste good? Is the distribution effective?—means more to the customer than character, which has more saliency with employees, retailers, and community partners,” said Rupert Younger, who leads the Oxford University Centre for Corporate Reputation and is a co-founder of communications company Finsbury. Instead, a typical betterment catalyst in cases such as Barilla’s is the landslide of staff—including senior managers—voicing their anger at the discriminatory statements, he said.
The turnaround has been fast:
Colzani called former colleagues for counsel and appointed a chief diversity and inclusion officer. He leaned on workplace consultants Korn Ferry for advice and formed an external advisory board. U.S. public-relations company Edelman was drafted to steer communications. Colzani started spending about $5 million a year devising an ambitious reputational turnaround. For the past five years the company has earned the highest possible score on the Human Rights Campaign’s corporate equality index.
Barilla is still trying to repair its image. Retailers that are less of a global powerhouse might do well to learn from its mistakes – and from its genuine efforts to make up for them.
Selectively improve your margins
Too often services for which customers would be willing to pay are provided free of charge, while services that customers don’t want, drive up prices. Ask people what they want. Run focus groups. Use a register card questions system. Achieving good service margins requires two things: customer needs vs. their willingness to pay. And that’s it.
Use strategy
Most retailers don’t. There are some exceptions. Bendigo-based Jimmy Possum (clean-lined, often recycled red-gum and messmate tables/side boards) has gone national with its strategy to be as different from other furniture retailers as possible (gotta love that approach)– no discounts, no sales and no airheads on the shop floor….
Don’t focus on pure price
Specialist retailers should forget about trying to compete with the big retailers on price, and instead focus on creating a niche. “A common trait between successful entrepreneurs is a passion for what they do and passion for the niche customers they are delivering too,” says Stafford at Smiggles.
Merchandise your store for sales
Use lighting techniques and creative displays to enhance the customer experience in-store. Play videos for product education, customer entertainment and any other up sell or promotional tie-in. Get your suppliers to help. They are only a phone call away.
Close on cross-sells – boost transaction size
Cross-selling is not exploited much in OZ. Update your crew with suggestive selling and up-selling techniques (Have you earrings to go with that skirt? – I’ve got some beauties over here…) to ensure that your store’s transaction size is the best that you can make it. This is an area in which many are throwing away trade. They are letting the punters walk out with money still in their accounts.
Distribute resources in a more targeted way. Improve your resource allocation. Segment. Add value-based, differentiated support concepts. That means check your local demographics and change the offers to your locals – different ads in local papers, different products on the leaflets….
Stay on top of freight and supplier costs
Many retailers are losing profit every day by not keeping up with current volatility. Agree to a meeting with the next dickhead that rings up from a courier company.
Go EDM
I love email. I love it so much I’d like to get in the back seat with it and give it a full-on tongue kiss. Who cares whether it will love me tomorrow? All I care about is now. Create a mailing list by asking for contact stuff from customers. Then send them something every few days. It’s free!
Social, social, social
Social media can feel a bit like trying to capture lightning in a bottle. It’s necessary in this day and age, though. If you don’t know how to do it well, get a professional to do it. Be polite, be consistent, and be responsive. Think of it as a further way to engage respectfully with your customers, like a digital shopfront with windows in to your business across Facebook, Instagram, and any other platform that’s relevant to your preferred audience. Social media does take work to do well, but if you put in the effort, it’d be as valuable to you as a good webpage.
Dominate a time or a day
On media, especially radio it helps if you’re on at a regular time. Boosts psychological effect and drowns out competitors.
Go wider or narrower or across the gap
If you’ve been focusing on your local area – try expanding your local paper ads to the next suburb too. Many don’t cross ‘natural’ boundaries like rivers or highways for distribution of leaflets. Now is the time to. Or if you’ve been advertising widely with diminishing returns, go more local and more frequent for the same money?
Go more in your face
Funnier, brighter. This is not the time to be subtle. Note I did not say discount. I’m suggesting you use better creative instead of just cutting margins more than you need to.
Meet competition
Yes, if they’ve cut prices you need to stay aware/competitive. But all purchases are about value, not price. Thrown in a set of steak knives (only kidding – but what about a smoking machine or cover?) with a BBQ?
Improve service
When competitors are trying to undercut you on price, make your service level a notch higher than them. Give much more than they expected. You might have to bend over backwards, but it pays off. Have your team wash their cars. Throw in installation. Ring them after they’ve bought and make sure they are happy. Satisfied customers are the linchpin of Word of Mouth.
Follow up on old leads
Take out any old inquiries that had not been converted into orders and follow up on every single one of them. Bring out old business cards, brochures or any other lead that you may have and start calling. Or get a pushy staff member to do it. You need perseverance, but keep on following up – you don’t have anything to lose. Keep in mind, like NOBODY in retail rings you. The cut-through is incredible.
Existing customers
Your existing customers will probably keep your business running during lean times. Take special care of them – your competitors will have their eyes on them too. Keep in regular touch. You might tease or reward them by offering special discounts or gifts as a token of your appreciation, but I wouldn’t take it too far – could look like you care too much. There’s a fine line between showing an appreciation for loyalty, and looking plain desperate.
Find new customers – do something different
Be more flexible. Take smaller orders. Do deliveries. Opening late at night–now is the time. Keep an open mind and bend your rules a little to accommodate them.
Consider more services for your customers – additional warranties, on-site service or telephone support. Give things away for nothing – free coffee or toilets? I’m convinced Maccas is the success it is must be somehow connected to the fact it’s the only place you can go to the toilet on a main road.
Destination point
Make your locations meeting places, greeting places. Start clubs. Get Mums to have coffee there. Bunnings has a sausage sizzle for local charities every week-end. I’d be more likely to turn up at a Home Hardware on a Tuesday arvo if I thought Megan Gale was going to be demonstrating what she can do with a roll of gaffer tape.
Smell nice
There’s something powerful about smell. People buy when the smell is right and don’t when it ain’t. Coffee works. Fresh bread works. Dog poo doesn’t and neither does fresh, ‘recently cleaned’ smell.
Feed them
Free sandwiches or a soup for $5 is better than 20% off a couch.
Meter maids
City Councils throughout Australia are doing their damnedest to hurt small business by fining people coming into your stores for daring to park on their streets. Plus, they make a fair quid in the process. Ruin their day by having your staff fill your customer’s parking metres. Works in Surfers Paradise.
Show movies for little kids
Young mums need to be able to shop but can’t take their eyes off their kids. The little buggers slide under forklifts or jump off balconies. You could help by entertaining them. You would be loved.
E-commerce on website
Get the fricking thing making money for you and stop stuffing around with e-commerce. Spend serious money on it. It’s here to stay. Grow up.
Be more relevant
If you’re not sure what that means, ask someone who cares.
Get together
With other retailers – run a shopping strip promotion. God knows TV air time is so cheap at present, little old High Street Armadale could be on prime time.
Retail other ways
You could do DM direct from TV – think about being the Demtel of furniture, the ab slider of fashion. Guerilla marketing’s all the rage now as well. Keep your mind open. You might surprise yourself.
Take the show to them
If you can’t get them to come into your stores, take it to where the punters are – go to markets, sport events. Let them see you, let them try your products.
Don’t say ‘it’s not our fault’
Or ‘it’s a sign of the times’. As a retailer, you are a predator. Think like one. The lioness does not blame the drought for her hunger – she just eats. She climbs a tree and kills a monkey instead of wasting days on the prairie looking for rabbits.
Retail is only selling stuff at higher margins than wholesale, with the advantage of convenience. In good times it’s great, in bad times it’s tougher, but it can still be profitable – remember, they still have to eat, their clothes wear out, their fridges pack it in, their kids want an iPhone. Someone, somewhere is getting their money. It is just who they buy it from that makes a difference, to you. But they are still brand conscious, still peer-influenced, still time-strapped, still tired. If you put yourself in a situation where it’s easy for them to buy from you, and they don’t feel ripped off, you’ll get the deal. You’ll keep the doors open. You might even be able to buy me lunch.
Article updated on 10 March 2020.