Retail Excellence Takes Attitude, Innovation, Leadership©

Jeff Rogut
January 2012

The past few months have brought the retail industry into the spotlight in a way not really seen in recent years. Sure we had the scandals and takeovers, but things were going along pretty well, the economy was in good shape and customers were turning up to stores almost in spite of what the retailers did. Times were good so some inefficient retailers just had to open a store and customers would turn up. Real ongoing innovation within retail all but disappeared.

The suddenly the picture changed. The global financial crisis arrived and despite certain industries such as mining doing well, retail faltered. Our customers’ hands remained quite firmly in their pockets. Only today I read in The Australian “This points to continued wariness on the part of households, some of which reflects the lack of progress in resolving the European sovereign debt issues, together with softness in domestic house prices.” The November retail sales showed a flat trend in many industries, declining in others.

The only way to make a sale was to have a sale with deeper and deeper discounts. Supermarkets had bold catalogue front pages with ‘half price’,
‘buy one get one free’ and other offers not seen to that discounted extent. Established retail names started to fold. And the blame game began.

As a retailer of almost 40 years, having started working part time when still at school, I always saw retail as an exciting place to be. There was always something exciting happening – new products, the novelty of buyer’s specials from overseas, BIG once a year clearances, constant changing of the store and layouts to be more appealing to our customers and changing seasons, staff offering friendly and helpful advice and service.

But what happened? Simplistically, it became too easy. Successive governments, through what I believe was a failed competition policy, allowed the dominant retailers to become too dominant across many areas. Unfortunately some retailers also just allowed this to happen.

The leadership which we saw in retail by real merchants and retailers all but dried up to be replaced by financiers and corporate offices who saw bigger, and more of the same as the answer to what customers were looking for. And in some cases it was – particularly in the home improvement and supermarkets channels – cheaper, imported goods, one stop stores, and in many cases the demise of competitors who could not match the deep pockets of the majors.

In the convenience channel we have seen new formats and brands emerge largely led initially by 7-Eleven which started back in 1977 and changed the way the ‘service station shop’ was perceived. But even in our growing channel innovation declined in the mid 1990’s and has only picked up again in recent years as the threat of reduced tobacco sales, and the growth of supermarkets with their discount petrol dockets has been felt.

And then suddenly we had the internet. I say suddenly being the sudden way in which many of our leading retailers woke up to both the power and threat of the internet, yet hugely underestimated the opportunity which the internet brought with it. The spirit of innovation, or leadership was missing amongst many retailers in this emerging channel of business.

Company managers, some indeed the founders or even owners, forgot to lead.

Retail stores will always be there….won’t they?

We began to hear all the excuses as to why business was down in very recent times.

‘The internet and overseas product suppliers are hurting us’, many wailed as times toughened. I wonder if these retailers are really in tune with their customers [or maybe ex customers now].

Do they read the feedback on social media websites or even in mainstream media sites and appreciate the anger and frustration that customers really have? Do they ever shop in one of their own stores and experience what a normal customer does? And would they return to that store having had that experience?

I am both a retailer and also a customer and could write pages, as many of you could as well, on some of the shoddy retail experiences we ask customers to put up with, and maybe only a few lines on the really excellent experiences to be had.

And there is no real distinction between large and small retailers when it comes to customer care, whether it is an electronics store, hairdresser, hire store, office products etc – all have some good but many poor examples.

So what do we need to refocus on?

From my observations and discussions with retailers and customers, Retail Excellence Takes Attitude, Innovation, Leadership.

Attitude from the top – that’s where the business culture starts. Who are the retailers driving retail excellence through their organisations rather than just focusing on their share price and bonus? Who are the retailers that staff look forward to seeing in their stores to interact with, complimented or even picked up if customer care is anything but excellent? Who are the retail leaders admired and emulated as role models? These leaders do not have to be the ‘boss’, but through their attitude to their customers, colleagues, suppliers and all whom they encounter are seen as leaders. In retail skills can the taught and rewarded but having the team with the right attitude is priceless.

Innovation at all levels that are important for the customer – sure an innovative office or staff environment may please staff but what benefit does that translate to for the customer? When was the store, or website, last refreshed in a way that was not just following a competitor? When was the last time you cam across a great shopping experience that embraced all the senses? When was the last product released that was real innovation and not just a line extension, variation or minor change to an existing product? When was staff asked their opinions on how they would treat customers to keep them loyal – and then the ideas implemented? Real innovation is something that customers will pay for, is very profitable and does not have to always be on sale. The equally important ‘I’ is Insights – what are customers really thinking, what that are their real needs now, and how can you anticipate and act on what the future might bring. Insights aid innovation.

And finally Leadership – acting like a leader, not just locally, but globally – this is the new retail reality and in increasing cases who you are being measured against. Customers can choose to buy from almost anywhere in the world now – why should they give you their hard earned dollars? Leadership does not come with incumbency (just as some of the big names who are no longer with us or are on their way out). New entrants in a market can quickly be perceived as the leaders if they have the right retail offer, and those that simply follow will be left with few choices. Leadership also includes the store, merchandising, website, private brand quality perceptions, being an employer of choice, not last resort, and critically, how well everyone who comes into contact with the brand is treated.

RETAIL…… one word, six letters, but endless possibilities.