DMSRetail

Knowing how much a customer is worth to you over the long-term is the best way to convince yourself and your staff to become more committed and determined to treating your customers right and keeping them happy.

Calculating the lifetime value of a customer is reasonably simple. Take the example of your local grocery store. A typical family of four will spend approximately $175 each week on groceries. Given that they are on vacation for two weeks a year, and say they are away for other reasons for another 2 weeks, that means they will shop at their grocery store for 48 weeks each year.

Over the course of a year, this single family will spend approximately (48 x175) = $8,400 at that grocery store. Now, let’s assume that the average family stays in their community for 15 years. Without taking into account inflation or the time value of money, that one family is worth $126,000 ($8,400 per year times 15 years) to that grocery store.

Now imagine the quality of service — be it speed, friendliness or special treatment – that family would get the next time they bought groceries if the cashier knew they were worth $126,000 to the store (not just the $175 they were spending that day). It would probably be much better, wouldn’t it?

Suddenly, when you and your staff realize the lifetime value of customers to your business over the long-term, making decisions to benefit them (and not just your short-term interests or profits) become much easier. Take the time to figure out the lifetime value of YOUR customers. You might be surprised.

All the Success

DMSRetail

PS. Checkout the website for additional insights, tools and resources:

More articles like this: http://www.dmsretail.com/ViewPoint.htm

Courses:   http://www.dmsretail.com/retailmanagementcourses.htm

Success Guides: http://www.dmsretail.com/retail-success-guides.htm

Ultimate Resource:

http://www.retailmanagementportal.com/retailsuccesscollection.html

If there is one lesson to be learned from Target’s massive failure in Canada, it’s the fact that solid management and leadership ability are still the most important ingredients for success.

We must also understand that not every manager who is running a retail business is equipped with the innovative ideas and tools…or, even the fundamental and necessary ideas and tools… to make sure their operation becomes or remains successful.

A lot of retail managers keep doing the same things, over and over again, expecting different results. By the way, this previous sentence is widely recognized as the definition of insanity.

A lot of retail managers are running around talking about, and seeking information on, the latest and greatest technology, when their very foundation of infrastructure type systems are not correctly in place and may, in fact, be crumbling.

And there seems to be a malaise that affects most retail managers causing them to avoid the study of better and more effective strategies, tips and tactics. It may even be a degree of arrogance among retail managers … everyone thinks they know everything already.

How do you break this vicious cycle?

You need to inject different ideas.

What kind of ideas?

Ideas that have been time tested and proven. Yes, apply the proven ideas first just to be on the safe side. There will be plenty of time for innovative ideas once the solid foundation is built.

Where do you get these ideas?

From people who have been there and done it successfully. They may, or may not, have gotten the T-shirt.

We are those people. But, we don’t expect you take our word for it. You can check out hundreds of testimonials on our website.

So, if you want to get some sharp ideas that will actually MAKE a DIFFERENCE, join us for the

Retail Success Tips & Strategies webinar this Wednesday, January 21, 2015.

If you register and then find that you are unable to attend, for whatever reason, we’ll send you the recording.

Admittedly, it is not free, it is not even cheap, but that’s how life is.

Good things are usually not cheap. But, one thing I can guarantee is that you will recover your investment 100 times over if you implement even one strategy from this webinar.

All the Success!

DMSRetail

PS: Don’t procrastinate…sign up now. Go here to sign up.

So, by all accounts a really good retailer in the USA, Target is a bust in Canada!

Who would have thought that Target would have to close up shop, literally, and leave the country? As all the reports say, Target’s missteps into the Canadian market will become case studies for many future students of retail management.

And, rightfully so. However, while many are busy listing the reasons why Target Canada failed and are suggesting various solutions that would have saved them there is really only one thing that went wrong and it is critical that the  case studies focus on this or nothing will be learned.

Target Canada was a victim of bad management. Everything else stems from that fact.

Yes, the supply chain was an issue, and they didn’t do a good job managing expectations regarding pricing and they didn’t have a web presence, and some of their Zellers locations were duds (and better management would have realized which ones they were and steered clear of them for a while) but none of these things would have happened if Target Canada was managed by someone with better skills.

It’s really that simple. The things that went wrong were not natural disasters, nor were they things that   were impossible to foresee. The fact that they were not foreseen means someone (or everyone) was asleep at the wheel…or the switch, or whatever you want to call it.

I have seen no end of reports written – and sometimes pictures -about the empty shelves and the missing Canadian Target website. I even saw one report that said Canadians simply haven’t taken to one stop shopping yet. Excuse me? In the great, white north where cold winters are long and harsh…Canadians would rather run all over town getting in and out of their cars to shop in several different places? I think not.

And, even if it were so, then it would follow that Wal Mart is leaving Canada also, right? No?

That’s what I thought.

There are the reports that Target couldn’t compete with Wal Mart and Costco. And, in the USA these competitors do not exist?

Oh, and according to some…they couldn’t compete with Sears Canada and Giant Tiger. Seriously?

When Target first announced that it was coming to Canada, Canadians were thrilled with the prospect. Many of us have done lots of shopping in the USA and are no strangers to Target.

Naturally, expectations were high…we knew what to expect of Target based on our experiences in their stores south of the border. So, when they showed up in the lousiest of old Zellers locations…with empty shelves and higher prices, it was disappointing.

Quite a big let down, actually.

So, what is it? Are they just lucky in the USA? Why do they do well there and tank here in Canada? And, no one should settle for a list of all of the ‘things’ that went wrong being the answer to that question. It’s, at the same time, more straight forward and much more complicated than that.

Some more important questions: Who made the decision on who would be in charge of the move into Canada? And, what was that critical decision based on? There are some who say it was arrogance – that Target USA saw the move into Canada as a slam dunk…or like taking candy from a baby. Either way, bad management is still the issue.

The big questions have to be answered by people at the highest levels of Target. It would be a huge mistake for them to list the reasons why things went wrong, clean up the mess, take their financial lumps or write offs, and leave it at that.  If they do, they’ll be none the wiser in future and this multi-billion dollar lesson will be wasted.

The case studies that are developed must not only focus on the ‘things’ that went wrong. They must focus, first and foremost, on the quality of management and how the lack of high caliber management was, in fact, responsible for the disaster that was Target Canada.

I can hear it already. Some people will quote Murphy’s Law and others will say “stuff happens… you can’t put all the blame on management”. Well…why not? Is it not reasonable to expect the management of a company to know what they face when undertaking something as important, and expensive, as a launch in a new market that just happens to be in another country?

Should they not have examined the supply chain situation just a bit closer seeing as so much would be riding on it? Should they not have sought out better intel from knowledgeable resources, about Canadian shopping habits; about the importance of a Canadian web presence; about locations that are dead or dying? And, so on?

It’s understood that hindsight is 20/20. And, if a couple of things were overlooked and then identified as problems and corrected quickly enough to save the day, then we might just be able to say that management did its job. After all, no one is perfect.

But, that is not the case here.

Do not be tempted to make excuses for poor management. We must insist that management be accountable. Always. Everything else being equal, caliber of management makes the difference between the success or failure of a company. This is where the case studies need to focus.

Too many retailers and, in fact, companies in general just do not pay enough attention to who they give the keys to. Or, the major projects… the tough but exciting jobs.

I had major surgery once. Do you think I chose the Doctor by asking who had been around the longest? How do you suppose that moon landing teams are chosen? Seniority? I seriously doubt that. Just about any serious endeavor requires good people…some would say the best people. Never the ones that happen to have been here the longest with that being their only qualification or claim to fame. And, certainly, never the ones that just happen to be willing to relocate.

A major project with a lot of shareholder money riding on it is serious business. Target executives, I’m pretty sure, are aware of this. So, how could they fall into this trap?

It does seem that retailers, in particular, tend to promote, and keep promoting, the employees who have seniority – whether they’re any good or not. Sometimes, the only reason they have been around so long is because they aren’t really that great and they know it. Of course, they stay. Usually, these individuals are serious ‘yes’ people because to be anything else would be detrimental to their long term career plan. Often, they do not have the knowledge to be anything other than ‘yes’ people, either. Remember, I did say sometimes.

There is no doubt that experience counts. If a long term employee has proven him/herself to be a great leader and has the other attributes that make him/her a good choice for the big project – like taking your business to a new country – then that person may be the perfect choice. If the person was the perfect choice, or even just the right choice, then the team s/he chose would also have been, at bare minimum, competent and in all likelihood strong players and we would not be talking about Target Canada in these terms today.

It appears that key management players who were involved in this unmitigated failure were (some still are) long term Target employees. Whatever the case, someone who should have known better, wasn’t thinking all that clearly when they put Team Target Canada together.

All the Success!

DMSRetail Team

PS:  The Retail Operations Management Workshop and the Retail Category Management Workshop take place in Miami in February. Click the links for Dates, Program Outlines, Fees, etc. Register soon to avoid disappointment.

PPS:  We’ve just completed our 6 month Schedule of Workshops. Send an email to training@dmsretail.com to request a copy.

If you’re anything like us, you get too many emails that are not relevant to your business, or not relevant to your business at the moment. So, you spend a lot of time pressing the delete key.

But, every so often you get an email that gives you food for thought, or a little piece of advice that really hits home with you; helps you with something you’ve been struggling with for a while.

This is the time of year when many retailers are taking a long, hard look at their business results for the previous year and start making plans to ensure this year is better. Regardless of what the previous year looked like, you’ve got to do better this year, right? That’s the way to grow our businesses…keep doing better in comparable stores; maybe add some new stores, or even some new revenue streams.

The idea is to go forward, in any case.

It’s tough to keep the forward momentum going, year after year, without getting some new ideas, advice, practical tips and how-to’s. Things are always changing and we need to be on our toes all the time to stop us from rolling backwards or, even, from maintaining the status quo.

We want to help you with that forward momentum. We have a wealth of information you can use, right now, to ensure your business is flying and not dying!

For instance, you would be a rare retailer if you don’t have at least a few problem employees. You may already understand that you have them because your hiring practices aren’t as sharp as they might be. Perhaps a lot of canned questions are being asked during interviews which, of course, leads to canned answers and you and/or your management people aren’t getting at what you really need to know about the applicant making it impossible to predict what they’re going to do for your organization.

Here are a few Questions and Tell Me’s designed to get right to the heart of the matter. Ask these and you will learn a lot. If the candidate gives really short answers…you’ll have lots of information to use to drill down. Any retail candidate should have no problem with these. If they do, head’s up.

Customer Service Orientation

What basics do you think the customer has the right to expect when in your store?

Tell me a few things about telephone etiquette.

What are the elements of a positive shopping experience?

Ability to Sell, or Coach Others on Selling Skills

What are the steps in the selling process?

Elaborate on those steps as much as you can.

Do you consider yourself a good salesperson and, if so, what indications do you have that support

your answer?

And, of course, it’s always a good idea to hand the candidate your pen or notebook or other object and have them sell it to you.

Attitude

How important was your personal contribution to the goals and objectives of the business unit

you last worked in?

Can you give me an example of a company procedure or policy that did not make sense to you?

How do you communicate your agreement/disagreement with company initiatives?

Relationships and Team Building

Tell me about your past relationships with your subordinates/peers.

Tell me about your past relationships with your superiors.

What type of Manager would bring out the best in you?

We hope you found this helpful in some way. You’ll find these interview tips and questions along with the expected and acceptable applicant responses and much, much more in our Ultimate Retail Success Collection and you can check it out here.

Stay tuned for tomorrow’s installment.

All the Success!
DMSRetail Team

PS: The Retail Operations Management Workshop and the Retail Category Management Workshop take place in Miami in February. Click the links for Dates, Program Outlines, Fees, etc. Register soon to avoid disappointment.

PPS: We’ve just completed our 6 month Schedule of Workshops. Send an email to training@dmsretail.com to request a copy.

This season, when you can expect to see heavier traffic volume in your stores, try a laser focused approach on the sales floor.

Often, during these busier times, you expect that customers will outnumber associates by quite a lot. While it’s a wonderful problem to have, there are certain things you must do to make sure that you are able to take full advantage of it; make order out of the chaos and reap the rewards in terms of sales -conversion, average sale per customer, average units per customer, etc.

Without direction, associates can get caught up in the whirlwind of activity with the resulting sales achievement being significantly less than what it could be. This might be a natural occurrence and may not necessarily be because your associates are doing something wrong.

What they need is continuous guidance, direction and coaching on the sales floor. With proper sales floor leadership and direction in place, your customers will enjoy shopping in an environment where everything is well managed. They’ll be able to get in and out fast, so they can move on to other things they need to accomplish.

They’ll enjoy being served (and sold to) by competent, happy, knowledgeable associates and getting their questions answered quickly. And for those customers who don’t want to take care of their shopping quickly – the ones who enjoy spending time choosing just the right items – your associates will be there for them too – providing exactly what they need.

A Sales Floor Director is not a luxury. The Store Manager, Management Person in Charge, or other designated management person must be free to perform the function of Sales Floor Director during busy times. This role cannot be delegated to just anyone..choose the person carefully. The sole purpose of this function is to increase sales by making sure all associates are properly employed and free to do their jobs – sales associates, cashiers, runners, greeters, etc. This means the Sales Floor Director must be aware of everything that is going on in the store at all times and must act to remove potential obstacles to performance. Clearly, customer’s will benefit from this organized approach during a hectic time.

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Store Manager’s can get super organized for 2015. The Store Manager’s Organizer is only $19.95.
No waiting – get it delivered to your inbox… today! Use it year after year!
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Here are some guidelines for your Sales Floor Directors:

• Keep moving around the store.
• Have a system for being kept informed of the store sales, and conversion rate, on an on-going basis.
• Always be facing the front of the store so you stay up to the minute on the traffic entering and exiting.
• Set up a signal system that associates will recognize – perhaps a slight nod – to acknowledge and assist a customer.
• Be aware of who is doing what at all times.
• Be on the lookout for fixtures that are sold down so you can tell the designated individual to replenish. And then follow up to ensure it’s done quickly.
• Watch for bottlenecks at the cash desk so you can take action. Actions like: a) calling a bagger to help out b) calling another cashier to the desk c) instructing a runner to go for supplies d) spending a moment chatting with customers who are waiting – taking their mind off the fact they are waiting.
• Check all areas of the store, regularly, to ensure cleanliness and safety.
• Watch for associates who are finished doing what they were doing and have not yet engaged in something else that is productive. Give them a new task or point them toward a customer.
• Let all associates know that they can, and should, look to you for guidance on any problems that come up. Let them know you are there to ensure the smooth operation of the sales floor providing the very best service to customers and that nothing is more important to you.
• Tell associates to let you know if they are leaving the sales floor for any reason.
• Stay on the sales floor. If you absolutely must leave the sales floor for a short time, appoint someone to take over.
• Review the schedule regularly. Change it if necessary. Lunch and break times must be adhered to unless you make a change.
• Above all, keep the associates motivated – be a Cheerleader and share information!

Converting shoppers into buying customers is much easier when a Sales Floor Director is on the job – removing obstacles and directing virtually everything. There will be fewer customers who leave without buying because you’ve made sure that they were greeted and welcomed into the store, that all products/models/styles/sizes that you have available are actually on the sales floor, that the environment is clean and safe, that associates are pleasant, calm and available to attend and sell to each and every customer and that the checkout lineup is under control.

Basically, you have provided a great shopping experience in an otherwise hectic and chaotic time and you will be rewarded with higher sales through increased conversion, average sale per customer, average units per customer, etc.

The Sales Floor Director is a ‘must have’, particularly at busy times. If you want to capitalize on increased traffic in your stores, try it.

All the Success!!
DMSRetail Team

PS: Here’s that link, again, for the Store Manager’s Organizer .

PPS: Check out DMSRetail’s Ultimate Retail Success Collection.

Reminder: Reserve your seat now for the Retail District Management Workshop and/or The Retail Operations Management Workshop in Miami in January 2015 and get the new year off to a great start! Go to http://www.dmsretail.com/retailtraining.htm or Send an email to training@dmsretail.com to inquire.