Retail Survival Guide: Adapting to Change - Nov 08

By Jim Dion

Many flooring stores are struggling with the grim outlook of the economy for the foreseeable future. While some argue that this recession is not going to stay for long (nine to 12 months at most) and it’s not going to affect consumers’ confidence in a dramatic way, others are voicing far worse predictions. I simply say that it does not matter!

I look at what’s happening around me and seek the opportunities that are always there. When business is tough, retailers have a unique opportunity to truly stand out and make a difference for themselves and for their consumers. After all, many studies have shown that in times of tight money, consumers don’t necessarily spend less. What consumers do, though, is spend their money more cautiously and wisely with companies that know how to reward them with quality and an extraordinary experience. And what’s a better investment now than an investment in your home? Yes, there are a lot of foreclosures going on and new homes are few and far between. At the same time there are millions of consumers who are not underwater with their mortgages and have money to spend on their homes.

I deliver lots of keynote speeches on consumer and retail trends around the world and one of the underlying principles for all trends is that in economies of abundance, it’s all about shopping for experience and excitement. I also teach that while you may not be able to own a category, such as biggest flooring store in town, you can own an experience that will excite your customers, such as best personalized service. Our economy, while in a downturn, is still an economy of abundance and it’s exactly these times when we feel uncertain about the future that there’s a desperate need for excitement and experience. Consumers need it and you need it!

So, the question you need to ask yourself is: “How can I excite my customer and deliver an extraordinary experience?” Here are ten things that you can do, both in your store and apart from it.

Create a traffic-stopping store. Start by checking your store’s prime real estate, or the first 18 feet as you enter your store, which is where you experience the most traffic. This area represents your best chance to sell and that’s where you’re going to place your best sellers and your impulse items to maximize your opportunity to sell more.

Research has shown that shopping is only 20% planned and 80% impulse, which means that by showcasing your best product strategically you can tap into that 80% of additional sales. Also, remember that humans are visual. If they like what they see, they buy. And it’s not just the product that they need to like. It’s also the ambience, the lights, the POP signage, the music, the packaging and everything else in your store. Look at your windows. What have you placed in them that would stop a customer and invite them in? Does your storefront have a catchy story to tell the passer-by? Do your signs tell a compelling story that helps educate, entertain, or simply make the customer dream?

Change your store frequently. Customers habituate to your store and after a while they stop noticing things. Have you ever noticed that when you move product from one part of the store to another, you end up selling more of that product? Sometimes, you even hear customers saying that they never thought you carried that product, when in fact you had been carrying it for a long time. It just was placed in a different section of the store! Change lets customers see your entire selection and gives them a reason to check you out regularly. So, move something in your store every day, and around the cash wrap even twice a day.

Keep it clean. As McDonald’s founder Ray Kroc once said, “If you got time to lean, you got time to clean.” You only have one chance to make a first impression. Customers will judge you in the first 20 seconds and if your store isn’t clean and tidy, they’ll often not take you seriously and even question the validity of your pricing. Stores that aren’t well organized and neat often appear to the customer to be less than professional, which then almost encourages the customer to bargain for a price. Assign cleaning duties to each of your staff and make sure that they don’t forget washrooms, fitting rooms and every other area that the customer might see. Everything must be neat and clean at all times.

The 90% success factor. Woody Allen once commented that 80% of success in life is just showing up. Well, I would argue that 90% of success in flooring sales is just showing up! Have you ranked your top 100 customers from last year? And have you contacted every one of them in the past two months? Even when you don’t have anything to sell them, you still should be on the phone every day just to touch base with your best customers. Do you have a spare 20 minutes each day? If you just set aside 20 minutes each day to make four five-minute calls, you can call all 100 of your top customers every five weeks. And if you use the next three weeks to call the next 60 on your customer list, you’ll be amazed how many conversations will result in business. There are so many little things that people forget, a hallway that needs a runner or a spare bathroom that needs updating. Just staying top of mind with your top 160 can make all the difference in the world. Try it for two months, you will be amazed! We have to call customers today—we can’t wait for them to come to us!

Get on the web. Use the web to communicate with your customers. Make sure to answer all e-mails within 24 hours. Also, make sure to include your company information on every web page, a location map if you have a store or warehouse that your customer may visit, hours, staff pictures and first names, product information, professional photos and any events you are having. Also, talk about your community activities, and present customer surveys if you are doing any. Make sure to change the site content frequently. Just like your windows, you need to refresh your site regularly to give the customer a reason to come back for something new and exciting.

If you are considering selling online (online sales are predicted to grow 70% in the next five years and you don’t want to miss out on this large chunk of business!!), you need to hire a professional company who can help you set up an e-commerce division that delivers a seamless shopping experience. This may include allowing customers to order online but pick up and return it at your store/warehouse if they wish to save shipping expenses.

Always look for new and exciting products. Remember, product always comes first in the minds and wallets of customers. If you have the right product, the customer will search you out. Because you’re supplying them with the product they want, they will still drive to you if your location isn’t the best and they’ll forgive you for little mistakes or service failings. Check your competition for trends in your industry and other industries, too. Remember, customers shop horizontally, not vertically. So, if you sell carpet, customers don’t just look at your products and think of similar items that they saw at a department store or other specialty store. They also think of the iPod that they just bought and how sleek and modern it looks and expect the same look and feel when they evaluate your products. There’s lots of creativity and innovation in all product categories, and design sets companies apart. Unless you have the latest and hottest carpet styles, you’re going to miss out with a customer who is raising the bar not just on service but on product, too.

Provide professional service. Connect with and educate the customer on your products’ benefits. Add on smartly. Thank them and ask how you can do more business with them in the future. Sounds basic? Think about how product presentations have evolved since the advent of the web! Customers conduct extensive research on the web and they come to your store more informed than some of your salespeople. Make sure your salespeople are ready for this challenge and know how to sell customers solutions for their needs instead of just products. Remember, when the customer knows more than you do, you’re superfluous; you’re only needed to hand the product to them. Constantly train yourself and your staff and keep the title of the most knowledgeable flooring store in the country.

Play “Give Me Five!” with your staff every opportunity you have. Ask your staff to choose five products that would go with each item in your offering for a total solution/total look. Then, ask them to think of what happens every day, with every customer at McDonald’s. McDonald’s is one of the best examples of a company that has made add-on and solution-selling part of its culture and store DNA. Crew members know that when you go to their restaurant you aren’t just there to buy a burger. You’re there to buy a meal for lunch, breakfast or dinner. Try to order just a burger! They will never let you do it. They will suggest something else until you say no. They also know that whatever else they’re going to recommend will go well with the burger. They aren’t going to recommend a recipe book because you aren’t there to learn to cook but to have a meal. What are five things that go with tile for a shower? If your staff practices “Give Me Five!” every day with every product that they offer, they will find it very easy to do it automatically and with every customer. Then every customer is getting the complete solution.

Have a clear return and complaints policy. Remember when I said earlier that customers shop horizontally? When a customer deals with your company and you tell them that they cannot return their product or they only have ten days to do so, what do you think happens? They start thinking about all the stores and websites where they able to return a product with no problem and wonder why you are not just like them. Your return and exchange policy should be as competitive as your product and pricing. Yes, you do have to watch out for what I call “bottom feeders,” customers who make a career of buying, abusing and returning product and expect to get their money back. With these customers, you are better off simply not doing business with them. How you handle returns will define you in your customer’s eyes. Track the bad customers and help your good customers.

Don’t forget the Yellow Pages and voice mail. Many customers still let their fingers do the walking and that’s why even in our age where the web appears to have supplanted every other advertising medium, the Yellow Pages are still used by a lot of consumers to find a local business. Are your competitors listed? Are you listed? Is it the right category? Here’s a tip: If one of your competitors goes out of business, you can have the calls to them directed to your store! Just offer to pay 25% of the Yellow Pages ad.

Also make sure to use voice mail. If a phone rings in the middle of the night in your business, does it make a sound? It should! And the voice mail message should be concise but complete and include business hours, location, and advertising about your new items. And remember, if you are with a customer and the phone rings or call waiting beeps, let voice mail pick up the call. Never leave a customer who took the time to come to your store or called you first to answer the call of another customer. The only exception to this might be if you notice that it’s your largest customer—then I might forgive you for taking that call!

Well, these are ten ideas and actions that you can take right now that will improve the customer experience in your store. Remember, every hour, every customer, every dollar counts. Don’t ignore or under serve anyone who visits your store.

BEING GREEN IS THE KEY TO SELLING GREEN

Tyler Paulson, vice president of Paulson's Floor coverings in Portland, Oregon and Mike Hughes, president of Kelly's Carpet in Omaha, Nebraska successfully run "green" stores. They agree that to win the environmental customer, you have to talk the talk and walk the walk. Paulson's has been in business for 87 years and Kelly's Carpet for 30 years. These businesses have a track record of making the right choices to create longevity for their stores.

For both Paulson's and Kelly's Carpet, a large part of environmental selling happens through advertising and community outreach before the customer walks through the door. By making their stores the local green flooring expert, Paulson's and Kelly's Carpet have done most of the work ahead of time. Environmentally conscious customers are more likely to shop in their stores, and when a green customer comes into the store, he or she often says upfront, "I want an environmentally sustainable product."

But for retailers who have not necessarily made "green" a main focus of their stores, there are still ways to promote green products. If a customer doesn't mention green concerns upfront, Paulson's sales staff asks about environmental concerns as part of the selling process. Along with questions like, "Do you have kids?" and "Do you have pets?" or "Are environmentally conscious products a priority for you?"

Hughes sells a lot of Dupont Sorona, cork, bamboo, and engineered wood at Kelly's Carpet. Paulson adds that, "Most of the manufacturers have jumped on board and offer green products." He sells Sorona and Shaw's green products, among others.

Often the customer who hasn't shopped for flooring in many years will assume that green products are more expensive than conventional products. Or she will assume that you have to buy wool carpet to be environmental. According to Paulson, "A big part of the selling process is communicating to customers that there are green options that do not cost more and there are many new and current options. If our environment is a concern for the customer, we can help her choose a floor of equal cost that is environmentally sound."

Paulson has integrated green products into every area of the showroom floor. He says, "In some stores, you will see the environmental products grouped in a back corner, but we have them dispersed throughout the floor in every area of our showroom." Making the green products visible is a key to highlighting the option for the customer. A point to hit home with a customer is that a green store helps the environment now by recycling everything pulled out of the home, and also helps the environment in the future by offering a well-trained sales staff that can help customers choose the right environmentally sustainable product to fit their needs.

According to Hughes of Kelly's Carpet, being green is a long-term investment, and it includes two things: Recycling everything possible and being an expert on green flooring products. When Paulson's Floor Coverings or Kelly's Carpet makes a sale, the existing flooring in the customer's home is recycled. Carpet, tile, hardwood, pad...everything is recycled. The stores as a whole recycle as well. This includes cardboard, plastic, plastic bottles, tin cans, documents, and more. Very little goes to landfills.

Both stores, through television and print advertising, describe their commitments to sustainability. So, for the environmentally concerned, these stores become identified as the "green" place to shop for flooring products. Paulson's advertising includes the statistic that the number two item in landfills is carpet, and it promotes the fact that his store recycles everything and adds zero carpet to landfills. This strikes a chord with his local community.

According to Hughes, "I wanted to differentiate our store in the market, and this is a way to do that and do the right thing at the same time." Paulson adds, "Many customers come through our door and thank us for our program. They pledge their business to us because they understand that we really care about the environment." Very few flooring stores have a full and total commitment to recycling, so when an environmentally conscious customer is shopping. many will be extremely loyal to any local store that is truly "green."

The green customer is also very educated and knows that just because you sell green products doesn't mean you're a green store. They are very concerned about putting anything from their homes into landfills.

Kelly's Carpet also hired an educator who visits local schools to promote recycling, and the local school systems in Omaha have been very supportive. Basically, the educator gives a talk to students about the benefits of recycling and exactly how to recycle. At the end of the talk, students receive a refillable water bottle and teachers get a cloth shopping bag. Both items display the store logo, sending a message and serving as a reminder to teachers, parents, and students that Kelly's Carpet is the place to shop green.

Paulson's Floor Covering and Kelly's Carpet began their major recycling programs about two years earlier. For Paulson's, it was a natural progression that began years ago will simply placing recycle bins at every desk. Hughes of Kelly's Carpet, watched a documentary on World War II, and something clicked. He says, "Back then, they were very conscious of this. Tin cans...baking grease...they reused everything and wasted nothing. I just thought we should get back to that."

According to Hughes, there aren't many additional costs to beginning a recycling program. What is saved in trash pick up cost can be put toward the program. In addition, many companies will pay for recycled items like cardboard, plastic, paper, cushion and carpet. The main expenses are the staffing needed to monitor what is put into the recycle bins, and the space to keep the bins.

For both Kelly's Carpet and Paulson's Floor coverings, it all boils down to doing the right thing. In this case, doing the right thing also happens to be good for business by creating a way to differentiate their stores from the competition.

--By Sonya Jennings

Related Topics:Shaw Industries Group, Inc., Coverings

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