Apple Box stores Business culture Buy Local Competition Creativity Customer relationships customer retention Customer service ECommerce Retail Small Business Strategy websites

Showrooming and the sales prevention department

Last time, we discussed the often forgotten reason for showrooming that happens after price shopping: convenience and time/fuel savings.

Remember Kübler-Ross’ five stages of grief? If you’ve forgotten, they are denial, anger, bargaining, depression and acceptance.

When applied to showrooming, it isn’t much different. Acceptance and the clarity that accompanies it are where the sales live. Even big retail is figuring it out.

Big retail embraces showrooming

Big retailers are starting to embrace showrooming because they’ve realized that reacting to and/or punishing it has proven ineffective. Learn from their mistakes, research and investments. Customers who showroom are likely to be better informed shoppers that you don’t want to lose. Their phone might help them decide that your store is the right place to buy.

Retailers that welcome the smartphone shopper in their stores with mobile applications and wi-fi access — rather than fearing showrooming — can be better positioned to accelerate their in-store sales – particularly with the holiday shopping season approaching.

Shoppers armed with smartphones are 14 percent more likely to make a purchase in the store than those who do not use a smartphone as part of their in-store journey. – Deloitte study for Saks Fifth Avenue

Most small businesses don’t have the resources to embrace showrooming with a smartphone app, or don’t think they do. If that’s the case, what do you do?

The simplest answer is to side with the customer. Do this by making the in-store experience so much better than anything anyone can provide online. That’s where it pays to visit an Apple store – where nothing is like retail as you typically see it.

The last Apple store I visited was in Portland. In an average-sized mall store, there were 28 employees on the sales floor – and all of them were with customers. I thought this was odd, so I tried another Apple store.

Same thing.  There were over 100 shoppers in the store. Almost all of them were in groups engaged in a conversation while they used an Apple device. Many of those conversations included an Apple staffer.

The sales prevention department

Compare that to the shopping experience in a typical consumer electronics store.

Try to test drive a Kindle. It’s locked in demo mode. You can’t pick it up and hold it because of the security device and short “don’t steal me” cable attached to it.

The display of the device is focused on theft prevention. Why is this a bad thing? Because theft prevention becomes sales prevention.

In an Apple store, nothing’s locked down. Sure, there are lots of people around to make sure you don’t walk out the door with that fancy MacBook – but the products are presented in a way that is clearly designed to encourage you to pick them up and try them out.

Unlike most stores that sell laptops and tablets, the devices aren’t cabled down, nor is there a password protected screensaver that prevents you from doing any real examination of the machine.

They make this happen because no matter what you do to the device, at the end of the day, they have systems in place to “wipe” them and reset them to out-of-the-box new condition, software-wise. This assures that the next day’s sales aren’t impacted by what someone might have done to a device. They can also reset them during the day if someone went really crazy.

It’s almost unfair to sell against a setup like that. Perhaps that’s why Apple’s retail sales per square foot are higher than anyone else’s – over $6000 per foot.

What’s different?

If you’ve ever visited an Apple store, you’ve never seen a dead machine, much less one with a message that tells you it needs attention from a technical person. You won’t see a locked screensaver.

Now think about other electronics retailers. Their sales floor machines are locked down that you can’t do anything and there’s almost always one that’s off in never-never land, waiting for some tech help.

Step back a few paces. This isn’t just about Apple, laptops or tablets. It’s about encouraging someone to engage with your product, thus *enabling* a purchase.

No matter what you sell, ask yourself these two questions:

  • Are your displays focused making it easy to fall in love with a product and buy it?
  • Are your displays focused on controlling the sales process and preventing theft?

Making it easier to buy is something every one of us can do. It’s price-based showrooming’s Kryptonite.

Automation Box stores Business culture Competition Customer relationships customer retention Customer service ECommerce Retail Setting Expectations Small Business websites

Forgotten: What happens after they showroom?

Plastic supermarket carts.
Creative Commons License photo credit: Polycart

The last time we talked about showrooming, I referred to a Harris Poll that exposed a conflicting behavior among shoppers.

The behavior? “Most” people (70%) say they showroom because of price, yet they often buy locally even if it means having to pay a slightly higher price.

That’s right, 70% didn’t choose solely on price. Once again, buyers say one thing, but when convenience and access to local expertise enter the picture, they often behave differently at purchase time.

The survey’s findings echo my buying tendencies – which surprised me a little. Shopping is not an endorphin releasing event for me. I’ll *always* buy from a store that is easier to get in, find what I need and get out of, even if it’s a little more expensive than a competitor whose shopping experience is cumbersome, time-consuming or just plain difficult.

Do you feel the same way about the brick and mortar stores you visit? If so, why would you expect your customers to feel any different when they compare shopping locally to shopping online?

In the last piece, I didn’t mention that the WalMart moving boxes were cheaper. What I did tell you was that they couldn’t tell me if they had them in stock unless I placed an order and waited “a few hours” for an email or a text message. Not convenient.

Claiming that price is the sole or dominant cause of showrooming appears to align with how people shop early on, but it seems research “forgets” to follow behavior all the way to the actual purchase. Recent research is showing that showrooming starts because of price but continues for convenience – so be careful about discouraging it.

That good shopping experience

Can shoppers have a “good shopping experience” at your online store? Can they buy and have it delivered? Can they have it reserved and ready to pick up?

You might be thinking “What a hassle. I never had to do this before. Why should I start now?“ While you’re probably right, that’s exactly what big box online stores hope you’re thinking.

Have you asked your customers if they have a smartphone? Have you asked them if they use it to visit your store? Have they ever walked into your store to buy something and found you didn’t have it in stock?

What seed does that plant in their mind? What will they think about coming to your place the next time?

These things matter everywhere, not just in urban locales. Fuel and time are costs people like to avoid. When your store or website causes them to waste either one, it doesn’t help you to become (or remain) the main place they shop.

The moving boxes again

Remember that cumbersome moving box shopping experience I mentioned earlier? What happened *before* I drove to Home Depot?

  • I ran out of boxes…but it was more complex than that.
  • I ran out of boxes in the evening when my local stores were closed.
  • I ran out of boxes on a holiday weekend when the local UHaul stores were closed.
  • I shopped at another big retailer’s site that couldn’t tell me if they had boxes in stock.
  • I shopped at Home Depot’s site, which told me exactly what they had (and didn’t).

My experience online reflects some of the complexities and frustrations of your customers’ lives when they shop in your store.

That frustration is also what drives people online – where they are often frustrated by your web store.

Take everything away that a local store can provide that online shopping rarely provides – and you’re left with the local equivalent of, without reviews and (probably) with a slightly higher price.

Is that what shoppers want? What aren’t they getting *prior* to making a buying decision?

Just looking

Think about why we say “Just looking” when we enter a store. Sometimes it might be because we’re just looking, but we often say it by reflex. If you really are there to buy something, I’ll bet “Just looking” pops out for one of these reasons:

  • Because most of the floor employees know less about what we came there to buy than we do.
  • Because you’ve already done your research and made up your mind.
  • Because you don’t want someone following you all over the store.

Is that why your customers say it?

attitude Competition Corporate America CPSIA Entrepreneurs Ideas Leadership Management Positioning Retail service Small Business Strategy

Watch out for those kids

They just don’t know any better and they’re the ones Seth is talking about here.

They don’t know that you’re supposed to dominate your industry and they are supposed to respect your dominance just because your daddy or great-grandpappy started your business 50 or 100 years ago.

They don’t know that they are supposed to adhere to 2, 20, or 200 year old rules that rule your market for reasons no one can remember, much less explain.

All they know is…they can do it better. And without all your baggage.

That’ll be $40 for 2 bags, sir.

But…not all of them have that baggage. Some see past what everyone else is doing.

Like Toys ‘R Us. Yeah, a nationwide box store.

We’ve talked about how the CPSIA has dealt a tough hand to small lot, one-of-a-kind (OOAK) and handcrafted manufacturers of toys and childrens’ clothes (and a zillion other things for kids under 12).

Most of the noise has come from small businesses, even though the big stores have to deal with it too. They have some upside vs the little guy because their lot sizes are large and they can wield power with suppliers. (Or they’re like Mattel and get an exemption…but we won’t talk about that today)

Despite all the inane things that a lot of these big chains do, this one was different.

They were smart enough to do this.

Most big box stores don’t have the brass to do that.

Be different AND better

For example, when most big box office stores have a big sale whose volume is controlled by how much stuff you can cram into a sack, they exclude a bunch of stuff – usually expensive stuff. And they only let you have one bag.

Guess if I wanted to buy enough expensive stuff to fill 10 bags that might tick em off? I guess I’ll just get it somewhere else.

If they had a trade-in sale, they’d normally limit it to 1 item and require purchase from a specific list of replacement items.

Not Toys ‘R Us.  Their trade-in event appears to have no limits.

Just like those 3 kids who just decided to start a company…in your market.

attitude Business culture Competition Corporate America Customer service Employees Leadership Management Motivation Sales service Small Business

Bad business is just dumb, even in the “worst of times”

There’s a REASON why Best Buy is staying open and Circuit City is not.

And it has nothing to do with the economy.

Today’s guest post from CNET’s Don Reisinger says it as plain as day.

Just plain dumb.

Community Competition Corporate America Leadership Positioning Pricing Small Business Wal-Mart

Buying local: Bigger than the bailout

In today’s guest post, America’s Best Companies made a series of videos that do a great job of illustrating the potential impact of box stores and similar entities on a community’s small businesses.

I think they’re worth sharing, so here they are.

Each of these videos are about 90 seconds long, or thereabouts.

Food for thought, my friends. Where are you spending your money?

Britney’s Lemonade Stand, part 1 (1:26)

Britney’s Lemonade Stand, part 2 (1:37)

Britney’s Lemonade Stand, part 3 (2:06)

Britney’s Lemonade Stand, part 4 (1:45)

Britney’s Lemonade Stand, part 5 (1:43)

Competition Customer service ECommerce Employees Management Restaurants Retail Sales Small Business

Beating the franchises and box stores: Are you making it easy to buy?

If you’re competing with a franchise or a box store like Starbucks, WalMart, Costco, Best Buy or similar, one of the best ways to stand out from them is to combat one of their biggest failings: They make it extremely difficult to buy in an environment that built to offer the illusion of easy shopping.

It’s particularly true for higher priced items, or items that require some level of technical knowledge and enthusiasm, such as – but not limited to – handheld HD video recorders, digital SLRs or computers.

Of course, they make it easy for the local computer or video store to differentiate in 100 different ways as long as it isn’t price. Local stores can’t often compete with national box stores and mail order houses on price, so they have to find other ways to do so.

Think about the purchasing environment in these box stores. Despite what they try to make you think, it isn’t laid out to optimize sales. Instead, it’s designed to reduce employee staffing requirements and minimize losses. Sounds kinda like a Presidential campaign:)

Want some evidence?

  • Selling computers: Computers are all password protected so you can’t begin to see how well they work, much less if they are suitable for the job.
  • Selling video and digital cameras: Video and digital SLR cameras are cabled to the countertop.
  • Selling video and digital cameras: There’s nothing to photograph, other than a bunch of gear under lovely fluorescent lights.
  • Selling video and digital cameras: There’s rarely anyone there who knows a Fstop from a Fbomb.
  • Finally, there’s no one who is truly a specialist on the gear they sell, and only a few people who have a smattering of knowledge – if you’re lucky (and if they work that day).

All those things are fine if you have done a pile of research and know exactly what you want. To be sure, many people do just that because they’ve gotten used to the lack of support/help at these stores.

Have you ever asked a question in a franchise or big box retail store and found that the store’s expert on that topic (if they had one) knew less than you did?

Of course, they might just order online rather than waste 30 minutes and $10 worth of gas to drive to the box store. If they do that, you know where they’re going – the cheapest place they can find online that has a reasonably dependable reputation.

Why? Because the stores have already forced them to do all the heavy lifting. After all that, they’re tired.

But there are others out there who want a resource. Need some advice. Want to try the gear out before they buy it, just to make sure.

If this is the best method for selling things and creating a relationship with a customer that lasts and lasts, why don’t you see the following?

  • A car dealer who allows test drives as long as you don’t leave the parking lot.
  • A jeweler who won’t let the lady try on that big engagement ring.
  • A Chanel store that has no tester bottles.
  • A camera store that leaves the gear locked in the glass case and expects you to make a buying decision by ogling it through the glass.
  • A grocery store that doesn’t allow you to thump a melon.
  • A florist that doesn’t let you smell the flowers.
  • A bookstore that doesn’t let you browse or sit and read a book.
  • A software company that doesn’t offer a downloadable demo or trial version.
  • A coffee shop that smells like candles.
  • A hardware store that keeps tools and other trinkets locked up like cigarettes at the grocery store (while you do see this at Home Depot, you don’t at Ace).

Yet that’s exactly the kinds of things that many stores do.

They put up a glass wall between the customer and the merchandise. That wall makes it hard to buy unless you know exactly, precisely what you want. They force you to be the expert, offering little or no expertise for prospective buyers seeking advice in their store.

Now think about how some other big retailers who make it easy to get in the mood to buy. Apple stores. Barnes and Noble. Talbots. Nordstrom. Some locally owned stores have picked up on it, but many have not.

Maybe you don’t have a brick and mortar store, but instead have an online store. That doesn’t mean you don’t have similar issues challenging you.

Ever been in an online shopping cart that just makes you want to scream? Sure you have. Now think about the last experience that was so simple and pleasant that you were tempted to buy more.

Whether that experience was online or in a brick and mortar retail store, the rarity of that experience sticks with someone. If they don’t have that experience with your business, they’re going to encounter it somewhere else.

When they do, guess who they aren’t going to visit again?

Competition Corporate America Management Positioning Small Business

Is your business dependent on suburbia?

Lajpat Nagar
photo credit: wili_hybrid

Today’s guest post comes from TED.

It’s a 20 minute video presentation by James Howard Kunstler about the “Tragedy of Suburbia”, and there is a strategic business message in here that is worth examining, especially given what is going on in the energy business.

Is your business dependent on the current structure of suburbia? Strip malls, mega stores and so on? I know that a good portion of my readers are independent business owners, so I’m not too concerned about the box store situation but many of you use the box stores as a way of gaining additional traffic. Not unlike the remora that clings to the shark, I guess.

WARNING: The F word is used in the video 3-4 times, but I suggest that you not discard the overall message simply because of that.