Retail stores can have many things in common but produces completely different results. This is very obvious when dealing with stores of a chain. People attribute the results to many different factors and praise or blame either store. This section of the case study compares two locations of a retail electronic stores in California. Both stores are in the same city and are of identical categories. Basically the two stores have the most in common but achieve different levels of sales in different categories. This study points out the Store B achieves sales in the top percentile, for that district, while Store A is at the very bottom for the same district. The sales mixture is not analyzed any further and the study focuses on the ‘back to the basics’ review of the two stores.
Back to basics is the philosophy that a good business is built on some fundamental and practical ideas and principles. These serve as guidelines for the operation of the business but the enterprise may find a new direction if economy or other factors provides as such. The problem with the changing of directions is once the economy or whatever guided this departure from ‘the basics’ turns the opposite direction, a business cannot always find its way around. The ‘back to basics’ philosophy recommends the business should return to the fundamental principles and ideas and stick to them to maintain the balance. If a new trend or change shows the way for another departure, the firm can depart on this path and reap the benefits, but otherwise one can find safety and stability within ‘the basics’ as long as the company was built on a sound foundation by knowledgeable people who understood and appreciated this industry.
Store A and Store B are both located on main streets. Store A is located in an uptown neighborhood at the corner of a residential street and a very high traffic street. Store B is located in a part-ethnic neighborhood on a street with extreme foot traffic. The location of Store A is great if the store was to be planned from a distant corporate office but as a practical location has a few shortcomings. The neighborhood is great, and the consumers are upper-middle class with good knowledge of electronics. They will also cater to stores within their own neighborhood. The hours of operations and days of operations are more than adequate to satisfy all potential consumers. The location on a very busy street has caused extreme problems. The cars pass by the store at high speeds and the visual location does not help for new business. Parking is out of question and except for the local customers who walk by many find parking in front a fire hydrant as the sole alternative on such busy and high traffic street. The location is good in a general sense but as a specific address has severe problems keeping guests from returning unless absolutely left without alternatives. Store A is inaccessible for all practical purposes. Store B is in a very good neighborhood where a large number of East Asian citizens reside. The entire street for about 7 to 8 blocks functions as an outdoor market. Both sides of the street are lined up with shops of supermarket size to the smallest. The local population is a mixture of any citizen class and the dominant neighborhood population. This population practice window shopping and occasional shopping by walking the street in various directions. The result is Store B may have 500 to 1000 walkby citizens passing its front door. Parking is available on the street and the side streets so Store B is as accessible as a small retail store would wish to be.
Store A has huge signs that can be illuminated at night and Store B uses a standard small sign sticking at a right angle against the building. Store B sign is visible during the day though small to be seen beyond one block. Store A sign is very visible but hardly useful during the day. One sign is on the side street which is seen by few people though very prominent and sharp looking. The other sign is on the main street and is large enough for the fast cars going by but also has a tree in the way blocking part of the view. Store A sign is mostly black with little white and red as part of the company logo and is hardly seen at night. Store B sign is very visible at night but does not get attention because the company name is white letters and the background is black. There are no significant bright color presences to grab attention and remind each viewer what store they are looking at. The signage and exterior do the least for both locations in terms of helping to find new business or attracting casual customers. Store B has large walls on both street sides which are painted white and need to be repainted to get attention. Many retail stores hire cheap local artists to draw scenery or drawings of what is sold on the exterior walls. The exterior drawings are extremely good reminders of the store because they are very big and individualized. They never turn boring. A cheap and interesting painting i.e. a neighborhood skyline and people walking or walking their dogs will make the store location immensely remembered compared to the plain white walls with huge black signs with huge white letterings. Store B has no walls and only has a windowed storefront to the street. Store B is not hidden but is not exactly screaming for attention either.
Store A and Store B can benefit from a little help on the outside to bring customers in. Since economy does not allow for alternation of signage and the related expenses, that option remains indefinitely postponed. The painting of Store A wall can do great deal of good. The objective of ‘detail improvement’ is not to turn the entire business around, though it can and may happen, but to make slight improvements. The idea builds on the Japanese practice of Kaisen (or Kaizen) which means ‘gradual improvement.’ This means making little improvements on regular basis to bring dramatic change in the long run. The painting of the wall is a good project for one month and will bring a few more customers once the wall is painted. It is not intended to turn all numbers around. Other improvements can be made in all areas inside and outside. One easy solution is the continued usage of standup signs, which every store owns, on the outside. These signs get some attention. A better approach will be to use a blackboard sign and write details of that day’s sales or offerings. A blackboard sign will bring a few browsers in daily and for Store A that writes less than 100 tickets daily, even 10 small purchases mean a 10% daily increase in ticket count. Retail principles teach us as the ticket count goes up, the probability of larger purchases increases. If 10 small purchases happen, one of them may be a decent purchase by numbers rules. Store B has a special advantage by being in a mixed ethnic neighborhood. The blackboard can have sales information in native language(s) speaking closely to the local niche. Again a few small purchases will make larger ones possible. Another major improvement that is common with independent and mom-and-pop stores but is not always followed by chain stores is a neon OPEN sign. Small and independent stores always have bright OPEN signs mostly because they really need to be seen and cannot afford to lose any customer because their location may appear as possibly closed because of lack of customers. Chain stores do not care because everyone knows if a large company paid to build a store somewhere then it is open. The signage of the corporation imply being open within normal business hours. The addition of a neon OPEN sign will help both stores greatly. Store A needs to be seen in a flash by fast moving cars and also get attention. The exterior of the building hide most of the interior except for two small windows and mistaking the place for CLOSED. Store B is not exactly hidden but has small front facade to be seen and a neon OPEN sign will help greatly.
The signage is a universal communication tool. The people who see the signs perceive them as having specific meanings to them. Neon OPEN sign implies the ownership insist they are inside and want to speak to you about your business needs. OPEN invites browsers and people who have questions. They work as subliminal tools instructing the passerbys it is okay to open the door (if closed) and walk in, look around, browse, ask questions and leave without buying anything. Browsers can be a great help for the retail stores. They are not only potential buyers or future buyers but also attract others to enter and visit the store. Store A and Store B can benefit from another window signage which may not work for a similar store in another location such as mall. In some locations, customers will browse no matter what the local business culture but Store A and B need to help people explore their stores. A neon Welcome sign is used by small independent service places. This sign implies walk-in business is welcome which is great for both Store A and B. Store A does have another resource for customers besides the traveling people in cars, and the local neighborhood. The street has a good number of tourists walking by. A neon welcome sign invites tourists to browse. Tourists are not necessarily buyers but are definitely browsers and take their time. They make small or luxury purchases and explore all displays. Good product displays will ensure possible return of the same tourists to buy in near future for Store A. Store B will benefit by an English and another language welcome sign (or symbol or whatever) so browsers are attracted. A welcome sign also implies a friendly culture. People who have not been to a store are given a strong word for the attitude of the ownership toward them, as strangers walking in for any reason, by welcoming them. The staff must be able to welcome and appreciate the walk-ins as guests or the welcome will clash with the store culture. In short, the signage must be agreeable with the store culture. A welcome sign for a store known for unfriendly staff will irritate people. An OPEN sign for a store that provides poor customer service will annoy people. The store culture must support the signage. Each of these signs of painting the exterior walls, blackboard exterior sign, OPEN sign and Welcome sign will help people remember the location and bring a few people in. If the store culture supports the openness, the welcoming of its facade and has products and services as exciting as its blackboard sign claims, it will make customers who will return. It will also not lose the customers.
The interior of Store A and Store B are decorated and arranged according to the corporate instructions. Signs, props and displays are provided and setup according to specific corporate instructions. Product displays are also done by corporate guidelines. Store B is about the size of an average Starbucks thus not large but not too small. Store A was originally a residential house which was converted to a fancy French restaurant before becoming a retail store. The shape is square and the interiors are quite large. This provides for ample wall space for product displays but also makes the store without a center. A small store, such as Store B, puts the customers within close proximity of everything in the store. The customer can browse the store easily and see everything from almost one spot and several customers can be watched or helped with one staff member by the spacing arrangement. Store A is large so the customer can get basically lost. The only way to browse is literally walking the interior perimeter wall and checking things. What is on display at another part of the store is too far and staff member(s) are within shouting distance. The low number of customers results in lack of problems but if the store is busy, one will need to search for help. A person cannot automatically browse everything by visiting the store and maybe find something. The space is too big and discouraging to browse. That is a big point for making good displays. Some retail electronics can be made to function and draw attention. Store B has a good grab on each customer and can get the business done efficiently upon the visit. Store A needs to provide help to find things and browsing is limited to one section or nothing. Store B needs to make most of its displays to get attention. Whatever can be made to work in displays must work. People are attracted to TV screens and smaller devices. Nobody reads any of the printed advertisements and props in a store unless that is what they are looking for. They browse and look at the products. The displays must be made as if made for a very important and snooty person to honor us by reviewing them. Customers can tell quickly if the store cares for them to visit or is doing the minimum. The customer likes to be treated as important and displays do this job in a flash. Displays must be full and priced. Price tags will help sell more products and bring more customers back than all the fancy props and printed signage. Customers really appreciate an honest dollar figure for what is on display versus asking for help to get a price. They don’t like to ask for price, for obvious reasons, unless absolutely want think to buy something.
Store B does not need a center. Since the size puts the customer and the staff within very close proximity of all the walls and displays, a person is the center of the store where they are standing. Store A needs a center because one is lost in the space. The present center is the counter. The staff gravitate to the counter because it is the best point to help those paying and leaving, answer the phone and greet the door. That can be an advantage. Each customer that comes in may do some browsing which presently is not done. The counter is the center of the store and can be a good selling and browsing spot. The glass display counters must be filled to the capacity. I counted Store B and they had more than 70 items on display (out of the boxes or packaging) and whatever could work was on and working. Store A has less than 20 items none of which work and most of which are in their original packaging and boxes. Store A needs to change glass displays to be filled with products and let them function. Customers will browse the glass displays no matter what. They are trained to know the better items or more interesting items are on display. They habitually look. They also look to look over an item in the display, read the tags, compare to the ones next to, ask a question, ask to see to hold and finally ask to see it at work. This maybe a lot of work but is a big part of the sales process. The customer volunteers to go through several steps of the sales process on one’s own and many browsers turn customers after a few minutes of this activity. These displays can add another 10 tickets daily and the tickets are not small. The displays maybe hard to setup, price and maintain but are a must for a healthy business.
Another area that can be used is the behind the counter walls. Since the center of the store is the counter, customers will have to spend time there and will browse things. The back wall can be a valuable space for what is interesting or often sold. It also has another use for both Store A and Store B. Many people walk in looking for a certain item that is popular or often needed or what the store wants to promote. These items may have their regular spots in the store but it pays to have a few on the backwall. The staff can help many customers without walking the distances of the store to the walls by putting the product in front of the customer and telling them right there. This makes the staff eager to promote and sell such items because they can be shown to whomever arrives at the center. Store A is a larger than usual store but the counter area is average is size and the backwall together with the glass displays can hold 150 to 200 items that count if even one is sold. These items at this location force all visitors to browse some of them and can be easily demonstrated and many will sell by themselves by being at the right place at the right time. Displays, proper positioning of top items and pricing all items will help make the most of many sales opportunities. Store B needs to fill displays and price them and the floor size and format will do much of the work for them. Store A has to concentrate on the center of the store to make browsing and demonstrating possible. Both stores must not only put everything on display (and make them look great) but price every item adequately.
The physical state of the exterior and the interior of a retail store can have a great deal to add to what the store offers. In a poor economy, each customer is valued greatly and not losing a customer is valued as much as (if not more) than making attempts to make large sales at the cost of losing other (small) customers. A practical and successful approach for not losing the business of any customer has been the ‘back to basics’ philosophy. This approach requires sticking to the fundamentals of the retail business and following them closely. Store A and Store B have inherent problems that can be costly to fix and fall short of being perfect. It is however possible to improve both stores slowly in several detail areas and ensure minimum loss of existing customers. The exterior of the stores can use a few modifications to make the stores easier to recognize and remember. An inviting exterior also brings browsers in who are by nature potential customers today or in the future. The proper interior will guide the browsers to explore the store and if nothing is bought today, the same person will remember the store later for what is of value to them in the future. A significant effort to improve the browsing, demonstrating and sales interaction (such as using the counter area as the center of the store) can involve the visitors in a large number of product interactions with potential sales today or in the future. The stores obviously can benefit from more improvements but Kaizen teaches us to make small improvements regularly and expect large improvements in results in the long run. The previous improvements should produce (collectively and over the long run) huge results compared to doing the same thing done today and making no improvements.
*This post belongs to this week’s edition of Wine by Cush Magazine blog and published early in World of Cush also.
No comments:
Post a Comment