Does 2012 spell the end of the High Street? Tip: the internet is not the problem

The Situation

6 days into 2012 and High Street retailer Blacks becomes the latest casualty in a stream of failed business caused by …

… by what exactly?

  • ‘exceptionally challenging trading conditions’
  • ‘difficult economic conditions’
  • ‘the economic environment’
  • ‘depressed sales’
  • ‘competition from supermarkets’

So which one of these was a surprise?

Given the financial problems that we are all aware of, which of these could have been predicted?

Answer? All of them.

Any business studies student and certainly any director should have been able to see the logical next steps following a global recession.

So, the boards, strategists and certainly most of the people in the company knew that these conditions were coming, but were unable to save their companies. There is no doubt that times are tough and the High Street is facing an onslaught from supermarket and online competition, but do these companies share any other characteristics when compared against their competition that makes them more vulnerable?

I think they do, and it is something that should also scare a lot of retailers.

The problem

They are all average.

They are boring.

They are all companies that are middle tier players, neither discounters nor quality leader, selling undifferentiated products, have at best acceptable service and are a functional place to purchase products that you may often want, but don’t need, and rarely care about.

Ouch!

Think about it though?

– Did anyone every buy anything that they really cared about at any of these stores?

– Did anyone ever get outstanding service that they could not hold back from telling their friends about?

I doubt it. I never did.

These companies are by definition ‘average‘. And I think that this is the core problem.  Shopping in these stores is a functional, anonymous task that is often a chore. Service is rarely personal or rewarding. The experience for many people is that shopping at these companies borders on unenjoyable. And for retailers, that is a huge problem.

Shopping should never be anything less than a pleasure.

pleasure, fun, enjoyable, exciting.

I cannot imagine shoppers at these stores using any of these words about these stores.

It doesn’t have to be this way. Shops can be enjoyable, fun, have knowledgeable staff, be polite, efficient, helpful, and share experience about their products. Many small retailers do, and they always get my business. The sale is not simply the transaction of money, but in most cases part of an ongoing relationship of shared value.

But that is not the only problem.

When money is tight, and it is, the economics and behavioural patterns of shopping change. People analyse much closer what they are buying and where they are buying it from. They look to reduce spending, they search for discounts, but also search out quality items that have greater durability. Unsure of future incomes people want products that will cost less or last longer. Given that people have less to spend, they want to enjoy where they spend it. Whilst people are flexible about balancing the experience of shopping in exchange for cheap prices, average products at average prices with average service will lose out every time.

Personally, I want to reward shops that care about me, and actively NOT spend money at those that put no effort or care into my visit. Ignore me, give me poor service, sell me an inferior product, give me second rate support and I’ll try my best to not spend money with you. And I’ll tell my friends too. Alone I can make no difference to you, but I am your customer base. I will win.

The Solution

Help me, show me, inform me, talk to me, sell me quality products at a competitive and fair price (not the cheapest) and you have the chance to create a loyal shopper and the opportunity to cultivate a raving fan. If you treat me well, you are very likely to treat me friends well, so I’ll recommend you. Don’t just have a fix-it program for customer service, but LIVE it, employ people who care, empower them to deliver and be the company YOU would want to buy from.

  • My local butcher knows this, and has a shop that is always busy
  • My local sweet shop knows this (yes, we have one of these in a small town, which shows you excellence in service can pay)
  • My local newsagent knows this
  • My local delicatessen knows this

But this is not just about local.

  • The Climbers Shop in Ambleside knows this
  • Numerous smaller shops know this all over the country; Needle Sports (another climbing shop in Keswick) LIVES THIS ethos!!!
  • John Lewis knows this
  • Apple knows this … WOW do they know this

One final point, things will go wrong, so make sure your after sales service is second to none.

Get this wrong just once and you lose me forever and create a raving hater.

So no long list of recommendations, just one.

Don’t be average. Be excellent.

In everything that you do.

That’s it.

I mean everything.

This is not about having a state of the art shop, expensive fittings, the best tills, beautiful uniforms and expensive bags (whilst we are on that, don’t try and charge me 5p when I have just spent £50). It is about having a retail experience that adds value, is a pleasure, is worth looking forward to, is fun, is enjoyable. If you do have the capital, by all means create a great physical store, but this is not the priority; the experience and service is.

It is about being the type of shop that you want to visit and will talk about. Be an experience.

Employ people who care. I mean really care. REI in the US continues to knock me for six with their service ethos. I’d be loyal to any store in the UK that had a fraction of this ethos. This starts with hiring people who care, people who want to serve and help their customers, whether they buy or not. REI takes a long term view, it wants to win not just lifetime loyalty, but generational loyalty. Parents bring their children, grandparents bring their grandkids, that cycle of loyalty builds and builds. I wonder if anyone from Blacks ever visited REI, because if they did, none of this is reflected in the current Blacks shopping experience.

This is not just about the front end though. At the back end, retailers need to know their products. Sell quality products, don’t sell junk that has a good margin, because this approach may cost you your business. Find new suppliers, seek out niche suppliers and emerging designs and products. Build relationships with suppliers and know the products. Keep the products relevant to the season. Start your sales before the next season starts, so I have a chance to pickup a bargain in season. Be selective about what you stock, make sure it fits together as a whole. Sell an end to end experience. Understand your market, your customers and their needs. Where you can, surprise me, reward me. This does not have to be expensive, but show me THAT YOU CARE ABOUT MY BUSINESS!!!

Connect locally, support your community, contribute, reward loyalty, be kind, give back. Contribute to what your company cares about. It is not about big pots of cash. Can you help a local school or business by sharing experiences and advice.

Virtually every company can learn from Patagonia in terms of managing and presenting social responsibility, but this is a massive global retailers, there are many more examples at a local level. If you sell food, do you CARE about food? How would your customers know? Are you supporting local suppliers? Are you committed to healthy living, or exciting food experiences? Do you support causes that you and your company care about? Can customers see what you are doing? Can they get involved?

It doesn’t matter what area you are in, you can get involved:

  • Food – healthy living, sustainability, local farming and production, reducing waste
  • Books – reading, literacy, learning, diversity, any number of specialist themes (home cooking, travel etc)
  • Outdoor – environmental awareness, travel, sustainability, open access, development
  • Fashion – sustainability, reuse, recycling, customisation and personalisation of clothing, positive self identity, diversity

You have no excuse, because this is not about time, but effort and caring.

If people apply for a job and don’t care, don’t employ them. Simple as that. Take time to find people who care. Build networks, relationships and fans. Reject average. Low wages don’t help, but high wages are not required either. Pay fairly, be flexible in conditions and excellent in treatment of people, not STAFF. People, humans with families, not anonymous staff.

Now re-read this article and think how much of this applies to the companies that failed.

I cannot think of one company on this list that gets a fraction of this right. So where is the surprise that they failed.

This was completely predictable and there is a tranche of other companies closely behind them that has survived for now, but are on corporate life support. They are dying, because the lifespan for the business model that they are following is already dead.

Of course, this takes time to get right, costs money, takes effort, but then the alternative is pretty clear too … no business, no job, no income.

There is no middle ground.

Middle ground = average = loser

Excel or lose. Your choice.

This article is Part 1 of a 3 part series.

Part 1 – The experience

Part 2- The internet

Part 3 – The strategy

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