The Real Truth: Why Brick-And-Mortar Retailers Fail!

  • October 2, 2019 at 12:00 PM EDT
  • By Peter Weedfald, Sharp Home Appliances
0aaaPeter Weedfald Sharp Home
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Oh boy, just what we need, another opinion article on why brick-and-mortar retail stores are failing. But perhaps this time the article is written by an insider. An individual who was inside Circuit City as their Chief Marketing Officer and section 16 board member for 18 months (resigning a year before their Chapter 11 launch). By an individual who was previously SVP of Sales and Marketing as well as CMO for large brand manufacturers where he physically met inside the headquarters and operations of a multitude of major and minor retailers across our fruited plains.

Yup, that’s me and as the proud yet humble author of Green Reign Leadership, a tome focused on making and taking markets through operational excellence, I am armed, scarred and fueled on the subject of ambient retail and manufacturing operational excellence. Across every touch point of retail from merchandising to supply chain to store execution to advertising and marketing to associate trainings, to e-Commerce I’ve seen it, I’ve done it, I’ve changed it and I also lived through the forlorn pain of not having the authority in many cases to fix it.

In my opinion, a core reason, call it the most realistic heartfelt business reason retailers fail, is so simple, yet so hard based upon dismal results.

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Let’s focus specifically on brick-and-mortar retailers (of course nearly 100% of them also have a web site emporium of goods and services). Beyond the mammoth investments of finding the right retail brick location, building out their store, hiring and training associates, purchasing goods for their shelves and ensuring a unique brand experience for those they wish to attract there is so much more to ensure short- and long-term success:

  1. “My heart and pocketbook are won.” A brick-and-mortar retailer by definition of their physical geo-demographic trading area must build a smart, effective and heartfelt relationship with their local community. For all the operational and financial reasons Toys ’R’ Us failed, perhaps if their brand mascot Geoffrey had a heartfelt daily bonded relationship with all schools, school teachers and children within a seven-mile radius of each store they would have never have failed (read my detailed article on why Toys ‘R’ Us failed in their local markets).
  2. “Smile and the world smiles with you.” Retail is detail, especially when it comes to a simple smile. Associates of Chick-fil-A were the most likely amongst the top 15 food chains surveyed to say “please” and “thank you,” according to a QSR Magazine annual drive-thru report issued in October 2018. Additionally, they were most likely to always smile to their drive-thru customers. Chick-fil-A workers also were ranked among the highest to offer a “pleasant demeanor.” Many analysts believe the key to Chick-fil-A’s success is superior customer service which always drives higher “basket” sales per transaction and smartly contributes to the chain’s greater revenue generation than chains with twice the amount of U.S. locations such as KFC, Pizza Hut and Domino’s.  
  3. “Train me, don’t drain me through failure.” Associate turnover, hiring and firing is a break in the brick wall. The most successful retailers invest in their associates through not only brand and product training but in sales training. This training includes how to sell, how to upsell and just how to handle objections at the last three feet of the sale. They preach business judgment as well as critical thinking. Mostly they train on the art of the possible to ensure a customer enjoys, enjoys, enjoys and will boomerang back again and again, telling friends, neighbors and family of their heartfelt and highly valued experience. Lack of sales and customer-centric training drains associates as they become beleaguered through customer rejection. Sell more, grow more customers and associates thru the dignity of knowledge. 
  4. “Serve me, don’t unnerve me.” It truly amazes me. Regional and national brick-and-mortar retailers painfully experience mammoth competitive e-Commerce retail engines reaching into their geographic trading areas through search advertising to persuade customers to purchase through e-clouds thousands of miles away from their homes. So, what do many local brick-and-mortar retailers do in fiduciary reaction? Instead of creating a great emotional and affective bond with their local community they instead lend a helping hand to their ecommerce competitors to ensure their cloud born success. How, instead of answering the store phone with a smiling associate to direct and serve the customers inquiry retailers offer an automated 20 button phone system to slow down customer experiences. Instead of a smiling with helpful hands associates at each cash register, many brick-and-mortar retailers are installing self-service machines expecting customers to check themselves out and also bag their purchases. Serving people serves hearts and pocketbooks along with boomerang store traffic. Machines in the cloud recognize me, thank me, reward me, check me out and bag my goods…and even deliver my purchases to my front door. Seems we should all simply purchase in the clouds where rewarding service, support and smiles are abundant.

As JCPenney’s stock crawls under $1 per share, as supplements retailer GNC announced in July their intention to close down as many as 900 store locations, as U.S. retailers have announced 8,567 store closings to date, according to Coresight, enough is enough. As Dress Barn is apparently going out of business and closing all of its 650 stores, as Charlotte Russe, Family Dollar, and Chico’s advised more than 1,100 store closures, enough is enough. As Payless states they will shut down all 2,500 stores along with more store closings from Sears and Kmart, enough is enough. Let us learn from the retail demise of retail legends Radio Shack, Circuit City, hhgregg and many more.

I recall emphatically suggesting to the executives and board members of a once famous national retailer that all cash register associates be required in their position description to smile and say after the transaction “thank you so much for shopping at _______ I hope you come back again soon.” I was laughed upon and frankly chastised as a person who does not understand retail nor the ability to require young people to smile and say “thank you” (true story). And yes, that retailer shut down all stores and more than 30,000 associates lost their jobs. Truly makes a grown man want to cry.

It’s time for brick-and-mortar retailers to refocus on customer centricity within each of their local community trading areas. It’s time to stop blaming closures on anything less than a lack of jaunty spirited smiles, smart trainings, customer centricity and heralded customer services — the truest, most cost-effective core construct and august lifeblood of ensuring profitable boomerang retail traffic. Retailers fail when customers do not want to have a relationship with them. Very simple, very smart, very true.


 

As the senior VP of Sales & Marketing at Sharp Electronics Marketing Company of America (SEMCA), Peter Weedfald is in a rare position in which he oversees sales and brand/digital marketing for both Sharp’s U.S. Home and Commercial Appliance businesses. By aligning sales and marketing as one, Weedfald has helped New Jersey- based Sharp Home Electronics Company of America focus on furthering its commitment to health, wellness and Simply Better Living by bringing highly relevant product offerings to consumers and businesses. Prior to SEMCA, Weedfald was the executive vice president of sales and marketing for Samsung Electronics in the U.S. and also has held senior executive roles as President of Gen One Ventures, SVP, CMO of Circuit City, EVP of ViewSonic Corp. and media company VP, Executive Publisher for the Ziff-Davis Publishing Company. His latest industry-centric book, Green Reign Leadership, is designed to enlist superior sales and marketing disciplines and market leadership.

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