March 8, 2010

Are you ready for an exercise in idea-swapping?

In a recent Harvard Business Review blog, Bill Taylor, cofounder of Fast Company magazine and coauthor of Mavericks at Work, wrote about a clever exercise in idea-swapping" thought up by the editors of Fortune magazine. According to Taylor, while assembling their annual "Best Companies to Work For" issue, the Fortune editors challenged Kip Tindell, cofounder and CEO of The Container Store and Maxine Clark, founder and CEO of Build-a-Bear Workshop to trade places for a day. What the leaders discovered after working on the front lines of each other's operations, writes Taylor, was "all kinds of ideas and merchandising, employee motivation, and in-store communication that worked in one place, and might just work in the other if those ideas were exported to and adapted for the new environment."

Taylor, whose new book Practically Radical will be published this fall, said he's "seen it time and time again: Leaders who are hungry for new ideas don't just aspire to learn from the 'best in class' in their narrowly defined field. They also aspire to learn from organizations outside their field as a way to shake things up and make real change. Strategies and practices that are routine in one market segment can be revolutionary when they migrate to another, especially when those ideas challenge the prevailing assumptions that have come to define so many market segments."

What do you think? Would trading places with another business owner help you run your store better?

Posted by Lori Smith at 4:49 PM | | Comments (0) | TrackBacks (0)

February 22, 2010

Take a Tip from The Container Store: Treat Every Customer Like a Thirsty Man in a Desert

The Container Store, a U.S. chain specializing in home and office organization, has been in the retail news a lot lately. One of its founders, Kip Tindell, who is currently the company's CEO and chairman, is a keynote speaker at the upcoming International Home + Housewares Show, being held March 14-16 at McCormick Centre in Chicago. Tindell was also recently interviewed for the National Retail Federation Foundation Research & Education blog. At the International Home + Housewares Show he will be speaking about the value of an employee-first culture during tough times. In the NRF Foundation blog, he talked about "employees being a true part of the business" and the company's new "We Love Our Employees Day."

Not surprisingly, the company is one of the few retailers to consistently make Fortune Magazine's 100 Best Companies to Work For list. And with $551 million in sales in 2008, these employees clearly know a thing or two about selling. With all this in mind, I was interested to read an article that appeared in last Wednesday's (February 17) Dallas Morning News, which landed on my desk via a SmartBrief enewsletter. Titled "Container Store co-founder shares secret shopping encounters," the article detailed a "mystery shopper" expedition made by Garrett Boone, who is now the Container Store's chairman emeritus. Boone visited 30 stores in Dallas to prove that "rote, mindless greetings draw rote, mindless and dismissive responses from customers--even when they need guidance." On a day, when he "set the sky as the limit" for spending, encounters with 60 salespeople saw him purchase only "two pairs of jeans, a shirt and a half-dozen pairs of socks." No-one, he reported, treated him like a "Man in the Desert."

At the end of the article (which was originally a post on his Container Store blog), Boone explains "Man in the Desert" selling, which is taught at the Container Store.

"A man lost in the desert for weeks stumbles across an oasis and is offered a glass of water. But if you stop to think, you probably realize he also needs food, a place to sleep, a phone to call his family, a pair of shoes and a hat and umbrella to screen the sun's rays.
"When a customer comes looking for shoe storage, most retailers help her find a shoe rack--that glass of water. We know she needs a complete solution for her entire closet.
"Man in the Desert selling teaches our salespeople to become so immersed in the customer's needs that we complete their solution indistinctively."

Someone once told me that selling starts when the customers says "No." In retail, I think it's accurate to say that selling starts when the customer says "Just looking." Want to increase sales? Maybe your staff should try a little Man in the Desert selling.

Posted by Lori Smith at 12:50 PM | | Comments (0) | TrackBacks (0)

February 8, 2010

Giving Your Customers a Product Vote

Should you give your customers a vote about the merchandise in your store? Consider this:

A recent article on entrepreneur.com called Vote For Art: Democratizing Collegiate Apparel, tells the story of a young entrepreneur named Jeremy Parker (he's 24-years-old) who has broken into the lucrative collegiate licensing category in the States in a unique way. VoteforArt.com partners with universities and colleges, and through it students at these institutions vote for T-shirt designs created by peers, which will, in turn, by sold in their campus stores. Parker's impetus for creating VoteforArt.com was his own visit to a university campus, where he couldn't find a T-shirt with a design he liked. Why not, he thought, combine crowdsourcing and licensing and let the people who actually purchase the merchandise do the designing and make the selection.

Reading the article, I wondered what other retail applications this "democratizing" might have. Would it be good business for a retailer in a tourist area to hold a T-shirt design contest and let customers determine the winning design? Could a customer vote help you narrow down your choices of product in any given category? Customers have always voted with their dollars but it's an after-the-fact vote. What would happen if they got to vote for something that you didn't yet carry in your store? Just an idea.

Posted by Lori Smith at 4:51 PM | | Comments (4) | TrackBacks (0)

February 1, 2010

Negotiating: Think Win-Win, Not Winner Takes All

Yesterday morning, Kevin Graff of Graff Retail, opened the CGTA Spring Gift Show in Toronto with a seminar in which he outlined 13 critical management mistakes that retailers make and gave advice on how to avoid them. One of his suggestions concerned negotiating terms with suppliers. Everything, he said, is open to negotiation.

I had that admonishment on my mind when I went through my email newsletters today and found an article from American Express Open Forum Small Business titled, Take the Long View When Negotiating with Your Vendors. Written by Thursday Bram, this article delivered some common sense advice on the art of negotiation.

Bram suggests thinking outside of the price box in your negotiaions with vendors. They may not have much wiggle room when it comes to price, so think of other terms that you can benefit from. She also says to think long-term.

It's also important to think in terms of working with a vendor for years. If you're willing to take the focus of your negotiations off of price, your vendor may be more interested in working with you in the long run.
Phil Marcus, of NegotiationPro.com, has negotiated deals for clients as an attorney for more than 35 years. He offers a simple piece of advice for negotiating with any vendor:
Don't try to do what in Yiddish is called 'hondling.' That is, try to arrive at a fair price that allows the vendor to pay their bills and make a profit so they stay in business, rather than pressing and pressing for a cheaper price. Don't overpay, of course, based on what prices the commodity sells for elsewhere, but act like you want a long-term relationship and you will build one.

Taking the long view, she concludes, will payoff in new opportunities in the years ahead. Makes sense to me.

Posted by Lori Smith at 4:57 PM | | Comments (0) | TrackBacks (0)

Negotiating: Think Win-Win, Not Winner Takes All

Yesterday morning, Kevin Graff of Graff Retail, opened the CGTA Spring Gift Show in Toronto with a seminar in which he outlined 13 critical management mistakes that retailers make and gave advice on how to avoid them. One of his suggestions concerned negotiating terms with suppliers. Everything, he said, is open to negotiation.

I had that admonishment on my mind when I went through my email newsletters today and found an article from American Express Open Forum Small Business titled, Take the Long View When Negotiating with Your Vendors. Written by Thursday Bram, this article delivered some common sense advice on the art of negotiation.

Bram suggests thinking outside of the price box in your negotiaions with vendors. They may not have much wiggle room when it comes to price, so think of other terms that you can benefit from. She also says to think long-term.

It's also important to think in terms of working with a vendor for years. If you're willing to take the focus of your negotiations off of price, your vendor may be more interested in working with you in the long run.
Phil Marcus, of NegotiationPro.com, has negotiated deals for clients as an attorney for more than 35 years. He offers a simple piece of advice for negotiating with any vendor:
Don't try to do what in Yiddish is called 'hondling.' That is, try to arrive at a fair price that allows the vendor to pay their bills and make a profit so they stay in business, rather than pressing and pressing for a cheaper price. Don't overpay, of course, based on what prices the commodity sells for elsewhere, but act like you want a long-term relationship and you will build one.

Taking the long view, she concludes, will payoff in new opportunities in the years ahead. Makes sense to me.

Posted by Lori Smith at 4:57 PM | | Comments (0) | TrackBacks (0)

January 13, 2010

Email - To Reply or Not to Reply, That's the Question

In his January 13th, 2010 blog for the Harvard Business Review, Peter Bregman took on the whole topic of email etiquette. He started the piece with an anecdote about a marketing consultant who had what he thought was a great meeting about a branding project with the head of marketing at a pharmaceutical company. A month later, Bregman explained, the consultant's follow-up emails and voicemails remained unanswered. Had he lost the job? Was the head of marketing sick? Busy? What was up?

Email is two things: A remarkably easy way to communicate with people and an equally easy way to ignore them. Personally, I think that if you're going to use email, you should try to answer messages in a timely manner, particularly those that need only a short reply. If you don't want to do that, don't use email to communicate with people. Here are a couple of anecdotes of my own. I once tried to get information from a supplier via their hotmail email address, the one printed on their ad. When I didn't receive any response, I called and was told that they rarely checked the hotmail account. I've also dealt with a supplier with an email firewall that blocked the info@ messages from their own site.

There's no doubt about it. Business email is a chore. But it remains the most effective way for communicating with customers, suppliers and other business consultants. Do you remember faxing? Good email etiquette is good business so soldier through your inbox. To reply or not to reply? I say, reply.

Posted by Lori Smith at 5:11 PM | | Comments (3) | TrackBacks (0)

January 11, 2010

Is listening to customers bad for your business?

In the January 6th, 2010 edition of Forbes, columnist Adam Hartung sets the whole notion of the value of listening to customers on its head. In fact, he argues that listening to your customers exclusively can be bad for your business.

In "Listen To Competitors--Not Customers," Hartung writes that "companies that use customer resource management programs…typically turn to their biggest customer for input, because Pareto's law tells them that 20% of their customers produce 80% of their revenue. But there's no reason those biggest customers should be particularly perceptive." In fact, he asserts "customers rarely know what they want, beyond more, better, faster and cheaper." And the big ones "don't look for change."

Instead, he advises that companies pay attention to their competitors, "especially those on the fringe." As a case study, he cites the rapid demise of Tribune Corp., which was a "powerhouse media company in 2000" and bankrupt by 2009. That company's mistake was that it listened to its big customers (i.e. advertisers), who were only interested in the status quo at a better price, and ignored "fringe" competitors like eBay and Craigslist. "Asking customers what they wanted had done nothing to help management anticipate the market shift," explains Hartung. "A close eye on competitors across media would have shown the inevitable change as it approached."

He sums up with this advice:

To succeed you have to obsess about competitors. And not just about traditional ones, but about fringe ones as well. What customers won't tell you, the market will, through competitive activity. The signs were all there for Tribune and other media companies [Ed: Canwest, for example] to see the user shift that was coming long before their newspaper ad revenues fell off a cliff. The emergence of strong offshore IT centers was obvious to anyone who looked. But by focusing on existing customers, especially the large ones, these companies kept themselves blind to the changes that wiped out huge, profitable revenue chunks….
Leaders can move beyond surviving and enter the world of thriving only if they obsess about their competition. Watch the competitors that grow, and watch the competitors that don't grow, and understand why. Look at how customers behave, not at what they say, and see what tests they are undertaking with competitors--especially with fringe competitors with alternative solutions. See what revenues are shifting to other, often emerging, competitors, even if they are very small. If you want to remain viable, your competition will give you more insight than all the strategic customer councils in the world."

I think Hartung is right. What do you think? Has listening to your customers ever been bad for your business? Do you know who your fringe competitors are?

Posted by Lori Smith at 4:01 PM | | Comments (1) | TrackBacks (0)

Is listening to customers bad for your business?

In the January 6th, 2010 edition of Forbes, columnist Adam Hartung sets the whole notion of the value of listening to customers on its head. In fact, he argues that listening to your customers exclusively can be bad for your business.

In "
Listen To Competitors--Not Customers," Hartung writes that "companies that use customer resource management programs…typically turn to their biggest customer for input, because Pareto's law tells them that 20% of their customers produce 80% of their revenue. But there's no reason those biggest customers should be particularly perceptive." In fact, he asserts "customers rarely know what they want, beyond more, better, faster and cheaper." And the big ones "don't look for change."

Instead, he advises that companies pay attention to their competitors, "especially those on the fringe." As a case study, he cites the rapid demise of Tribune Corp., which was a "powerhouse media company in 2000" and bankrupt by 2009. That company's mistake was that it listened to its big customers (i.e. advertisers), who were only interested in the status quo at a better price, and ignored "fringe" competitors like eBay and Craigslist. "Asking customers what they wanted had done nothing to help management anticipate the market shift," explains Hartung. "A close eye on competitors across media would have shown the inevitable change as it approached."

He sums up with this advice:

To succeed you have to obsess about competitors. And not just about traditional ones, but about fringe ones as well. What customers won't tell you, the market will, through competitive activity. The signs were all there for Tribune and other media companies [Ed: Canwest, for example] to see the user shift that was coming long before their newspaper ad revenues fell off a cliff. The emergence of strong offshore IT centers was obvious to anyone who looked. But by focusing on existing customers, especially the large ones, these companies kept themselves blind to the changes that wiped out huge, profitable revenue chunks….
Leaders can move beyond surviving and enter the world of thriving only if they obsess about their competition. Watch the competitors that grow, and watch the competitors that don't grow, and understand why. Look at how customers behave, not at what they say, and see what tests they are undertaking with competitors--especially with fringe competitors with alternative solutions. See what revenues are shifting to other, often emerging, competitors, even if they are very small. If you want to remain viable, your competition will give you more insight than all the strategic customer councils in the world."

I think Hartung is right. What do you think? Has listening to your customers ever been bad for your business?

Posted by Lori Smith at 4:01 PM | | Comments (0) | TrackBacks (0)

December 15, 2009

Sharing “What Matters Now”

Bill Taylor’s blog in this morning’s HBR enewsletter directed me to this Seth Godin ebook in which some of the web’s big thinkers have shared their thoughts on what matters now. It makes interesting reading and perhaps will inspire you to think about what matters now to you.

What Matters Now

I’d like to thank all of you who have shared your thoughts on what’s happening in retail and commented on my blog entries. I truly appreciate it. I’m on holidays for the next couple of weeks but will be back in the blogosphere in January. Have a Happy, Healthy Holiday Season and Best Wishes for 2010!

Posted by Lori Smith at 5:11 PM | | Comments (1) | TrackBacks (0)

December 7, 2009

Does it Matter that Retail is Boring?

In a news item about pop-up stores featured on CBC's The National last Thursday, Barbara Atkin, Holt Renfrew's vice-president of Fashion Direction, declared that retail has become boring; that's it's all "the same, the same, the same."

I agree with her to some degree: a lot of retail is boring, particularly retail formats like power centers and big box stores. However, independent retailers comprise one retail format that is not boring. Each store is a reflection of its owner's passions, interests and tastes. So, I wondered, given that consumers are allegedly looking for interesting, innovative stores, why aren't more of them shopping at independents?

Posted by Lori Smith at 4:19 PM | | Comments (0) | TrackBacks (0)

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Lori Smith, , Editor-in-Chief
Lori Smith is the editor of Gifts and Tablewares, Canada's premiere gifts and tablewares magazine. Written for retailers of gifts, tablewares, housewares, stationery and home furnishing accessories, its objective is to help readers increase their sales and run their businesses more profitably by providing information on new products, merchandising, small business management, customer service, consumer behavior and industry news. The magazine is published six times a year by BIG Magazines, LP, a leading Canadian information company.

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