By Jim McCarthy Aug 29, 2012 0 comments

Advice from an Online Retailer to Offline Retailers

People love buying things, and they really love buying things when the experience is interesting and fun in and of itself.  I know this from years of experience, working in e-commerce for practically the entire history of the business and before that, working in offline commerce (which then was just called commerce, I suppose.)

So I come to this topic with a lot of affection for what could be, and a real desire to be helpful.  So let’s begin with the brutal truth.

If you are in the offline retail business,  you’re starting in the hole.  You’ve got structural disadvantages that are not going to change, but instead, just keep getting worse.

Put in a more positive light, you’re a specialist.  You’ve decided to take the unconventional path to success because you’ve eschewed the obvious superiority of the online channel.  I remember when Egghead Software made the very bold move of closing all its stores and going online only, and the gasps that elicited from the world. Now what would be shocking would be the other way around.

But hope is not lost.  Offline has advantages too, but my fear is that most of you aren’t taking advantage of them because you haven’t grasped the picture I just painted, which is that you are filling a niche and taking on extra costs, which have to be justified.  Here in my view are those advantages and what you need to do to make them work for you:

*People can take the merchandise home with them right now.  People hate waiting for things they want, and you can hand it across the counter to them right now!  Stay in stock and stay beautifully merchandised.  Too many retailers stores are an absolute fright these days because they’re skimping on the staff and training to merchandise well.  This is stepping over dollars to get to pennies because this is one of your few advantages.  Also, bear in mind that this advantage may not last forever, if Amazon’s same-day distribution network develops as they’re planning.

*Customers can see and try the merchandise. This is probably the best card in your hand, but all some of you can do is complain about how people browse your store and then go buy online.  You know why?  Because you’re not price competitive (you have to be price competitive, and stop whining about sales tax) and because you’re ruining the experience.  There’s a well known electronics retailer I sometimes go to for this very purpose, and if I were to guess the ratio of the time where the demo of the product I’m looking actually works, I’d put it at about 30%.  The rest of the time, the merchandise is sitting there, forlorn and broken looking, pieces missing, the ‘try me’ demo button not functioning, and nobody with a blue polo shirt looking like this bothers them in the slightest.  This is the “broken windows” theory translated into retail: if your demos are broken and no one cares, customers will assume you don’t care about anything including their business.

*You can talk to your customers directly. This is another biggie because a good customer service person is gold.  But you’re not investing in training or even good hiring practices, so when you do chase down someone to help in most retail establishments, they are uninformed and ultimately not very helpful.  This is an area you MUST invest in.  You have to accept that labor as a percent of sales should go up, as should the dollars spent on initial hiring and training.  If you don’t make it easy to buy, you lose customers.  Standing in front of an item in a store with a question and not being able to find help is the equivalent of a very slow loading web page:  in a few seconds, I’m out of there.  The eventual result of curing this problem is higher sales.  And by the way, this money-grubbing tactic of dispatching sales people to wander the aisles to pitch Dish Network and other kinds of subscription services is an insult.  What statement does it make when it’s easier to find somebody selling you something you probably don’t want in a high-pressure way than to find somebody to help you with what you came in to find and buy?  The statement is: we have very nearly given up on our business.

So those are your advantages, and given that you have some major DISadvantages, if you’re not making the most of what you do have going for you, you’re in trouble.

Now’s the time to stop making excuses and start doing retailing basics well.  In fact, it’s got to be better than it’s ever been, or anything other than mom-and-pop scale retailing will be gone in a decade or so.  And if retailers like that aren’t willing to improve radically, maybe that’s no great loss.

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