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In my last article, I addressed the importance of “individualizing” store growth plans based on each store’s metrics and specific DNA. Now, let’s discuss the next step in the process — looking further inside the “black box” to the individual associate’s performance to help each person reach his or her full potential as reliable, strong contributors to store growth.
Developing associates to be more productive has never been more important than right now! Retailers face increasing pressures on labor costs. The Affordable Care Act (ACA) forces companies to make hard decisions on full-time vs. part-time staff. Although many retailers remain committed to maintaining a core staff of full-timers, these higher costs must be offset somehow. Our answer is to systematically increase individual productivity. When associates learn and apply new skills to help more customers buy, and buy more, they dramatically offset increases in wages or benefits.
As we all know, retail boils down to customers and associates. Associates are the ultimate touch point — where their interactions with customers strongly influence the likelihood of hearing, “Yes, I’ll take it.” So what’s the best way to systematize individual performance improvement and develop more top sellers? [Read more...]
In my last article, I talked about “Data, Data Everywhere” and how critical it is to simplify retail analytics so we can use the data to take the right actions to help more customers buy, and less time analyzing the hundreds of reports trying to figure out how. When we use data correctly, we have proven that we can develop each store based on their own specific needs…resulting in significant performance improvement and new-found profits. It’s a new way to grow!
I’ll never forget an energy filled conversation I had with a very successful CFO of a large retailer. I was sharing my approach of “individualized store development” when I quickly realized that after patiently listening to my theory he wasn’t buying it. He informed me that his one-size-fits-all, top-down approach is far easier to implement and that I should adopt the command-and-control approach which has worked successfully for the past 20 years.
I clearly did not make my case. But it was helpful as I went back to the drawing board on how to more effectively communicate this new approach. I learned that his point of view is highly indicative of where many leaders in our industry are in terms of how they think about stores and growing revenues. [Read more...]
Today’s fashion companies operate in a highly competitive environment, driven by increasingly fickle, price-conscious consumers, rising costs and clothing trends that change at light speed. With increased drops, the proliferation of SKUs and an incessant demand for newness, the big three—retailers, brands and manufacturers—are battling it out for market and wallet share.
We know we’re preaching to the choir. You know better than anyone that there is a need to control business activities as much as you can—control over everything from product concept to consumer purchase. What’s emerging is the hybrid business model, where the big three are integrating across the supply chain in an effort to protect margins.
Why is this so important for retailers? If you haven’t thought about going hybrid, chances are that your competition has. Wall Street demands growth and with increased competition, international expansion and the rise of omni-channel retailing, retailers are seeking new ways to maintain that growth and stand out from the crowd. [Read more...]
Why do customers visit brick-and-mortar stores when it is often easier and cheaper to buy online?
It’s obvious…because consumers want to see and touch the product, experience the brand, interact with people with the hope of solving a problem, or simply to feel better. For brick-and-mortar retailers, this in-store customer experience IS the competitive advantage. So why don’t front-line employees seem to know this? Why don’t they have the urgency and skills to make shopping experiences consistently good? Creating a consistent ‘performance improvement culture’ IS within the reach of most retailers…IF they take the right steps!
From my perspective, answering these questions starts at the top. Progressive retail executives realize it is no longer enough for store employees to simply complete tasks and operate stores. They know they need to get more from their large annual labor investments. They know it is no longer enough if employees only ‘fluff and puff’…they must also interact with customers to positively impact the in-store experience and drive sales. But how? [Read more...]
Consumer Facts from Cotton Incorporated Lifestyle Monitor™
Once consumers became comfortable purchasing apparel online, brands and retailers sought to enhance the experience through social media sharing options, crowdsourcing — and online customer comments sections. What may have begun as a means of increasing sales via search engine optimization has grown to be a barometer of what’s in and what’s out of favor with the buying public.
Project Reveals Key Apparel Complaints
Cotton Incorporated set out to quantitatively measure these customer comments, and the result – the Cotton Incorporated Customer Comment Project – reveals what makes apparel consumers rant or rave about their purchases. [Read more...]
In today’s environment, brick-and-mortar retailers are facing unprecedented challenges. C-level leaders are navigating through increasing headwinds brought on by a confluence of technology-driven changes – including big data, the cloud, mobile devices, and social media – that threaten the viability of the traditional retail business model.
Over the past decade, retailers have made huge strides in streamlining their store operations and supply chains. As a result, additional cost-cutting opportunities are waning as fixed costs of rent, marketing, inventory, and infrastructure become more prominent on the P&L. With today’s retail cost structure, even a few percentage points in incremental sales can mean the difference between continued stagnation and breakaway success. [Read more...]
Luxury Retailers Alert: The Aspirant Shopper Is Back, and Ready for School.
Five years ago, the luxury sector took a nasty hit.The prevailing message at the onset of the Great Recession to high-net-worth consumers was, “just because you can flaunt it doesn’t mean you should.” And the message to the aspirant luxury buyer was, “you shouldn’t have been buying this in the first place.” So we tightened our belts, made do with less, and witnessed unprecedented levels of discounting – up to 70% – which became the luxury retailer’s main tactic for getting customers back into the store.
The post-crash disappearance of aspiring luxury shoppers has been well documented, but now there’s evidence that this segment of consumers is back – both because of increasing demand and because of what retailers are doing to attract them. The most attuned marketers are discovering there’s a new, younger face to the aspirant shopper – Millennials (those born in the 1980s and ’90s) who love high-end goods. And one of the most effective ways to reach this capricious audience is by schooling them on how to live the luxurious life. [Read more...]
How do we use it to drive performance improvement?
In my last few articles, I have focused on new metrics and processes available to retailers that help them create and energize a far more participatory and collaborative organization. CEOs and store operators alike are intrigued by the concept in theory, but are increasingly curious about execution. How can we simplify data and make it more actionable? Execution is everything!
When you look closely, retailers are overwhelmed by the amount of data they are collecting and unsure how to use it. Often when we start working with a new retailer, we find they are sifting through 150 to 300 reports and looking at a sea of metrics. What is even more concerning is that their field teams have little consistency regarding how they use these reports; they “cut and paste” on a daily basis to get individualized information to stores within their region or district. In addition to being difficult and inconsistent, this approach rarely provides the right information needed to effectively coach their teams and measure store performance in ways that are actionable by store teams. As one CEO told me recently, “we are expecting our field teams to be analysts rather than the executers we need them to be.” This is how big data is backfiring. Rather than saving time and driving the right outcomes, it is time consuming and leads to confusion. [Read more...]
The Cotton Incorporated 2013 Environmental Survey reveals that more than 50% of U.S. consumers identify themselves to be “green”. And, although participation in basic household environmentalism has shown only incremental growth, higher income consumers constitute a markedly greater level of engagement. Survey data indicate that personal income and larger economic concerns are changing the ways in which consumers perceive and participate in environmental activities. Several factors, including a significant increase in consumers’ pursuing apparel made in the U.S.A, and apparel made from natural fibers, suggests that these are emerging as new forms of environmental engagement.
“It is clear that consumers are aware and concerned about the environment,” says Kim Kitchings, VP of Corporate Strategies and Program Metrics at Cotton Incorporated, adding that the majority (60%) of survey respondents say that they often think how their actions affect the environment. “What is less clear to them is the cost of making a difference.”
Kitchings points to five years of data showing that participation in relatively low- or no-cost household environmentalism, including recycling, conserving water, and investing in energy-efficient appliances, is consistently greater among consumers with higher incomes. The divide is also seen in the 34% of consumers who say they put effort into finding environmentally-friendly apparel; that figure jumps to 40% among consumers making $75,000 or more per year. [Read more...]
I was asked to sit on a panel in May for The Robin Report and Fashion Group International to comment on whether robots will replace sales associates in “Our Brave New Hi-Tech, Low Touch World”…needless to say, it has been on my mind. Robots? How can a robot replace the human element, the interaction – the energy OF people and BETWEEN people… that feeling we all so desire when we go out to stores? Apple, Starbucks, Nordstrom… they always deliver. So why don’t more retailers do this? Why ARE some retailers actually replacing store staffs with kiosks and self-check-out devices? Why don’t more retail executives understand “people economics?” Can’t they see that robots are driving customers away from stores? They must not have adequate facts. [Read more...]
Today, there is a seismic shift in consumer behavior affecting the retail world—and it’s being driven by technology. Likewise, retailers’ success hinges on an organizational ability to quickly adapt to, and actively integrate these new technologies as they infiltrate the marketplace. With brick-and-mortar retailers at risk of marginalization at the hands of “showrooming” consumers, or those who intend to purchase the merchandise for the best price online, there is no doubt that retailers feel the pressure to enhance their in-store experiences and keep the online sale in their own ecosystem. Here are some technology trends that retailers are adopting to engage the increasingly fickle customer: [Read more...]