INTRODUCING RETAIL REVOLUTION, AN EIGHT PART SERIES ABOUT THE CHANGING FACE OF RETAIL
Do you know what a widget is? It’s something that doesn’t exist, but which can be a very important tool for manufacturers and retailers alike. It’s a term given to a product — whether it’s as small as a paper clip or as large as an airplane — that needs to be made and sold.
The value of the widget concept is that companies can look at how they sell their products and interact with their customers, and then compare their methods to other successful retailers.
It’s difficult to believe that companies such as Apple, Amazon, Hudson’s Bay, Staples, McDonald’s, or even Got-Junk could be comparable, since they’re so diverse in what they’re selling. But if you think of all of them as widget companies, then the product isn’t important. What’s important is how they market those widgets.
That’s the point behind our new Retailer Revolution series, which will unfold over the next several months. We’ll be looking at a wide variety of companies that have nothing to do with vehicles beyond the fact that their employees drive them. But all of these companies sell or service widgets— and you do, too.
By presenting these companies and uncovering the secrets of their success, we’re hoping to provide you with a fresh outlook and a few tools that you may be able to incorporate into the way you work with your customers.
While it’s tempting to think online is going to be the only wave of the future, studies aren’t bearing that out
“Sometimes small business is a result of small thinking, and they just do not see the opportunities out there before them,” said Tom Shay, principal of Profits Plus Solutions, which offers online tools for retailers to help build their companies. “That’s not to say that big businesses don’t, but small businesses miss it (more often). If you think it’s all about the stuff that you sell, you’ll miss the big thing. It’s not what you sell, it’s that customer coming in the door.”
Some of the businesses we’ll profile started out solely as brick-and-mortar stores, and then got on board as online sales moved from a niche brand to a major method of commerce. But while it’s tempting to think online is going to be the only wave of the future, studies aren’t bearing that out.
A U.S. report by eMarketer found that while online purchases in that country totalled $200-billion in 2014, in-store purchases that same year were $4,050-billion. The researchers forecast that by 2020, U.S. online spending will rise to more than double that at $550-billion, but people will still visit actual stores to the tune of $4,900-billion in sales.
Meanwhile, a report by the U.S. Department of Commerce found that, in 2014, e-commerce sales made up only 8.3 per cent of total retail sales. People are still coming in to browse, to see, and to touch the merchandise before they hand over their cash. Even Amazon, which makes up the lion’s share of online commerce, plans to open several stores in select U.S. cities where people can see the products or speak with a live person before buying.
Of course, it’s easy for auto retailers to be a bit smug about the status of in-store commerce, because it still isn’t feasible for Canada Post to deliver a new car to someone’s mailbox, or for an owner to pack up a sedan and ship it back to the factory for its oil changes.
But that doesn’t mean that dealerships can rest on their laurels. Most customers are now doing at least some, if not all of their research online well before they come by to take a test-drive, and they’re coming into your store fully prepared.
An automotive study by customer-experience software and research firm MaritzCX found that product parity is increasingly the norm. As a result, the overwhelming majority of companies will have to compete primarily on the customer’s experience.
Forty per cent of customers repurchase from the same dealer, naturally with the majority coming from the “Completely Satisfied” group that you would find on a survey. Just moving each customer up a step, such as from “Fairly Satisfied” to “Very Satisfied,” increases the probability of repurchase, but it has nothing to do with the vehicle itself. Instead, it’s all about how the customer felt he or she was treated by the dealership.
What customers expect also plays a huge role in the transaction, and is based on what will happen once they walk in the door. They know how to order their favourite drink no matter what Starbucks they are in, or realize the level of attention they’ll receive when trying on clothes at any Holt Renfrew store.
Your dealership will have your OEM’s corporate appearance, but it’s up to you to ensure that your employees deliver to the level of your customer’s expectations and to the level of your brand.
That becomes even more important when you realize that today’s customers don’t value brand loyalty as their parents or grandparents might have, especially when it comes to vehicles. And when they have an issue, rather than talk to the service or sales manager, their first response is often to immediately air that grievance on social media.
Shay knows that as customer loyalty thins out, customer service has to step up to fill the gap. “In the last year, each of my twin sons have bought vehicles, and not one has yet had a call from the dealership saying, ‘How are you liking your car, did you take any friends in your car, got any friends looking for a car, how about bringing the car over and let us check it for you?’ They sold it and goodbye. What’s my reason to be loyal and tell anyone else about them?”
These are some of the lessons and tools that we hope to put forward by highlighting these non-automotive companies. Learning to be an effective retailer is far more than just low prices and balloons on the antennae. “I’ll ask a group of business owners, ‘How many of you think you give great customer service?’” said Shay. “They’ll all raise their hands, and then I say, ‘How many of you have a formalized program to educate your people how to sell, to answer the telephone, to take care of something defective? How many of you have a school where you teach this to people?’ and very few hands go up.”
Successful retailers keep their fingers on the pulse of their businesses. For example, Gallery Furniture operates three stores in Texas and does $200-million in business each year, with all employees handling transactions on iPads. When a customer wants to return a piece of furniture, company owner Jim McIngvale gets a ping on his device, and he evaluates how it was handled. It isn’t because he doesn’t trust his employees’ actions, but because he wants to be sure the customer is as satisfied as possible.
These are the types of stories we’ll be presenting, as we look at a wide variety of businesses to see what makes them tick. No matter what you’re selling, excellent customer service is always the key between a business that just survives, and one that thrives.
What customers expect also plays a huge role in the transaction, and is based on what will happen once they walk in the door. They know how to order their favourite drink no matter what Starbucks they are in, or realize the level of attention they’ll receive when trying on clothes at any Holt Renfrew store
