Monday, January 28, 2008

7 Things To Do When Business is Tough to Get!

By Jim Dion, Founder & President, Dionco Inc.

Retailers are struggling yet again with the grim outlook of the economy for the months ahead. While some argue that if and when a recession is coming, it’s not going to stay for long (6 months at most), or affect consumers’ confidence in a dramatic way, others are voicing far worse predictions. I stand in the middle- looking at what’s happening without worrying too much about it, and rather than sitting back waiting for it to pass, I look for opportunities.

When business is tough, retailers have a unique opportunity to stand out and make a difference for themselves and their consumer. After all, many studies have shown that in times of tight money, consumers don’t necessarily spend less. However, they spend their money more cautiously and wisely- or with companies that deliver an extraordinary shopping experience.

I deliver many keynote speeches on consumer and retail trends around the world, and one of the underling principles for all current and future trends is that in economies of abundance, it is all about shopping for experience and excitement. I also teach that while you may not be able to own a category like “Best Bookstore In Town” (not unless you are Barnes & Noble or Borders), you can own an experience that will excite your customers like “Best Personalized Service in a Bookstore.” Our economy, while possibly heading to a downturn, is still an economy of abundance, and it’s these times when we feel uncertain about the future, that there’s a desperate need for excitement and experience. Consumers need it and you need it!

So, the question you need to ask yourself is “How can I excite my customer and deliver an extraordinary experience?”
Here are 7 things:

1. Create Traffic-Stopping Stores
Humans are visual. If they like what they see, they buy. It’s not just the product that they need to like. It’s the ambience, the lights, the POP signage, and the packaging. Look at your windows- what have you placed in them that would stop a customer and invite them in?

2. Create a Sensory Experience for the Customer
Thuy T. Tranthi of London-based men’s shirts retailer Thomas Pink, once said, "I want to make sure that the customer has a wonderful feeling of being transported to a different place when they enter one of our stores.” This occurs when we enter a store and are surrounded by light, color, texture, and sound. Interactive retail environments deliver an incredible experience, too. Think of the Apple stores, where products are used as a visual tool and customers are encouraged to “play.” In-store demonstrations also contribute to an exciting experience for the customer.

3. Photograph Your Store
Photos allow you to freeze things in time and to look at them more closely. When you examine the photos, what is it that you have done well? What does not look right? Are those props that you used for your Valentine’s Day windows too prominent making products less visible? Are those price tags too worn out giving the look of “playing” store? It’s amazing how looking at things in 2-dimension enables you to notice things that you wouldn’t see just standing in your store.

4. Provide Professional Service:
Approach and educate the customer on your products’ benefits. Thank them and invite them back. Think about how product demonstrations have evolved since the advent of the Web! Customers conduct extensive research on the web and they come to the store more informed than the store associates. Are your sales associates ready for this challenge? Also, do your sales associates know how to sell solutions to the customer’s needs instead of just products? If a customer wants an espresso coffee machine, do your sales associates know what else to recommend to make sure that the customer has everything they need to make the perfect espresso (espresso cups, Italian coffee beans, milk steamer cup, sugar bowl, etc.)?

5. Play “Give Me 5”:
Do this with your staff at every opportunity. Ask them to choose five products that would go with each item in your store for a total solution. Have them practice this everyday until they do it automatically. Make sure they do it with every customer.

6. Develop Special “Bundle” Packs:
Especially for Holidays and gift periods, putting packages together that contain related items, wrapping them, displaying them and pricing them attractively (“in packages”) is the best strategy to sell more and get a better, more exciting solution for the customer. I call it “suggestion selling for dummies!” Make sure to do this not only at holiday time, but all the time.

7. Mine Your Customer Database:
I am always amazed at how many companies I have shopped with over the years, no matter how much I’ve spent with them (and sometimes it’s a lot), who do not encourage me to stop by to check out their new line of products, or to attend a demonstration. Segment your customers by keeping track of their purchases, wishes, needs, dreams, and other information. Review your list of best customers weekly and send them postcards, letters, or e-mails with information on items that they might need, new arrivals, events in your store, events in the community that might interest them, national events, promotions, and/or VIP previews. Remind them that you are there for them and give them a reason to come and visit you.

For more insights on these and other topics, visit Dionco Inc.

Jim Dion is an internationally known consultant, keynote speaker, trainer, and author of the best-sellers "Retail Selling Ain’t Brain Surgery," "It’s Twice As Hard," "Start and Run a Retail Business," and "The Complete Idiot’s Guide to Starting and Running a Retail Store."
Jim consults, trains and speaks on consumer trends, retail technology, selling and service, retail merchandising and operations, marketing and leadership.
A writer for hundreds of national and international trade magazines and a regular contributor at, Jim is consistently ranked at the top for his insights and practical advice. He has also appeared on NBC, Fox News, First Business and CNN Turkey.

Thursday, January 10, 2008

Unsolicited Strategy Suggestions For Starbucks’ CEO

I’ve been following the news about Starbucks founder Howard Schultz taking back the reins as CEO of Starbucks, and the under whelming plan of attack the company has laid out has left me scratching my head a bit.

Tuesday’s edition of The Wall Street Journal quoted Schultz saying he would slow the pace of new store openings in the U.S. (the company had planned to open 1,600 stores) and close some struggling locations, and instead accelerate expansion overseas. Beyond those changes, the only strategic shift mentioned was to improve customer experience at U.S. stores. With their share price down almost 48% from a year ago, I would have expected a more aggressive plan to fuel the growth engine.

I’m all for focusing on the customer experience, but I don’t think that area is where Starbucks needs the help. In my opinion, their stores are still the gold standard, and most of their current customers are extremely loyal. I would suggest the focus for Starbucks ought to be on attracting new people into the tent by taking a harder look at their marketing and menu items.

Now I’m sure Schultz has a lot of people sitting around the table in Seattle figuring out how to right the ship, but based on what I’ve seen so far, I think they are missing some obvious opportunities. Here are my unsolicited suggestions for Starbucks on kick-starting sales and share price:

Ramp Up the Outreach: Much of Starbucks’ meteoric rise was driven purely through word of mouth. Their customers were so passionate, they actively told friends about their experience and once someone sampled the product, they were hooked on the taste and the experience. Now with over 10,000 locations and McDonald’s making a push to grab a larger share of the coffee aficionados, Starbucks will have to work harder to draw new people into the tent. Given the targeted, creative messaging the retailer does in-store, I’d love to see the retailer be more aggressive with email marketing, social media, and other marketing platforms.

Expand The Menu: In the interest of full disclosure, I am not a coffee drinker, but I have still spent a fair amount of time in various Starbucks locations consuming their other offerings. I am a big fan of their breakfast sandwiches, but find their menu around lunch and other day-parts to be a little limited. I think this is a shot for Starbucks to turn the tables on McDonald’s and really ramp up its menu of food offerings and other non-coffee beverages.

In particular, I’ve always thought there was a missed opportunity for Starbucks to become a destination for desserts –think Cheesecake Factory without the long lines. In his letter to customers on the corporate website, Schultz did promise new beverages and products, so it will be interesting to see what they have planned. I would suggest they look closely at Dunkin Donuts, which has consistently done a great job of adding new flavors and then building up excitement around them with promotions and marketing campaigns.

Take Advantage of the Traffic: Starbucks had done a great job of branching into ancillary businesses, with music being the most obvious example. But considering the captive audience they have of devoted customers who spent considerable amounts of hours in their stores, there should be a way to cash in further on that traffic, maybe by branching beyond CDs into books, magazines, etc.

Every retail concept has a saturation point and with a Starbucks on every other block in major metro areas, Starbucks may be running out of room for growth. But considering the revolutionary job they have done in creating a great customer experience and building an extremely loyal customer base, I’m not betting on that just yet.