From Home Furnishing Business
Coach's Corner: Choose Your Battles Carefully
By Tom Zollar,
By the very nature of our magazine, every issue we publish contains information and ideas to help the reader win more battles for the potential customers in their marketplace. The research we publish and advice we give is based on over thirty-five years of studying and analyzing what works and what does not work in our industry. I guess that means we know a lot, but it certainly does not mean we know it all. Therefore, it is always a good idea to search for other opinions and gain different perspectives by reading what others have to say about the retail marketplace and the impact of the changes in distribution channels we have seen in the past two decades or so. Just do a search on “Retail Marketplace Battle” and you will end up with hundreds of opportunities to learn from dozens of extremely qualified sources.
That’s what I did to prepare for this column, and it was very eye-opening how consistent the research was and how similar the resulting recommendations were, no matter who was writing the article or what part of the retail industry was being studied. It was reassuring in a way to see that most of what I saw was very much in line with what we have been preaching for the last twenty years, but what really came out of it is that there is no new quick fix or secret recipe to how we can be more successful. It all boils down to consistently being the best you can be at what you do and understanding what that really is in the eyes of your potential customers, so you can maximize your advantages and minimize your disadvantages versus each of your different competitors.
Today the big, bad beasts most home furnishing stores believe impact their marketplace the most, are the online retailers like Amazon, Wayfair and Overstock.com. However, there is also a huge amount of business being taken out of our local markets by the online efforts from other primarily brick and mortar companies like Walmart, Target and others. Sometimes we are so overwhelmed by all we see and hear about the successes of these efforts, that we lose sight of the fact it is predicted that roughly 80 percent of total retail sales over the next few years will take place in a physical store. That number is even higher, more like 85 percent, for the home furnishings industry and probably above 90 percent for much of the better furniture business. Therefore, while we can certainly try to minimize the loss of those sales, we also still need to get our share of the huge majority of the volume that will be available to us in the store.
One of the best ways to keep from losing any more customers to the online monsters, is by developing strategies that take advantage of what you offer the customer that they can’t provide. In the process, we can also learn more about ways to improve our overall effort, so we capture even more of those that choose to buy locally. Before getting down to some specific areas to work on, let’s start with a few common-sense thoughts that I gleaned from all my reading. Nothing new, but some good things to keep in mind as you prepare your strategic plan.
- Don’t chase something you can’t catch — We often tend to get so focused on one competitor or something we see done that looks like a good idea that we spend a great deal of time and effort trying to duplicate or outdo it. In reality, that ground may already have been taken and nothing we do will get us even close to the result we want. Be careful trying to be what someone else already is and try to develop your own unique and exciting approach to anything you try to be or do.
- Don’t try to out-Google Google — This is really an example of the above point but bears mentioning separately to better understand the message. While you should not strive to become another entity, you can and should certainly try to be more like those that are better than you in specific areas. In this case, learning how to handle online sales and customer service from one of the best in the business is a good idea, just understand your limitations and be the best you can be within reason.
- Don’t run from something that’s not chasing you — Similar to the first point, you need to be careful about who or what you perceive as being a real threat to your business potential. As an example, I have seen many stores try to duplicate merchandising selections from Pottery Barn or Restoration Hardware, without realizing that they are possibly not what their current customers are seeking. Again, trying to be something you are not out of fear that a competitor is coming after you can be dangerous if it takes you away from your customer base or reputation in the market. Probably best never to run where you have not walked first!
- Look at what others have done to win their battles, like Best Buy, Lowe’s and Home Depot. It is always best to study those that have encountered similar threats to their business and found ways to capitalize on their differences to not only survive but prosper. In their first few years of heady growth, it was estimated that Amazon took almost 30% of Best Buy’s business in home electronics, computers and accessories, which put that company on the ropes. Many predicted its demise, but they remade themselves and came out stronger than ever. Lowe’s and Home Depot also surrendered a good deal of their business initially to the online retailers, but they too managed to survive and prosper. In all three cases a major part of the solution involved capitalizing on their biggest difference – face-to-face contact with real people that can actually help them in their search for solutions to their problems.
- Best question to ask yourself and your team — What would make a customer choose to come to our store when they could go elsewhere or easily buy online? This is really critical to fighting the battle against not only the online retailers but also the other stores in or near your market. Today’s key to success is knowing how to differentiate yourself and then getting the message out to your target customers so they will come in and give you a chance to please them.
So, what is a customer looking for in their shopping experience? For years Impact Consulting Services, parent company to Home Furnishings Business, has conducted what we call Retailer Effectiveness Studies for our clients. Through extensive research we have defined eleven areas that consumers recognize as critical to the store shopping process. Others have defined lists like this as the Value Proposition of the business, which is a great way to look at it. The order of importance that is given to each one varies a bit depending largely on the age of the consumer, but the overall order is relatively similar across most markets. Here are the top five factors you need to be aware of when you look at what you are offering a customer and compare it to your competitors, including online retailers.
- Selection – This always seems to be right up there at or near the top in all of our surveys. Obviously the larger the store the more choice they can offer and the biggest “store’ is perceived to be the Internet. So here you need to do the best job you can at getting your message out about exactly what you offer and targeting it to the customers most likely to be interested in what you carry, because you cannot “out selection” Amazon and be everything to everyone.
- Price – This is a slippery slope with the way product pricing is all over the board. The early perception seems to have been that the best price is always on the Internet, however the public has begun to realize that is not always the case and they still need to shop around. Originally, the two biggest advantages online retailers had concerned the lack of taxes, which is going away, and their offer of “Free Shipping”. It is imperative that you and your staff understand the true cost of buying online and can honestly communicate it with the consumer so they can make an informed decision based on what their comparative final cost will actually be.
- Display – This is one of the areas that your store should have a distinct advantage, since you actually have a display and your customers can see, feel and touch the product before buying it. Research has indicated that this step in the process is extremely important for most big-ticket products, but it is very critical with purchases for the home that involve style, color and texture. Be careful though that you do not get “showroomed” as Best Buy originally did. They turned it to an advantage with the next factor.
- Salesperson – This one is a double edge sword in that many customers do not feel they want a salesperson, but almost all of them really need one. The big advantage here is if you can get the message across that your staff is there to help customers find what they are looking for, to make their experience easier and the result much better. Offering design assistance and in-home services helps, but even though sales people are one of your biggest advantages over online retailers, this is a hard sell to some consumers.
- Service – This is another area where the local store has a distinct advantage over the online retailer. It involves delivery and after the sales support. You must work hard to get the message about the value you offer in this area out to potential customers. They do not understand all that delivery involves and while older customers still value after the sale service, younger ones do not.
There are no easy answers and you need to be vigilant about making sure the message of what advantages you offer your customers gets through to them. That has not changed in the last fifty years. It has just gotten harder to do with all the selection available to the consumer and the tidal wave of information they must process.