Retail is Burning

I noted with great interest an AOL Money survey, where they asked AOL subscribers to tell them which retail chains they felt were in danger of going under, and why. The editors chose 5,000 replies at random, tabulated the results, and then listed the 32 most common replies on the website. It's not the most scientific poll ever taken, but it is interesting to see which stores turned up on the list, and the complaints that repeat over and over again -- especially if you have spent any time in Retail, because most of the "errors" being highlighted are all things that any sales clerk making minimum wage could explain must never be made. And while I don't believe the participants are correct on all of the chains listed (Starbuck's isn't going anywhere unless McDonald's manages to do them in - and I don't see that happening any time soon), it's still worth taking a closer look at the most common problems.

First of, there's customer service. Almost half of the examples given are being hammered for poor service, insulting service, or just plain lack of customer service. This is the heart of the Retail industry; it's a truism in retail that if you don't take care of your customers, somebody else will, and most companies spent the bulk of their training programs on customer service standards and how to meet them. Yet, anybody who has tried to summon help in a department store, or for that matter, purchase anything, knows that too many companies are ignoring this simple rule...

Nearly as common are complaints about the condition of the stores themselves; whether dirty, poorly lit, badly set, disorganized, without air conditioning or badly stocked. People are not going to go to a place if they don't feel comfortable there, and they're certainly not likely to spend money in a place that looks like Beirut on a bad day. Nobody really wants to feel as if they are shopping in a war zone somewhere in the Third World, and the merchandise found under these conditions is likely to be perceived as dirty, broken or old, even when it isn't.

Which brings me to the third common problem: the merchandise. If you collect together complaints about stores selling junk, stores selling merchandise for too much, and stores without enough inventory to sell anything in the first place, these complaints are actually more common than either of the other two types. You might think it would be elementary that you can't make sales if you don't have anything people want to buy, and it's almost as hard if you don't have any prices that people want to pay. Apparently, you would be wrong.

Now, what's important about this issue is actually twofold: first, keep in mind that nobody SETS OUT to create an inferior retail experience. These types of problems - core incompetencies, if you will - develop over time as the result of widespread institutional failure. Merchandise costs are cut to save money; supervisory personnel are kept to a bare minimum; hourly personnel are given as little training as possible and paid the minimum wage (or sometimes less, if on commission); store maintenance and decoration are left to the local staff, and sometimes not even supported with funding, let alone materials. Simple erosion will cause all of these problems over time, unless the management team is constantly vigilant, and even then standardization issues (as mentioned in my last post) are still going to come up.

Second, and possibly even more important, is that if you are in retail you WILL eventually face one or more of these issues -- and if you're not, you will eventually face your industry's equivalent. Are these problems catching up with your business? Don't you think you ought to go and check?