Archive

Archive by topic: Retail

Office Depot/Office Max

March 6th, 2013

As you may recall, one of Renee’s Rules™ is “Two sick companies do not make a healthy one.”  

Based on my in-store and on-line customer service experiences with both Office Depot and Office Max, I predict that my rule will prove true for their upcoming merger UNLESS–and this is important–they hire a new, capable CEO for the combined entity. Although it is true that some of their troubles are attributable to the changing environment, the bigger problems is that these two companies simply are not well managed.

I rarely visited the Office Depot store in downtown Portland.  Store layout was horrid.  It simply took too long to find anything.  (Apparently, others felt the same.  The store is a ghost of its former self.)  The last time I tried to do business with Office Depot, I tried to use a coupon I received in the mail to make an on-line purchase.  The website would not recognize the coupon, so I tried calling.  When the customer service rep was unable to solve the problem after 15 minutes, I said, “Thank you very much” and have never bought anything from them again.  I really do “vote with my feet and/or my fingers.”

Office Max seems slightly better, but when I recently returned home from buying supplies at Office Max, I found a coupon that had started that day.  Really?

In the big picture, I am a teeny customer, but the examples above are symptoms of the kinds of problems that affect larger customers, too.

These companies–like too many others (ToysRUs comes to mind.)–simply do not pay adequate attention to operations and to detail.  They do not think about what it is like to be their customer.   The merger will extend life but is unlikely to produce a healthy entity.

 

 

 



Call centers off shore

November 26th, 2011

The New York Times today has a story, “A New Capital of Call Centers,” which focuses on the fact that many  companies with US customers are moving their call centers to the Phillipines or back to the U.S. because personnel in the new locations speak better English than, say, their counterparts in India.

Evidently, these companies believe that customers’ primary concern is the quality of the language used by the call center agents.  My primary concern, however, is whether or not the call center agent is actually able to answer my questions, solve my problem, and/or take my order accurately.  Overall,  I’ve had much better luck with the hard-to-understand foreign agents who seem to know what they are talking about than with US-based agents who are poorly trained and/or work in call centers in which no system is in place to help callers actually get their questions answered.

In brief, I wish companies would pay more attention to this Renee’s Rule™: Make my life easy.

What do you wish?

 

 



Barnes & Noble acquires Borders’ customer lists

October 10th, 2011

In May 2010, The Deal Pipeline quoted me saying that Borders could use its customer list as a springboard to increased sales of digital books.  To see how Borders was actually using its list,  I signed up as a Borders customer and for Google alerts about Borders.  I watched and waited for Borders to focus on sales of digital books through its frequent marketing emails.  It didn’t happen.

Clearly, however,  Barnes & Noble also saw value in the list.  B&N acquired the 45,000-member list during Borders’ bankruptcy proceedings.  As a result, as a “subscriber,” I received an email from B&N notifying me of the  acquisition and offering me an an opportunity to opt-out of receiving marketing emails.

I hope that Barnes & Noble will make better use of the names than Borders did.

 



Outlook for groupon et al.

June 20th, 2011

A picture’s worth a thousand words……

June 13th, 2011

It’s no wonder Sears is in trouble.  Their personnel training and software systems need help.

The situation:  A repair person came to perform annual preventive maintenance on my Kenmore washer and dryer.  When I showed the person that I could not get the lint screen clean, he offered to send me a new one because a clogged screen slows down the drying process and uses more electricity.

He ordered a replacement screen.  Sears sent the wrong screen.   It would not fit into the slot.

I called Sears to order a replacement for the replacement and carefully explained what had happened, including that the problem was  that the screen, itself, had lint that could not be removed by the repair person or by me.

Again, Sears sent the wrong part–but a different wrong part.  In the photo below, the original part is on the top; the second replacement part, on the bottom.  As you can see, there is no “screen” on the second part.

Original  and  replacement "screen"

Original and Replacement "Screen"

Here’s the worst part:  After getting the second wrong part, I tried cleaning the screen with a soft-scrubbing sponge–guess what?  It worked!  If the repair person had only been properly trained……

Sears’ cost:  Time for the repair person and the operators who took both the first and second orders + shipping for two parts + an unhappy customer.

 

 

 

 



Thefoundary.com vs foundary.com

June 13th, 2011

A professional friend recently pointed out to me that in my two  most recent posts, I was actually addressing the fact that www.thefoundary.com did not have a search function.   It still doesn’t have one.

On the other hand,  www.foundary.com, does have a search function but is likely just a site set up by a domain squatter to capture ad revenue from visitors who do what I did:   type in the wrong URL.

Or..is it?  Perhaps the people behind thefoundary.com are also using the name “foundary” in order to increase their revenue at a very low cost….

 

 



Foundary.com update

April 26th, 2011

In my last post, I questioned the wisdom of  Foundary.com’s lack of a search function.  In fact, I had actually sent an email to  them about this topic.

Here is a part of their reply: “Because we have a very limited, specialized, selection and each sale only lasts a few days there is no search feature.”

There is hope, however.  When  I visited their site today, there was a “Search” field…It doesn’t work for items on their site–it takes visitors to other websites–but I am hoping this means they listened and will develop an effective search function in the not-to-distant future.  If they do, I may shop there.



What are they thinking?

April 25th, 2011

Zulily.com and Foundary.com are websites that offer products of interest to me, HOWEVER, I don’t shop at either one because those sites have no effective search function.  There is no field that says, “Search.”

What are they thinking?  I assume they think people will buy a larger number of items if they have to navigate through lots of different pages to find something of interest because they’ll see multiple items they’d like to buy.

This may be a great strategy for shoppers who either live to shop or have plenty of time on their hands, but it may prevent busy people from doing any shopping at all on those sites.

Here is the question:  Are the total  sales to people with time to shop likely to be larger than total sales WOULD be if it were easy to search for specific items on these websites?  My gut feel is that if these websites had first-rate search functionality, they would land sales not only from people who have time to shop but also from those who are pressed for time.

Perhaps I live in a warped reality–but most of the people I know (all age groups) would prefer EASY and TIME-SAVING to CUMBERSOME and TIME-CONSUMING.



A retail trend I don’t like

April 22nd, 2011

Retailers are always trying something new to boost sales, but this latest trick, having NO price tag, looks like a mistake to me.

For people who live to shop and have plenty of time to do so, being able to see the price may not matter, but for busy people, having to take time to find a clerk in order to learn the price of an item of interest  is not only annoying but may also prevent them from making a purchase.

Take me, for example:  I definitely do not live to shop and, when I need something,  generally shop en route to some other activity.  A few weeks ago, I spotted the perfect purse at Nordstrom–exactly what I’d been seeking for almost a year: leather, waterproof, big enough to hold an iPad and to serve as a tote for carrying shoes, etc.  Perfect for trips to New York City.  It was not a necessity but would definitely have been  nice to have.

No price tag.  No price tag on the outside; no price tag on the inside.  The clerk was helping other customers but told me that not having price tags on purses was their new policy.   I was on my way to a meeting and couldn’t wait.     Nordstrom lost a sale.

Today, while hiking through a mall on my way to purchase a necessity,   I spotted the perfect gift for my granddaughter at a kiosk.  No price tag.  For that matter, no clerk.  Therefore, that kiosk lost a sale.

I suppose that the theory behind this no price tag strategy is that when customers have to ask the price, it gives the sales person a chance either to make the sale and/or sell different or additional items.

It would be interesting to know (but tough to measure) whether the benefits of this strategy outweigh the costs of lost sales.  I’m sure it is NOT a good plan for customers like me.



Best Buy takes my advice

April 18th, 2011

If you follow my blog, you know I see a strong need for smaller stores with limited products.  Bitten by the economy, retailers are buying into this approach.

Best Buy is reducing its footprint.  Also mentioned in the story?  Jo-Ann Fabric and PetSmart.

Still, it sounds like these size reductions are cost-cutting moves rather than a realization that many consumers seek and prefer a faster, easier, less stressful shopping experience.



Harry and David Update

March 23rd, 2011

There’s a very tight lid on communications from Harry and David. I don’t know what’s going on inside, but here are some things I do know:

1.    According to media reports, two lawsuits have been filed against Harry and David.

  • The first was filed by Drew Reifenberger, Executive Vice President and Chief Customer Officer, who was fired by then-CEO Steven Heyer in January. The basis of the lawsuit? Termination without cause and lack of contractually required payments.
  • The second suit, claiming almost $10 million, was filed last week by Convergys Customer Management Group (CCMG).  According to the suit, Harry and David and CCMG signed a 2-year contract which required CCMG to provide call center services and to hire an additional 25 full-time personnel during that period.  CCMG is requesting payments due under the contract.

2.    On February 18th, Harry and David announced the hiring of Kay Hong as “Chief Restructuring Officer and CEO.”

3.    Harry and David is hiring.  Careerbuilder.com shows 14 jobs that have been posted since Kay Hong was hired.  Positions advertised include store managers, Controller, Director of Online Marketing, Director of Market Research, and Manager of Website User Insights.  Nothing in the ads indicates that this is a “turnaround” situation.

What is the significance of all of the above?

With regard to the lawsuits

1.    When the contract was signed with CCMG in August, did Harry and David’s CEO and upper management realize that Harry and David’s situation was precarious?  If so, was it ethical to enter into an agreement it might never be able to honor?  Was it wise? If Harry and David’s CEO and board did NOT realize that the situation was precarious, they certainly should have.  Any competent turnaround CEO would have known that, but, of course, Wasserstein hired Heyer, who was not, in fact, a turnaround expert.

2.    Who signed the contract with CCMG?  Was it Heyer, or was it Reifenberger?  If it was Heyer, it raises questions about his experience, wisdom, and ethics.  If it was Reifenberger, is that part of the reason his employment was terminated?  Again, however, responsibility lies with Heyer and the board.  One of the first groundrules established by an experienced turnaround CEO is that material contracts require his/her sign off.

3.    Is the company not paying CCMG and Reifenberger because it is conserving cash so it can successfully navigate a planned Chapter 11?

With regard to “Chief Restructuring Officer and CEO”
—In my experience the title CRO is used primarily in a bankruptcy situation, so the title suggests that the company expected to file Chapter 11 at the time Hong was hired.

Hiring: If you follow my blog, you know that my assessment is that poor quality control coupled with poor customer service have contributed to the problems facing the company, so I am happy to see that they MAY finally  be focusing on the customer experience.  One caveat, however:  when I advertise for positions in turnaround situation, I usually try to let applicants know right away about the situation facing the company.  Some people love a challenge.  Those are the people I am looking for.  I have met many people, however, who have been recruited into troubled situations in which the executives have failed to disclose the company’s situation.  Shame on the companies!

On a different note:  Perhaps the recruiting is a signal that management believes that Harry and David can, in fact, survive.



Retail: Walmart takes my advice

March 11th, 2011

If you read my January post  “Size DOES matter: The Pop-up Principle,” you know I’ve been saying that smaller stores that offer a narrower selection may prove more profitable for retailers because smaller stores accomplish two important things:  Done effectively, they both reduce  retailers’ costs AND provide a faster, less stressful shopping experience for customers.

Now, Walmart appears to be taking my advice.  See article in the Huffington Post today.

In the case of Walmart, smaller stores will not only offer the advantages I’ve listed above but will also make Walmart’s merchandise  and low-prices accessible to new customers who currently don’t want to or can’t travel to their super-sized stores.



Trends 2011- #2

March 6th, 2011

I promised to provide a series of posts regarding my predictions for 10-year trends.  So..here is the first:  Over the next 10 years, at least one appliance maker will figure out how to produce reliable, long-lasting appliances at a moderate cost.   (I am thinking particularly about ovens and refrigerators.)  These appliances will sell like the proverbial hot cakes.

Their success will be driven by three things:

  1. Consumer demand for appliances that work and require few repairs
  2. Improved production technology that will produce such appliances more cheaply than is now possible
  3. Viral “advertising” via the internet as consumers discover that such appliances exist

I hope this is not wishful thinking…….



Borders’ loyalty programs

February 28th, 2011

I just read an on-line article dismissing the value of Borders’ loyalty programs.

Can loyalty programs resuscitate the ailing chain?  Alone?  No….but they can help.  The primary value of Borders’ loyalty programs is that they provide digital mailing lists which can potentially be used to prompt customer purchases.

So far, however, Borders has not used those digital mailing lists effectively.  They appear to present a hodge-podge of offers rather than a targeted list.  If I were Borders (or any other bookseller), I would send two distinct kinds of emails:  one set that touted digital books that could be read on digital readers; another set that promoted printed books.

Can anything save Borders?  Too soon to tell, but my guess is that every serious reader is hoping that the chain will survive.



What does a turnaround expert DO?

February 21st, 2011

I have recently been asked by reporters, “What would you do at Harry and David?”

I responded with a description of the turnaround steps described below.  Those steps are always the same, but the specifics vary from project to project.  (When I spoke with reporters, I also discussed some of the situation-specific actions I would initiate.)

My S.O.P. (Standard operating procedure)

  1. Get total control of cash
  2. Prepare short-term cash forecast
  3. Select Turnaround Team from key, existing management team members
  4. Convene the team; go through financial statements line by line–first, looking for ways to improve short-term cash situation, second, identifying ways to increase revenues (and/or margins) and decrease costs — (note: understanding the financial statements inside and out is critical!)
  5. The result is a written plan that includes a list of who is responsible for achieving what results by which dates and financial projections, which are the numeric representation of the plan.
  6. Then, it’s time for the team to implement!
  7. Design and begin  implementation of a sound management control system if one does not exist
  8. In the meantime, there are generally crises to contend with and negotiations with a wide range of stakeholders.

In addition to the above, I also send a web-based confidential survey to all employees.  The employees know what’s wrong, what needs to be fixed, and often see things that people at “corporate” miss.  Surveys to vendors and customers can be equally enlightening.

The above steps make it sound like the turnaround process is an orderly one, but it’s not.  Leading a turnaround is like being a general on the battlefield.  It’s messy and fraught with peril.   You have a plan, but unexpected crises are constantly arising.  I always tell prospective clients that it will feel like the opening scene from Saving Private Ryan.  One of my favorite owner/clients used to stop by my office occasionally and say, “I’m having a ‘Saving Private Ryan’ day.”



Did e-readers kill Borders?

February 18th, 2011

It’s easy to blame e-readers and associated technological changes for Borders’ predicament, but they are merely the symptoms and not the disease.

When companies face the double whammy of game-changing technology and a sagging economy, they simply must have a sound strategy and consistent, capable, visionary leadership. Since 2005, however, Borders has had 4 different CEO’s.  How could the company possibly develop or effectively execute a company-saving strategy while there was a revolving door at the entrance to the executive suite?



Size DOES Matter: The Pop-up Principle

January 31st, 2011

Everybody did it:  Borders, Burlington Coat Factory, Dick’s Sporting Goods, Toys “R” Us and others all opened “pop-up” stores for the holidays.  This year, Toys “R” Us alone opened 600 pop-ups instead of the 90 they had last year.

What many retailers seem to be missing, however, is that, with the exception of the short-term leases, the underlying principles that make this boost-holiday-profits strategy successful also provide the underlying principles for improving the bottom line year-round.

Here’s why:  In an ideal retail world, retailers would stock only products with the highest margins, the least waste, and the lowest product-related, facility and personnel costs.

Pop-ups, therefore, are close to the ideal retail because only the most popular, highest margin items are on the shelves.  As a result, fewer square feet are required.  There are fewer sku’s to stock and track, and, at season’s end, there are fewer items remaining.  Those that do remain are the fastest moving and most desirable.  In addition, it’s easier for customers to find things, so personnel can spend less time helping customers find things and more time ringing up sales at the cash registers.  This means shorter customer waits in the checkout lines and/or fewer personnel. Last, but not least: there is no long-term lease expense to drag down the bottom line during the slow seasons.

Except for the short-term, season-only leases, why don’t more retailers apply these same “pop-up” principles to their year-round strategies?  Evidently, somewhere along the way to too many marketing plans, too many people bought into The More Choices Fallacy; i.e., retailers need to carry every product under the sun in order to entice customers into their stores.  The results for too many retailers?  Shrinking margins and turned-off customers.

It’s time to rethink this More Choices strategy because offering fewer choices might well lead to both increased revenues and improved profitability.  Stocking fewer sku’s might increase revenues by making it easier, quicker and more pleasant to shop, and stocking fewer sku’s can reduce expenses across the board.

Increasing revenues

Barry Schwartz, in The Paradox of Choice: Why More Is Less, makes the case that being faced with an overabundance of choices can be both overwhelming and stressful. In fact, he cites evidence that customers are actually less likely to buy when faced with too many choices.  If retailers started measuring sales lost due to customer frustration, the results would likely be staggering, and today, every sale counts.

  • Having too many choices complicates decision making and, therefore, makes shopping take more time.  For many prospective customers, time is a precious commodity.
  • When there are too many products, customers are often frustrated because salespeople either can’t locate the merchandise or can’t answer questions about it.  There are simply too many items for sales staff to master.
  • On top of that, as every shopper knows, many products’ additional bells and whistles don’t work as well as their simpler, less snazzy predecessors—people lose faith in those brands.

Reducing costs

Stocking fewer sku’s can also improve the bottom line by reducing costs.  After all, the more distinct products a store offers, the more people, space, etc. will be needed to support those products. When retailers offer a smaller, carefully chosen number of selections, they have

  • Fewer sku’s to order, transport, stock and track
  • Fewer products personnel need to master
  • Lower facility costs because less space is required
  • Less undesirable, unsalable merchandise left over

Real-life examples

In my neck of the woods, Portland, Oregon, Babies “R” Us and Uptown Hardware in the Pearl District provide a study in contrasts.

Babies “R” Us, with its vast array of goods, almost certainly faces a huge percentage of lost sales.  Almost no one I know will shop there.  It’s too hard to find things; clerks aren’t knowledgeable or available; the lines are too long; the baby registry is broken, etc.

On the other hand, Pearl Hardware, a small store located in a gentrified area with many high rises, is like a beacon in a storm to every shopper I know, male and female; young and old.  Why?  Whatever we need for our households (other than large appliances and furniture), Pearl Hardware has it.  Need stainless steel cleaner? Paint and painting supplies?  A serving dish for that dinner party tonight? Screws, tools, garden and cooking implements? Pearl Hardware has them all. Although the store offers only a narrow assortment of each type of item, every item the store does carry, without exception, is of good quality.  If we need something for our homes, Pearl Hardware has it, so that’s where my friends, neighbors, and I go.  In the meantime, some other retailer is losing those sales because that retailer simply stocks too much stuff that’s too hard to find.



A retail story fit to print….

January 16th, 2011

Well… after I wrote last night about my frustration with news media reporting only part of a story, my local paper, The Oregonian, ran a wonderful story today by Laura Gunderson describing the success of a local retailer, Kitchen Kaboodle.

According to the story, someone (unnamed in the story) in the company had the idea of being open only on days that are traditionally profitable. Changing the days open plus lowering prices, according to the story, has allowed Kitchen Kaboodle to return to profitability.

The story about Kitchen Kaboodle is one of those unusual circumstances in which the entire story can be told–well, in which the company actually wants to share both the revenue and profit side of the story. Their problems are widely known locally, so it’s helpful for them to share all.

Besides, everyone likes a good turnaround story.



Retail sales: Compared with what?

January 16th, 2011

In an article yesterday on The Huffington Post, Abby Wendle reported that retail sales increased for the 6th straight month.

This is good news, but how good is it? How do the sales of the most recent 6 months compare with the same months in 2006, 7, 8?

I don’t have the answer to that question, but tomorrow in my blog I will ask the same question about unemployment statistics. For that question I do have the answer.

One of my pet reporting peeves is a story that omits critical information (facts) that would allow the reader (me) to draw some conclusions about the significance of the story.

On several occasions, my local paper, The Oregonian, has reported the remarkable increase in revenues for some local company but has failed to include what is happening to the bottom line. In several instances, companies that have touted their revenue increases in the press have failed not long after.



Technology can be a game changer.

June 1st, 2010

Last week, The Deal quoted me as saying that technology just might give Borders a second lease on life.  Links to the article are available only to The Deal subscribers, so let me explain.

As you may know, financier Bennett LeBow recently invested $25 million in Borders and became its Chairman. That $25 million infusion will buy Borders some time, and a combination of savvy marketing and the savvy use of technology may dramatically improve the company’s prospects.

  • Technology has transformed the marketing battlefield.
  • Although Borders is late to the digital distribution game, the company has a key, not-to-be-discounted asset made valuable through the wonders of current technology: The list of 30-million email addresses they have accumulated through their “free” Borders’ Rewards program.
  • That list is a springboard that will allow Borders to promote its new digital offerings rapidly to a massive, already existing database of customers.
  • Current technology will allow them not only to reach those customers but also to know the book-buying  preferences of those customers.  In addition, Borders will be able to send personalize emailed “pitches” to the 30 million—right away—without delay and at a relatively low cost per customer.
  • As a result, Borders will likely attract digital book buyers quickly at a low cost-per-customer and per-purchase.

I, personally, would not invest in Borders now, but it’s premature to count them out.



Eddie Bauer Bankruptcy

June 18th, 2009

Pearl Ace Hardware: A beacon of hope in an ocean of dreadful customer service

June 6th, 2009

When I’ve abandoned almost all hope of ever finding good customer service anywhere ever again, I stop by Pearl Ace Hardware to reassure myself that there IS actually ONE place that really “gets it.”

Pearl Ace Hardware may be the best store on the planet. On-line reviews reflect this, and all of my friends and neighbors feel the same way.  I’ll bet that this is one retailer that  is profitable  in spite of the downturn.

Why? Because this store truly understands the marketing equation:

Renee’s Rule™:  Providing what your customers want/need + great customer service = loyal customers +  steady stream of revenue.

They ALWAYS have what I need.  They ALWAYS have knowledgeable, friendly staff available to help.   No problem finding what I seek; no trouble finding someone to answer questions; no long check-out lines; no surly clerks.   It is Customer Service Heaven on Earth!

When I check out, I inevitably find myself saying to the clerk, “I just love this store!”   (And trust me, Reader, I am P-I-C-K-Y.)

Some retailers compete by having the largest selection of merchandise–being a “one-stop-shop.”

Some compete by having great “customer service”–being super-nice to customers.

Too many businesses have neither; too few manage to have both.

If every cloud really does have a silver lining, perhaps the silver lining of this downturn will be that we will see a return to first-rate customer service.  After all, survival may depend on it.

Renee’s Rule™:  There is a connection between customer service and sales.



I love being right, but..

April 11th, 2009

If you know me, you know I love being right, but lately, I wish I weren’t right so often.

When The Oregonian, interviewing me for a story about the Joe’s bankruptcy, asked whether I thought Joe’s could survive and/or might be sold to another company, I said, “No.”  Yesterday, Joe’s started liquidating.

The evaporation of so many retailers is a scenario being repeated too often for three key reasons:

  1. Many retail operations operate with thin profit margins–or no profit margins–so when sales decline, the retailers simply have no (forgive the pun) margin for error.
  2. Many retail operations have no raison d’etre–no reason for being–no strategy that separates them from their competitors, no strategy for meeting changing consumer needs.
  3. Too often, good customer service is missing in action.  Poor customer service can result in lost sales, and few companies today can afford to lose those sales.

Perhaps, as a result of the current economic environment, we will see a return to good customer service.  I’d really like to be right about that!