The Ladder

I have been glancing through my blogs and I noticed that I tend to look at the retail industry with an "FYI" approach. As in, this is what you should look into before starting your own business or as a manager what key aspects are important. This is potentially the sign of many a marketing course as well as over 8 years of retail experience as an employee. Scarily enough, soon I will be on the other side of the employment ladder. OK, maybe just one small rung up the ladder. But this last year has had me trying to see the retail industry from three different sides: customer, employee, and employer.

There are so many facets to the retail industry. So many different choices and ways of doing things. Make the right choices and succeed. Make the wrong choices and, well, you won't have to worry for long. It makes this industry exciting and scary all at the same time. Fortunately for me, I love a challenge!

Ambiance

"Jingle bells, jingle bells, jingle all the way..." and you know the rest. Heard this song lately? I have. Christmas is everywhere, not least of all at my work. The Salvation Army bell-ringers are outside JCPenney stores and in some cases they are a sight to see! The Christmas season seems to spark the need to be generous even in hard times. Yesterday night I worked the cosmetics counter and was treated to a serenade of Christmas songs, as was every other person who walked past the store. Three college age girls were the bell ringers for charity, complete with hand bells for all and I think I even saw an elf hat! They sang for at least 45 minutes ranging from "Rudolph the Red-nosed Reindeer" to "I'm going to let it Shine." And they were actually pretty good!

During the holiday season it is easier to see how ambiance affects a customer's buying habits. The customers that walked through that night listening to those girls sing Christmas songs weren't in as much of a hurry as the ones from earlier. And there was a definite change in the amount of donations that were given. This is a seasonal story, but can be a prime example of how an upbeat atmosphere can help sales in a retail store. Music, scent, and layout have all been discussed in class to be ways for stores to differentiate themselves and put customers at ease. This was aptly demonstrated by the group of charity ringers.

Doom and Gloom

In contrast to most of my other blogs, this one is simply focusing on a changing industry. Big news in Grand Rapids has been the final show and closing of Studio 28. The reasoning was publicized as being too expensive to operate and so the famous movie theatre was shut-down.

Even landmarks find it hard to survive in times of financial difficulty. Workers who have had the same job for 20+ years are finding themselves back on the market. Unfortunately for those same individuals, they are often over-qualified for the jobs that they can find. Not to mention the fact that the salary would most likely be drastically reduced as well. These same individuals also have to compete with new college graduates, as well as with competition from around the world in the current global economy. Unfortunately this is a fact of life in Michigan at the moment.

Michiganders are used to stores closing and businesses leaving the area. Unfortunately there is no bright shining light at the end of the tunnel. Not that I view the situation as bleakly as the professional analysts do, but no one can deny that Michigan isn't doing well. The economy affects us all and retail stores take a huge hit. Its all in the numbers for many stores. Stay here and provide jobs for as long as possible or leave and stay afloat. This debate has gone on for years and with all the hype about outsourcing will continue for years as well. Here's hoping that the bright light is merely hiding around the corner.

Customer Service

In my opinion, customer service is the undisputed king of retail. I work at JCPenney and customers come in and are pleasantly surprised when I can find them an item or order it for them with a minimum of fuss. I have lost count of the number of times that I have heard that the customer had been to other stores and the store's associates did not even know their own merchandise! Just as those customers do, I expect more when I go to a store knowing I will pay more money than if I was willing to just go to a mass merchandiser for the item.

I am even more exacting when I am in a restaurant. I am one of those individuals who will *politely* discuss a situation with a manager if something is wrong with my service. I give the server time to remedy the situation, but he/she better try to fix the problem, or at the very least acknowledge that it exists.

If I am out at a sit-down restaurant I expect that if my water glass is empty, that within 15 minutes the server will be back to ask if I want a refill. This does not seem extreme to me, simply what I am paying for. In my defense when my service is good, I am a great tipper. I appreciate the extra effort and will reward accordingly. However, bad service will result in a tip of merely 10%. (I have never not left a tip, but I did calculate 10% down to the last penny once.)

Customer service is an oft-repeated phrase in retail, yet it is extremely important. Brand loyalty was mentioned in a previous blog, but is important here too since customer service can help develop it. For example, whenever I visit my parents and they ask where I want to go it is typically a choice between Max & Erma's and Ruby Tuesday's since I usually want a salad. I love the food at both restaurants, but sometimes the higher degree of service that I have received at Max & Erma's makes the choice easier. Customer service is more than just a phrase, it is the core concept that has kept businesses afloat even when times are tough.

Retail Seasonality

I recently had the opportunity to visit Frankenmuth, Michigan. The entire city lights up around Christmas time. Of course, my visit was not complete without a stop at the Bavarian Inn for supper and Bronner's Christmas Wonderland. Bronner's could probably be seen from miles away at night with all of its holiday decorations lit up around the store. The interesting part of this area though, is that it has managed to become a destination spot that is more than just during Christmas time. World famous chicken dinners
and a truly authentic German history has helped make this city a must see destination for Michigan visitors.


Retailers that deal with seasonality have a difficult task before them. Having the right items at the right time is no easy feat. Frankenmuth retailers have managed to develop a sustainable competitive advantage, but I bet it was not easy. Merchandise retailers have their work cut out for them when they choose to sell items that are specialty items instead of staples. If they buy the item too early then it sits on a shelf and takes up space better used for something else. Too late and the customers have gone elsewhere in search of the product. Many strategies exist for inventory monitoring and merchandise ordering. This is another key aspect to keep in mind when starting or managing the purchasing department for a store. A manager needs to know his/her products, but also their customers. When it comes to seasonal items, the more knowledge about buying habits the better. Fortunately for the Bavarian Inn, Zehnders (sister resaurant), and Bronner's Christmas Wonderland; food and Christmas shopping never go out of season!

$ Pricing Made Perfect $

An interesting aspect of the upcoming Black Friday, is the actual sales themselves. Consumers really consider the deals on the day after Thanksgiving to be the best of the season. This may have been true years ago but I would argue that it is no longer the case for the most part. Yes, there are always products that have such a high demand that they sell out all in one day and in that case being first in line is important. However, coupons for this item and a sale price for that item are not always the lowest prices of the season anymore. Yet, so many people still choose to shop till they drop...literally in some cases.



A part of the retail industry that I find interesting is the promotional aspect, especially at the department store level. Every line of clothing has a marketer behind it trying to make it the best seller of the season. Sales to promote inventory turnover, sales to generate word of mouth for a new line, sales to free up space, all are promoted in one form or another even if its just using in-store signage.

I think it is a delicate balance to figure out what consumers want in regards to promotions. Too many and regular suggested manufacturer prices will always seem too high and consumers will expect the sale prices. Too few and the product may sit on a shelf gathering dust because it is priced out of trial range for many people. This is an aspect of retailing that I think would be very easy for a new store owner or manager to make mistakes in. Pricing is a tough job and in large department stores has an entire department devoted to it. I think it is important for all new retailers, (and established ones)to continuously consider their pricing strategy.

Brand Loyalty War: Fast Food Style

I have recently realized exactly how much money I spend on fast food restaurants. Trust me, the amount is amazing considering that I hate to cook, therefore I tend to eat out. There are so many options that you do not have to eat the same thing every time. However, if you were to check my food history I would say that 4 out of 5 times I chose to eat at Burger King over any other fast food restaurant. However, if you check my roommate's history she tends to eat at McDonalds when choosing to eat fast food. The topic of this blog focuses on brand loyalty.

I don't believe that it is the difference in the food that makes me choose one place and my roommate another. A cheeseburger is just a cheeseburger when everything is set side by side. We both take all the extra sides off and can order basically equivalent meals from both places. There has to be another reason why we choose different restaurants when they are literally right next to each other so neither is more convenient than the other.

I believe it is a developed brand loyalty to each food retailer that influences us. My roommate loves playing the monopoly game from McDonald's and even when the game isn't going she still goes there first. I have memories of eating at Burger King with all of my siblings.(And to be honest, I'm terrified of clowns so Ronald McDonald never really had my vote!)Past perceptions affect current behaviors.

Brand loyalty is an essential aspect of retailing, it helps the business grow and expand. A brand loyal customer will go out of his/her way to find that restaurant or store. A brand loyal customer provides word of mouth advertising that could not be bought. Brand loyal customers will be a steady customer base and is an important group for every type of retailer to develop and continue to satisfy.

This is why so many companies spend millions of dollars on advertising. Advertising can set one company against another even when the products sold are decent substitutes. For some retailers this is easier said than done and keeps advertising agencies hopping. In some retailing industries, it is not so much the product being purchased, but the service and connotations for that retailer that brings the customer back time and again. For me, a McDonald's cheeseburger tastes just as good as a Burger King cheeseburger; but you will still find me waiting in line at the Burger King. Besides, in my opinion Ronald McDonald is still a little scary!