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!

Big-Ticket Online Shopping

This year I used the internet as a key resource for finding myself a new car. Obviously I wanted the best car I could get for my budget since I planned to have this car for at least five years. I had no clue what I really wanted other than that I wanted one that was in almost new condition since I have done the older cars and they were not to my liking. (to say the least)
I utilized an oft-publicized website of cars.com. It gave me choices in my price range and in my area. It helped me compare cars and make an informed decision about what kind of car I actually wanted. In the end I ended up buying a Malibu and it is by far my favorite car yet.
Why am I dicussing this? Shopping online is extremely easy to do these days. I actually do most of my holiday shopping without ever leaving my computer. The sheer volume of information that is available is astonishing. Stores are coming up with more and more ways to attract consumers to their websites and into their stores. Virtual tours and 360 degree images allow consumers a better look at the items they are searching for.
Just like my search for the perfect car on cars.com required a lot of information, it is important for retail stores to do their homework concerning online advertising. I have heard that online advertising is growing by leaps and bounds and will even exceed print advertising in some industries in the near future, if not already. It is not hard to imagine. Especially when you can go already order items from all over the world, yet another topic that is discussed to prove that it is truly a global economy. The stores that recognize the power of the internet are the ones that will grow in the future.

Barnes and Noble Move

There is an obvious connection between foot traffic and sales. It is common sense to suppose that the more people that walk past or into a store potentially increase sales from increased exposure. Fortunately for Woodland Mall stores, foot traffic will definitely increase in the years to come. Why? Its simple. Barnes and Noble is relocating itself from on 28th street to being included in the mall. Perfect for the other retailers, such as JCPenney where I work.

The first time I heard about the move it was from one of my bosses. He was excited because it would increase the number of people that come to the mall since book stores generate foot traffic. Oh, we can sit here and debate the intelligence of the move on behalf of Barnes and Noble, but don't forget that the store has to compete with Schuler's down the road. A bookstore that has ambience down to a science.That part is not up for discussion at the moment. The interesting part is that Barnes and Noble has discovered an error in their location and are taking steps to fix it. The 28th street location is behind restaurants and set back from the road. If you aren't looking for it, it is possible to miss it. How that is possible is unknown considering that it is a huge store. But, I know that it has since I missed it the first time I ever went down 28th street.

Location is key as I've said before, and I applaud Barnes and Noble for realizing and then ACTING on that realization. Information isn't enough...it must be followed by an action.

Credit Card Applications

There has been a lot of discussion lately about credit cards and the upcoming holiday season. Traditionally, many shoppers will purchase for Christmas using only their credit cards and will pay them off over the course of the year. Bad plan? Well, not always. It is better to pay cash when you can, but its not always possible in this day and age. Retail stores even rely on consumers using their cards, a big part of the reason why sales associates all over are required to ask you to sign up. I work in a major retail store and we are daily reminded to ask every customer to apply. It gets old for the associates too, I promise no one looks forward to asking, "would you like to apply for a _____ credit card? You'll save ___ percent!"
The correct answer should usually be "No thank you." It shouldn't be "NO! Stop asking." It is the associate's job to ask. Jobs are not so easy to come by these days that anyone is going to risk losing one just because one customer has had a bad day. That just isn't practical. So from one sales person to anyone reading this, "Sorry, thats the breaks. Just let it go in one ear and out the other. Thank you for patronizing my store and for not having a fit over something I can't change."
It will be interesting to see how consumers react to the upcoming season following all of the financial woes of recent times. Hopefully, (for my job!) customers will pay attention to what they are spending while still using credit cards that are so important for store sales. Oh, and if you make a big purchase... go ahead, say "Yes, I would like to apply." And then be smart enough to pay it off as soon as possible. Financial difficulties do not have to mean there will be nothing under the christmas tree, it just means that it might be wrapped in newspaper instead of custom wrapping paper.

Digital billboards

Has anyone else noticed the new billboards along the highways? They are like giant television screens. No longer does the billboard switch images by flipping individual pieces. Now the whole screen changes at once, truly a giant tv. Well, guess this is the newest way to fight the tivo craze. It will be hard to avoid commercials/advertisements on the way to work! The sheer novelty of the screen is sure to make it financially viable for the advertisers.

The first one in Grand Rapids is on U.S.131 near 28th street and created an uproar before it was even put up. Matt Vande Bunte wrote an article for the Grand Rapids Press that sums up the main concerns for the new advertising technology. According to the article, CBS Outdoor Inc. had to win a court battle before the sign could be used. Any other digital billboards will have to wait pending a decision on the zoning policies for the area.

A digital billboard is a completely new way of using a tried and true method of advertising. Businesses that use the new screens could see an increase in consumer attention, especially early in the adoption phase. The reality of a digital billboard is new, but for some it is just the next logical step. However, it could be a very important step. Consumers are inundated with ads and promotions, it is essential for a business to stand out in the minds of its customers. A new method of advertising could be just the ticket

Ahh Construction!

There are tons of different situations that can occur in the retail world. Choosing the right action and knowing when to act are two of the hardest retail decisions in my opinion. However, I have noticed that there are situations that develop that a retailer may not have direct control over. Reacting to those situations can make or break a business.

For example, all summer long there was construction on 28th street. 28th street has tons of businesses on it and is one of the key connecting roads in the area. One specific section of the road had construction constantly, which added about 10-15 minutes to travel time going through that area. I found myself wondering at one point this summer about how the businesses were surviving when there had to be tons of people avoiding the area like the plague. One specific business in particular: the gas station right near the highway which was basically completely blocked off from the usual last minute customers. I personally used to buy almost all of my gas at that station, since it was very convenient and usually pretty competitive price wise. During the summer, it became such a hassle that all I wanted to do when I reached that area was get out of it. I found an alternate way to work and an alternative gas station. It was not worth the hassles.

To make matters worse for those businesses in the construction zone, when the construction was "done" and the orange cones were removed there was a lull of about four days before the cones were BACK! This prompted me to once again use my alternate route and made me wonder just how many other regular customers to businesses in that area that were doing the same thing.

Another store on 28th street visibly affected by the construction was a store called "Williams Furniture" (no, no relation). They lost their lease fairly early in the construction process and did TONS of advertising to try to sell inventory throughout the summer. At one point, there was even a truck that drove around with a huge sign in the back trying to let people know about the deals they could find in the store. This seemed a little extreme when I saw the truck, but it may have been a very effective way of dealing with the construction problem. The traffic that would usually have driven past the store was using alternate routes to avoid the construction. The store used alternative advertising techniques in order to basically claim, "We are still here! Don't forget about us!"

Basically, I feel it is important for future business owners, (and current ones) to realize that outside forces have an effect on customers. Especially in Michigan, construction is going to be an issue, retailers should realize this and be prepared to make it worthwhile for consumers to navigate through the orange barrels to shop at their stores. I'm sure the retailers along 28th street were not exactly thrilled with construction occurring all summer. The end result may help traffic patterns and look pretty at the same time, but I still wonder if there are still people avoiding the street due to habit. Savvy business decisions matter for retailers, but its important to remember that if your customers can't reach you, (or avoid your area) then pretty soon you might have to put a sign out front that reads, "Out of Business."