Why Brick & Morter Retailers Are Joining the Boneyard
#Americans have a great thirst for buying large quantities of things at the cheapest price possible.
This thirst has led many consumers to lower their standards of the “customer experience” and far too many CEOs are buying into that notion, setting a low bar with disengaged workers, shoddy check-out procedures, limited inventory and surreal difficulties in getting basic problems solved. Sound familiar? But, when a retailer tries to compete with Amazon by cheapening the experience, why would a consumer leave home? This dilemma is impacting even the most hallowed names in retail.
In the 80s, Nordstroms redefined the customer buying experience by providing rich inventories, incredible customer service, personal shoppers, and a pianist. I was a loyal fan. Recent experiences have been vastly different. From where we live, between traveling and parking, shopping at Nordstroms is a two-hour investment. A few months ago, I drove into town to find the perfect suit. They had it, but in only two sizes. The salesperson offered to get it from another store. I went home, found the same suit on Gilt in my size for $300 less. A few days later, it was delivered to our front door.
Why leave the beach? And, if I am a creative and adaptive worker, why would I stay?
The business of retailing, like all categories, is facing wildly convulsive change. Quite a bit of ink has been spilled on the specter of Amazon taking over the world. And, while the press spends time looking at the dark ramifications of the company’s growth, little is said of why this is actually happening. When it comes to buying value, the only distinction in why people would go into a store rather than spending a few minutes on the computer is in delivering a compelling customer experience. And yet, CEOs rooted from the past cut investments with talent and inventory, which only buys the shareholders a little more time to get out.
The most recent example is the Nordstrom family itself, which recently tried to take the company private, as an attempt to turn around its decline. Now, they have left.
This great disruption will continue. In an over-prescribed America, I’ve often said that my drug pusher is on a corner in Santa Monica. His name is Walgreens. Many people don’t know that Walgreens grew from a little pharmacy in Cleveland to a national category leader by selling medicinal alcohol during prohibition. Health and well-being is not a part of this organization’s initial DNA. But, I stayed with them for 25 years dealing with long-lines and stressed-out employees. The last straw when we a temporary and very busy pharmacy manager lied about having access to prescription information so I could make an informed purchase decision. I walked out and wrote a letter. Later, a regional manager called and confirmed the mistruth. She offered a $25 gift card as compensaion for the 3-hours it took to solve the problem. I told her, “I do not hold you responsible for what happened. I hold your CEO Stefano Pessina for creating a culture where the customers and the employees take back seats to shareholder value.” The silence was deafening.
My business is with a small pharmacy two blocks from my home. They call me by name when I walk in the door, they express gratitude for my business, and they provide any information that will help me with a buying or health decision.
Dan Banes is the CEO of Trader Joe’s where the average tenure of cashiers is nineteen years. At Trader Joe’s “team” isn’t an aimless marketing phrase. It is democratic truth. For example, if a General Manager is the first one in the door, she or he will be found in the bathrooms scrubbing the floors and toilets as well as taking out the trash. On a recent visit, I misplaced my sunglasses. They called me on the way home and told me the glasses were in the safe and I could come back at any time to pick them up. He responded that it is, “Our pleasure to make your life a little better,” Thing is, I know he was telling the truth. World-class customer service cannot take place in a vacuum.
We have reached a point in the evolution of business where the employer brand has become more important than the consumer brand. When an industry or category shrinks the creative and adaptive workers are the first to leave. Unfortunately, these are also the very workers that lead an organization into the future. All too often, the premium customers go with them. So, no matter what we proclaim is our consumer brand, the employer brand becomes the truth. And, no amount of “truthiness” will change the to come.
Let us be clear. The tragedy in retail isn’t Amazon, it is the failure in leadership of organizations who cynically believe that customers will tolerate abuse in order to get a deal. CEOs of believe that fear of losing one’s job will retain premium talent is not only mistruth, it is delusional. The ability of an organization to attract and retain premium talent has become the single biggest indicator of whether or not we ought to patronize that company, it is also the answer in why we would want to work for them.
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