Friday, December 16, 2005

Failure of Media Play Lesson #1

It was recently announced that Musicland group is closing all 61 Media Play locations across the country. For those of you who are not familiar with Media Play, they are a large big box store focusing on Music, Books, Movies and Software.

I first encountered Media Play when I moved to a new city in 1997. Where I lived before we had Hastings which was similar to Media Play so I started going into Media Play. Until a few years ago they had a large magazine selection, music selection, and book area. In the last five years they have added more software, added games, and made the other departments smaller.

A few weeks ago I went into Media Play and was not impressed by what I saw. The store had several failings and you could clearly see why the store was faltering and why ultimately they are being closed.

While many of its failings ultimately come from not finding its niche, I will also discuss other reasons for its demise that lead up to the lack of a niche and how you can avoid the problems.

Lesson #1 on Media Play's failing was that it tried to be all things to all people. When I first went in there they had a fantastic selection of books and magazines. But, as the market changed their answer was to add items and cut down on their other departments and instead of having some very good departments with good selection, they had many departments with small selections. The last time I went into Media Play a couple of weeks ago I found nothing I was looking for so I went elsewhere.

So lesson number 1: Do not try to be all things to all people.

Friday, December 02, 2005

Small Booksellers Missing the Boat?

In my local newspaper this past week there was another article about a book store that is closing its doors. Like many small retailers there has been hard times for small book sellers with the onslaught of Borders, Barnes and Noble, Wal-Mart, Amazon and others.

You would think that writers would be concerned about the small stores going out of business because the market is being taken over by discounter who sell books for less. However, what I hear most from these writers is that the small book stores have done little for writers so there is a lack of caring.

What do the writers mean when they say small book sellers have done little for them? In most cases when writers are first getting started, they have a difficult time getting the word out about their books. The small book sellers have done little to promote these up and coming authors. Some of these small operations only focus on the bigger writers and some see working with writers as just too difficult.

Meanwhile the writers tell me that companies such as Amazon have done to promote them and get publicity for them than any of the small booksellers.

So in other words the small booksellers are missing the boat. I know of several small independent booksellers that are doing great business and having no trouble competing against the big boys. How are they doing it? They are working with these new and local writers promoting them, having book signing, and readings. While it may take more effort to promote these new authors, the payoffs can be huge as they will be loyal to that bookseller and help them out. In addition it gives great publicity for the book seller to show that they are working with local and new authors trying to get their careers off the ground.

Small booksellers need to work harder getting people in the doors and promoting new talent is the perfect way to get the walk in traffic. A person may come in to hear a writer talk or read but then some other title catches their eye on the way through the store and there is another sale.

Yes, its takes effort but in today's business world you must work smarter to stay in business. Build relationships that will benefit both parties. After all, that new author you help out may be the Rowling and will tell the world where they got their help starting out.

Monday, November 28, 2005

Be Seamless

Have you ever purchased a product online and tried to return the product in one of the brick and mortar stores? For many customers this can be a very frustrating thing which leads to negative feelings about the company.

The trouble with many companies is that they have not integrated their websites and stores into one system that allows seamless returns. One of the major office supply stores still uses a DOS based system for their internet/phone/special order sales which is totally incompatible with their in-store registers. So when a customer wishes to do a return, it becomes a long draw out process that not only taxes the patience of the customer but the employees as well.

An integrated system is needed that allows the employees to do a return from an internet sale as easily as they could do any other return.

Also, your website should carry more items that you do not carry in the store. An employee should be able to place an order for the customer in an easy fashion that not takes up tons of valuable time.

Here are some suggestions to improve your service:

1. Have an integrated system that makes orders easy to place in store for items that are not carried in the store.

2. Insure that the returns are seamless whether the customer purchased the items in the store, through a special order, or on the internet.

3. Insure that all employees are trained to use the all the system's functions.

4. Do not make the customers and employees feel that you are two separate companies competing against each other. Customer should feel comfortable doing business in the store or on the website including sales and returns. Policies should be in place to make it seamless for the customer. Employees should not have worry about how the products where purchased, only that they can quickly and easy take care of the customer.

In today's competitive marketplace, you have to make using your systems easy for the customers or the employees. Once the customer feels that your services are too difficult to use, they will find some else who will do things better and make things simple.

Monday, November 14, 2005

A Story of Two Stores

In today's marketplace you either have to adapt or you will not survive. Here is the story of two appliance stores from Spokane, Washington and how they reacted when big box electronic stores first moved into the city in 1996-1997.

Store Number One:

Both stores are located in the northwest area of Spokane. When Future Shop (a store similar to Best Buy but with commissioned salespeople) first opened thier two stores, the owner of store 1 was quoted in the paper as saying they didn't need to do anything different, that they where a great store and would survive.
None of the big box stores located in the same area as either of these retailers where located. However this retailers store was small and dingy. It actually reminded you of a used appliance store instead of a store selling all new appliances.
But like they said in the article they did nothing to adapt to the change with the arrival of the big box stores.

Store Number Two:

Contrast store number one with store number two. Store number two is located not too far south of store number 1.
When the big box stores arrived they saw that they could no longer do business the same way they had been doing business for many years.
What this store did was look at how the big box stores did business and did everything better than the big boxes. They had better customer service, they had free delivery and set up, and they cleaned up there store to make it look better and more inviting than the big box stores.
They also saw that the big box stores did not have the higher end appliances that are actually more profitable than the lower end ones. Also they created areas where customers could try out appliances which most big box stores don't have the ability to do.

Three months after the first big boxes opened their doors, store number 1 was the first of the independent appliance stores to close. However, store number 2 continues on with business that is improving every year.

To compete in this market place you must:

1. Adapt to change.

2. Find out what your competitors do good and bad and make your store better than theirs.

3. Find out what products you can carry that your competitors do not and exploit a market.

4. Have a clean inviting store.

While doing this things do not guarantee success, doing nothing guarantees you will fail.

Monday, November 07, 2005

Be Consistent

One of the most upsetting events that customers encounter is inconsistent policies especially toward returns. If you are a chain and have multiple locations, this can be created by different managers having different policies. This can also be created in a single store if all managers and the supervisors are not on the same page.

Here are some suggestions to improve this situation:

1. If you are a chain make sure that all your stores follow the same policy. Put the policy in writing and make sure all the management follows the policy.

2. If you are a single store make sure all the people in the store that make return decisions are on the same page. Write down the policy and ensure that all employees are trained properly on the why, what where of the policies.

3. While you do want to protect yourself against fraudulent returns, make sure that your return policies are not so stringent that you are sending customers to your competitors.

4. Go to all of your competitors and find out what there return policy is. Go even further and buy products from the store and see of they follow their policies. See how they react to the returns and if they try "save the sale".

5. Make returns seamless whether the customers has purchased in your bricks and mortar store or purchased on line. Nothing is more frustrating for a customer than to buy something on line and not being able to return in the local store or worse, the store telling the customer there is nothing we can do or there a separate operation.

6. Many customers think that if they go "over the heads" of regular employees management will do what they want. Once again you must have a policy in place that not only allows the customer to fell as though they are being treated right, and gives the employee the knowledge that management is behind them. Once again the best way to make this happen is have a customer friendly return policy.

Once again, one of the biggest frustrations customers have with stores is inconsistent policies. Work as a team to build workable policies that will work for the company but also work for the customer.

Sunday, November 06, 2005

Welcome to Business Connect. This blog is run by the Dornoff Consulting Group. We have over 20 years experience in retail and customer service. This blog is designed to give helpful information for small businesses to run more effectively and compete against the Wal-Marts of the world. In addition we also specialize in Transit Oriented Development in helping find the right mix of businesses to locate in these developments and to help businesses and developers make their complexes a success.