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Observations on Retail in the United States today

22 Sep

Last night and today my wife and I ran around getting errands done… shopping.  As a result, I’ve got a few observations:

  • Retail staff are obviously getting spoken to about customer relationships.
    – At Kohls last night, I had possibly the best cashier I’ve ever been served by.  At the end of the his service, he pleaded with us to complete a survey on his service to us.
    – At the Sears hardware store multiple floor personnel greeted me and offered me help.
  • The SKUs that stores carry is still abysmal.

My assessment is this:

  • At least in my case, I’m so used to store personnel that in the past just didn’t give a damn, I really don’t know how to react to these newly caring personnel.  I’ve learn to become so self-sufficient when I’m shopping, that I feel like these folks are intruding on my shopping experience.  Strange, eh?
  • Retailers next threat is a new threat from Amazon.  In the New York Times article “Amazon, Forced to Collect a Tax, Is Adding Roots,” (http://www.nytimes.com/2012/09/12/technology/amazon-forced-to-collect-sales-tax-aims-to-keep-its-competitive-edge.html?smid=pl-share), David Streitfeld reports “Amazon will soon be able to cut as much as a day off its two-day shipping times, said Jeff Bezos, its chief executive, in an interview. This will put the much-rumored same-day delivery — the elusive aspiration of every online merchant — potentially within reach in some metropolitan areas.”  Amazon has an almost endless lists of SKUs… almost everything I could want for less than retailers have fewer SKUs I really don’t want so much.
  • Helpful personnel are only great if you’ve stock something you can sell your customer.

It only stands to reason that the following use case would be more optimal than Amazon’s next day shipping:

  • I go online, say to http://www.BestBuy.com, find what I want, but see that it isn’t available in my local store.
  • I place an order for NEXT DAY DELIVERY (or if early enough in the day, SAME DAY DELIVERY) to be delivered to my local store.
  • When item is delivered to my local store from a district distribution center, I am notified and go and pick it up.

Lots of retailers provide delivery to local stores now, but to the best of my knowledge, none of them do it in one day.  There are lots of advantages of this to the retailer and me:

  • The retailer better competes with Amazon.
  • The retailer has an extended set of SKUs available at a short time.
  • Since I’m coming into the store to pick up the item, the retailer has an opportunity to cross-sell me something.
  • And for me, I don’t have to be home to accept the delivery: my item is securely delivered to my local retailer.

This means that retailers are going to need to tune up their distribution centers and online systems, because without that, their local presences, with limited set of SKUs, will matter less and less in the face of Amazon’s next day “retail lite” model.

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2 responses to “Observations on Retail in the United States today

  1. arjkay

    September 23, 2012 at 2:04 pm

    Tom
    your observations bring to mind the supply chain in autoparts. Dropping a car off for repair or service frequently requires the shop to call the distributor for the part or color needed. The entire autoparts network was built with the expectation of same day or expedited delivery, and priced it that way too. Assuming the distributor could get their hands on the part, either from its warehouse or calling around to its network, I might get my car back in one day. These inventory systems are now available in many ways to consumers on the internet, but require experience or expertise to get the right part.

    I learned this when I had a broken side mirror and thought I could merely order the part and install it myself. I couldn’t figure out the part number, and stopped in to an autoparts chain store. They had to order the part and so i took the number and did it myself online. Well I got my mirror but it wasn’t affixed to the part that snapped into the housing. hat was the price difference that the autoshop clerk couldn’t figure out either, so I didn’t save myself time or money.

    In other words, the dealers and service people expertise still delivers while the changes you noticed retailers in all their moves toward customers service overlook. The dealers save me time and trouble, leverage their expertise and experience with existing systems to deliver final results and satisfaction.

    Courtesy and polite conversation may be the first step but retailers are going to have to deliver a lot more. They have yet to figure out how to make buyers like you and me value the difference between online and in store purchasing of competitively priced commodities and keep me coming to the store.
    All other things equal would you be willing to wait until FEDEX delivered IT next day to your door for a lower price or take the time to locate a local store, park and wait for service to pick it up? if the clerk offered me something more than the delivered item, or reminded me like Radio shack does, that maybe I should get some batteries or something else that enhances the value of my purchased item, game me an experience worth returning for, then I might give up on the Amazon search.

     
  2. Tom Foth

    September 23, 2012 at 2:39 pm

    Rachel,

    I can’t agree with you more. Right now, I suspect a high percentage of customers coming in to buy a major ticket item at an electronics dealer know as much or more than the associate there to “help them out” because the internet levels knowledge. On top of this for a broad swath of goods, since there are few major differences between devices brand-to-brand (because of private-labeling, manufacturing pooling, etc), an associate needs to know the category EXTREMELY deeply to be of help.

    One such example is audio systems. There was a day when specs really mattered… and you good hear the difference in the specs in the quality of the audio. Today, audio systems are generally so well developed that only the truest audiophiles can hear the difference (and in some of those cases, it isn’t even clear they are hearing the differences).

    There was a time when you went to Radio Shack and the associate was often a licensed amateur radio operator. They knew electronics down to the component level. These people could add value. I know that there are still a few cases where this is true… but not so much anymore.

    I look forward to retailers competing with next day delivery from Amazon (and ultimately, perhaps other online retailers). My only concern is that they will not figure this out until they are too late.

    Right now a battle in the war is the decision of some retailers not to carry the Kindle. This is reactionary and doesn’t really address the problem. While I can see the desire not to “help the enemy” the real desire should be to distinguish themselves in comparison with the enemy.

    Side note: I had to buy an turn signal assembly for one of the cars. http://www.partsgeek.com promised two day delivery and got it to me in one. That was an incredible experience. I have seen the future of online versus bricks and mortar and I am starting to like the online, a lot.

    Retailers: don’t let us down… let’s get on this and find ways for the retail experience to add value to buying goods.

     

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