We love this article from Nathan Frampton, President of Fanimation, so much that we are posting an excerpt of it here for you to enjoy!
RETAILER SURVIVAL by Nathan Frampton of FANIMATION
There are three game changers that have made life extremely difficult for traditional brick and mortar retailers.
- The recent economic crisis
- Technology and communication evolving faster than ever
- The Internet and millennial customer shopping behavior
As a business owner it’s hard to deal with one major game changer at a time, let alone three. I have traveled a fair amount over the last several years and have visited hundreds of retailers. Because of my travels and conversations with several retail business owners, I have had the advantage and education of observing what is and is not working as the traditional brick and mortar retailer deals with these three major challenges.
The most important trait I have seen in those that are successfully navigating the new business world is an unemotional acceptance that the above three challenges are reality. Number one isn’t going to change anytime soon, number two and three will only continue to change. It is absolutely critical that a business owner identifies and becomes comfortable with reality. It may sound elementary, but it’s clearly a mental hurdle for small business owners. Just think about how many retail businesses have folded in the last five years.
Retailers who understand that the economy is years away from returning to the “glory days” have reduced staff while expanding advertising and technology budgets. Their competitors, on the other hand, are holding on to the “glory days” staff, waiting for the economy to return to historical peaks and reducing ad and tech expenditures. Who do you think is gaining market share?
Technological advances are coming faster than ever. A year ago nobody had an iPad. In 2011, Apple estimates they will sell upwards of 50 million units. Ten years ago, and even more recently, small business owners had to invest hundreds of dollars for productivity software (word processing, spreadsheet management, presentation creation). Today, Google offers free basic productivity software including cloud based storage space. In the retail world, it’s fatal not to be up to speed on the latest and greatest technology.
Consumers, especially millennials (those born in the late 70s and later), have never been more educated and savvy shoppers. It’s not uncommon for a millienial to know more about the product they are interested in than the salesperson they are purchasing it from; a scary and backwards situation. The new consumer is armed with smart phones that can price check an item in seconds.
Many retailers are afraid of the millennial and/or savvy shopper that enters their store while not recognizing and considering the fact there is someone in their store for a reason. Humans will always want to touch and feel products before they purchase. Humans have and always will want personal contact. Although the savvy shopper could easily make the same purchase online, she has decided to come into the store because she desires personal contact with the product she is purchasing and the person from whom she is buying.
The question becomes, how does the retailer convert the savvy shopper into a customer and not loose him or her to the internet? Consider the following story. A consumer walks into a store and browses for product. They come across the perfect product. They touch, feel and like it. To the shop owner’s horror, the consumer writes product notes on her iPhone and even takes a picture. This person will, for sure, shop online. What’s a retailer to do?
The retailer should attack this situation from 4 different angles.
- Only carry models of brands in their store that cannot be purchased online for significantly lower prices
- Employ knowledgeable sales people, not order takers
- Carry a decent inventory of the products sold/displayed
- Address the millenial shopper directly and confidently
Businesses need to generate profit. It’s counter productive to carry products in a store when the same products can be purchased significantly cheaper online. A retailer does want to carry brands that are sold online because many times, the savvy shopper has looked online before entering your store. Brands that are sold online have credibility and drive traffic into retail businesses. The savvy shopper may question a brand that cannot be purchased online.
It’s imperative that a retailer employs knowledgeable sales people. Used car salesmen have given the salesperson a bad rap. The salesperson of today and the future knows their product inside and out and will do whatever it takes to help educate the consumer. The short-term goal when the next customer walks through the doors is to solve her problem and give her an education. Half the reason a consumer enters a store is to get more information about products.
Good sales people approach the consumer by asking such questions as “what brought you into my store today?” or “can I show you this cool new product?” Good sales people don’t ask the dreaded retail question, “how can I help you?” The key is to generate conversation and get as much information from the consumer as possible. The last thing a good salesperson does is ask a question that could end the conversation.
Inventory. Don’t buy too much, don’t buy too little. In today’s economy, some retailers choose to cut inventory to the bone, or even zero – the kiss of death. If the consumer is in a store, she has been educated and is now interested in a product. There is nothing better to say than, “I have the product for you right now.” The customer not only gets free shipping, but instant gratification. This is the brick and mortar retailers clear advantage over the internet, the ability to provide a product that the customer takes home, that day, no shipping required.
Finally, the only way to drastically reduce the chances of losing a sale is to directly address the consumer that is believed to leave the store and shop online. For example, a statement that goes a long way is, “I can tell you are an educated consumer, and that you are likely to shop for this online.” Assuming that rule #1 is being followed (retailer is not selling product that can be bought for significantly less online), offer to take the customer to a computer or iPad and help her shop for the item she wants to purchase. Nine times out of ten, the customer prefers to take the item immediately and feels more comfortable knowing that she has a real person to talk with in the future, should there be any problems with the product.
This is all only a piece of the puzzle, and assumes that a retailer has customers walking into its stores. The rules for getting customers into a retail business is another post for another day.
A reply that Lytestyles particularly liked:
I agree with the bulk of your article, but I want to speak to the question of good salespeople. First, in my previous life, I have had the pleasure of training and managing thousands of sales people in a fast paced retail setting.Then I got involved in the lighting industry and discovered the need for a sales person that had to be technically savvy as well as posses superior sales skills.
While vendors can share their “PK” of what they sell, they fail at sharing the details on how to sell it. Mainly, I feel this is because they themselves don’t know how the sales process works.
Sales training, (the real in your face inter-personal skills) and sales management, especially in this economic climate should rank as high as an increased advertising budget, yet the average retailer has tabled training and personal development along with other critical activities that should be in the forefront.
Another challenge to a sales team are their limits in the use of technology and that limits the customers B&M experience. In order to assist a customer fully in the digital age, we must make it easier for a customer to shop with us rather than to search the web for our product. This can be done by forwarding the customers selections to their email address and having it there before they reach home. And, if they have a smartphone, they may get it before they leave your parking lot. This is a great time to offer an incentive, if that is part of your sales strategy. Now that’s service that is immediate and that’s what the 21st century consumer wants.
A quick Google search let’s you know what the price the consumer is familiar with. UMRP, IMAP and other pricing policies help B&M maintain margin and an educated sales staff knows how to build on that initial sale. Many sales people will offer bulbs, but how many will offer spares? “Did you want 2 or 3 extra bulbs?”
Sending thank you notes is a lost art that needs to be resurrected. A quick hand written note is nice for the boomers and even X’ers but the millennial’s appreciate a quick email or even a text if you have developed that relationship. And, it is all about creating that relationship.
In closing, sales is a methodical process that has a fundamental set of skills which must be constantly tweaked for the times and climate we find ourselves in. Sales people must always be evolving to best use the tools they have available and to offer the best solutions for their customers.
Crafted on my IPad.
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