Who Am I? The RadioShack story

This week, I needed a "doo-dad" so I went to the official headquarters of doo-dads - RadioShack. (Or The Shack as they now like to be called.) Now, my first retail job in 1983 was in a RadioShack store. I spent 10 years with the corp and owe them a lot for my retail education.

What strikes me is the new commercial campaign going on for RS. The have started an all out blitz trying to get people to refer to them as The Shack versus RadioShack. Its actually a pretty clever idea. They are trying to make their name mainstream, viral and cool.

To dat, this is probably there 854th attempt at trying to make their brand cool. But here is the problem - Who the heck is RS? I mean it is the most confusing brand I have ever seen. The merchandise is sporadic and confusing - no flow and no connection. Its a s if they are trying to be the Restoration Hardware of consumer electronics (which actually is a cool idea - but I seriously doubt that this is what they are doing.)

The shelves look empty. The merchandise is dull. The employees are frumpy. And there are 4 different store designs. I know this because after visiting the 1st store I got curious and went to 7 others. Its an occupational hazard of someone with 26 years of retail experience.

Ah, but there is the word - experience. There is none at RS. They are making the same mistake that thousands of businesses do every day. They are spending tons of cash on marketing to get people in the door promising hip and cool and when people arrive; the experience disappoints (a lot!)

Sales will spike up with the new ads (as they always do.) But the experience people will have in the stores is so miserable, that the sales spike will drop right back down. Aren't you tired of stores promising such great excitement only to be let down. We might as well all be Cubs fans.

It's a cultural thing. (You knew I would get there.) The company is still operating in silos. The marketing does not match the store design - the merchandise does not match the marketing - the people do not match anything.

RadioShack will continue to wander the retail landscape trying desperately not to be the latest entry in the retail graveyard until they decide to put in leadership who understand the power of culture and what it can do for you. No marketing campaign will ever fix you. Its like going on extreme makeover and coming out beautiful, but still being a raging idiot.

Now I am not saying RS execs are idiots; they are very bright people. But bright people act in accordance to what they know. If you do a Bing search, you will get billions of hits on business and marketing and human resources, but sadly, much fewer on corporate culture.

But then that is why we blog...

Showrooming

How can retailers protect themselves from “showrooming?”

This is the question of the day – or at least it should be. Showrooming is the practice of Customers bringing their mobile device into your store, scanning the UPCs or model number info on your merchandise and then looking online for the best price. In other words, your store becomes a “showroom” for the website without a physical space where Customers can try before they buy and feel it before they deal it. There are several apps for this – most free – which turn any mobile device with a camera into a scanner and a modern day “price checker.”  

I know what you are thinking. Isn’t it enough that your competition has huge national ad buys and you have to see them on TV and drive by their billboards? Now the Customer is bringing your competition into the store with them on their mobile device! (By the way, we use the term mobile device because if you think it’s just about smartphones, then you are not paying attention to the tablet trend.)

I have heard about retailers planning to put in machines or devices to break up the ability to showroom, but this will also break up the ability to text your wife or husband to find out where they are in the store. So, not a real solution and certainly not Customer friendly.

Let’s face it. Shopping with our mobile devices is not a fad and it is not going away.  Research firm Gartner predicts that worldwide mobile payment transactions will surpass $171.5 billion this year, up from $106 billion last year. Apps like Square or Google Wallet are even encouraging people to use their mobile device for shopping. And with iOS launching Passbook and Microsoft Windows 8 having a “wallet” built in this Fall, it will give retailers the ability to store gift cards, make payments and more on the Customer’s mobile device. And don’t get me started on Near-field technology! The bottom line – we are feeding this trend, whether we realize it or not.

The best defense we have against “showrooming,” is our people. And here is where many retailers are going to get burned by this trend. In the last few years, we have seen a decline in the importance of professional sales assistance and an increase in self-service and sales “clerks” who can take your money, but not answer your questions. So, what is a Customer left to do? They need answers, don’t’ they? They turn to their mobile device. Simply put, stores who deemphasize professional sales assistance are pushing the Customer in this direction.

The truth is that “showrooming” gets its fuel from self-service or low service environments. If you are greeted by someone when you enter a store, are asked thought-provoking, open-ended questions about your wants, interests, needs, concerns and desires and then given a demonstration or allowed to try on or use the merchandise then your “need” to showroom diminishes. This is not to say that people do not care about price. But it has been proven time and time again, that price is not the main driver in a buying decision. It’s not if we give the Customer a reason to make it not, that is.

Invest in your people. Your professional sales team’s ability to deliver remarkable service and “tether” the Customer to your business is the key to defeating “showrooming.” It’s hard to showroom, when you have a professional salesperson with you – it’s awkward and it just feels wrong. Now, read this carefully, I did not say have someone stand with them and watch them. I said have a sales professional work a structured sales process (like the G.R.E.A.T. system from the Retail Sales Bible) with the Customer.

Remember this, Customers are NOT “showrooming” simply because they want a better price, they are doing it because in their minds, this is the answer to lack of service in your store.

Another way to combat this behavior is to create “wow” moments in the store when it comes to pricing. If you think about it, your merchandising is the other “salesman” in your store. A great source for this is “closeouts” from your vendors. Find items that you can buy at really low prices and then lace them throughout your mix as special buys. A customer who comes across these items with big price discounts on items that they probably cannot find on their mobile device, will see value in your store. The key is to blend these into your mix and not let these “deals” overpower your brand. You are a full price retailer not an outlet and the more of these deals you have the closer to the outlet “line” you are placing yourself.

When we had our shoe stores, we took this idea one step further. The “wow” deals were only available to our loyal customers. In other words, if you were a member of our loyalty club, you got the special price, if not you paid regular price. Of course, our club was free and anyone could join, but the perception that it gave was that you must be part of the store’s club – again, cannot “showroom” these items because they are deals for members and not your regular price. And they are deals you could only get in our stores. We sold online as well, but you could not get your club deals online.

Lastly, use your vendor as your partner and ally against showrooming. Work with them to give you merchandise that is not available online. It is in both of your interests. Sell the fact to your Customers that you hand pick the merchandise for them. That online, they will see thousands upon thousands of choices and more noise and confusion than it is worth. You have taken all that away with your store and done the editing for them. In many cases, shopping online can take longer.

Showrooming is real and it is trending. But it can be defeated. 1. Have solid, well-trained sales professionals. 2. Build in “wow” moments that show there is no need to go online. 3. Work with your vendors to gain exclusives that cannot be competed with online. 4. Deliver remarkable service every time. Even if you are not the cheapest price, people will still pay for service. And their “need” for “showrooming” goes away.

Knock-off Branding

Let me say at the outset, that I am a fan of the underdog. Microsoft is the underdog in the consumer world. I first wrote about them when I visited their very first store in AZ. That post and its observations was one of the highest read posts in this blog. It just goes to show you that Microsoft is still a big and powerful brand name. 

Last week, I was in Austin and go the chance to be at the grand opening of the Microsoft store in the Domain. At first glance, there was a line of people waiting to get inside - good sign. This means there is some excitement about the store. At second glance, I realized that the vast majority of people in the line had Dell employee badges hanging from their belts. (so in case you had some delays calling in that day, they were all at the Microsoft retail store) 

As you stroll through the store you can see some of the "upgrades" from the original. And I would say that the store is looking much more appealing. However, look at the picture of the outside of the store

Seem familiar? Glass, sleek, one-color front with an emblem versus a name. Tables inside with light colored woods. Getting the picture? There is a store in Dallas, TX that sells purses. They look like Gucci, Prada, Coach, etc, but they are not. When you go to the counter to pay, they will get a brand name plate out from under the router and stick it onto the bag and wallah - you now have a Kate Spade purse for $20. 

I cannot shake the feeling of the Microsoft store as being exactly the same as the handbag. Why would they put so much effort into being a "knock-off" of Apple versus being their own brand with their own identity with their own personality? Do they honestly believe people will wonder into their store thinking its Apple? 

The problem is that instead of this store looking like a beaming representation of the brand, it looks like an imitation of something they would like to be. Again, I want Microsoft to succeed. But, they just seem to place more value in being Apple than they do in being themselves. And what are we customers left to think about them? you can get stuff that looks like Apple, but not quite as real? I know that cannot be what they were thinking. 

Remember, Everything Speaks. And this store design is screaming - we wish we were Apple. 

And the irony is that as soon as the Microsoft retail store opened, the Apple store - a few doors down the row - closed for remodeling. Wonder what they have in store?