Keeping up with the Joneses—the retail version
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March 10, 2017
|Question: There is a lot of competition out there these days. What’s a good way to stay on top of what’s new and successful?|
Answer: The movie The Godfather offered some solid advice: Keep your friends close, but keep your enemies closer. Mystery-shopping your competition is an exercise that needs to happen at least once a quarter, more often during holidays and other peak retail seasons. Here’s what to do:
Make a list of everything you need to know about each competitor. When we mystery-shop, we carefully examine the operational categories in the store and then rate each one on a scale of 1 to 10. It’s an opinion, but it’s a good one. Yours will be, too.
Begin by determining where you stand in your marketplace. Send someone you trust to a public place near your store to ask people if they can recommend a good hobby store. If your store is mentioned first, you have built “top of the mind awareness.” Good job! If you are not mentioned first, or worse, not at all, you have some work to do.
Ask a hobbyist friend to mystery-shop your store. Your perception of how you’re doing could be tremendously different from the customers’ perception. We did this exercise with a retailer who thought his store was the best. We took him to visit a new competitor’s store, and then came back to do the same exercise in his store. It was an eye opener; he realized how much work he had to do to bring his store up to speed.
Don’t do it all by yourself. If you are uncomfortable or think you might be recognized, send a store associate, friend or family member—even one of your loyal customers. But you must personally stop in occasionally just to say hello, and casually look around while you are there. Try our “How did it feel?” exercise: Have your associates visit the competition posing as typical customers. Have them go through all of the steps outlined in this column. When the associates return, ask them to document their visits, breaking down everything they experienced in each area of the store. After each comment ask, “How did it feel?” You’ll learn what that competitor did well and where they stumbled. Compare those findings with your store.
Note your first impression. Is the competitor’s store interesting from the minute you approach it? How are the store windows? Shoppers assess your window displays in eight seconds or less, so they can’t be too elaborate. And shoppers make value judgments about a store in just 10 seconds or less: What vibe does the store give? What happens just beyond the “de-compression zone,” the first 5 to 10 feet inside the door?
Analyze the customer flow. Does the sales-floor layout create and control how customer traffic flows through the store? A retail study found that 50 percent of shoppers never see the entire sales floor. Does this competitor easily move shoppers from department to department?
Rate the in-store experience. Is it a fun place to shop or merely a place to buy “stuff”? Do customers linger or get in and out? Stop in each important area of the sales floor and watch shoppers; try to see the merchandising and customer service through their eyes. Watch how shoppers enter the store, which way they go and why, what they look at, how long they linger in specific areas, and what they buy and return.
Rate the overall appearance of the sales floor. Does it motivate shoppers to buy? What do they do to highlight important product? Is the merchandise fresh or dated? Is the sales floor neat and clean? Are displays well maintained and dust-free? Are they unique? Is cash wrap organized and merchandised with impulse items? Is it clutter-free? Where are important basics and hot sellers located on the sales floor? Are displays merchandised as a destination product (think milk and eggs in a grocery store) or as impulse purchases? Are the displays clearly signed, and is the merchandise clearly and competitively priced? Don’t forget to visit the service areas and rest rooms, too.
How does the retailer differentiate between full price and markdown merchandise? Where and how is reduced and clearance product merchandised—in its regular department or in a special clearance area?
Does the store have a signing program? Is it effective? Does it reinforce the overall feeling of the store’s brand? Are signs well-placed and legible? Is there a standard format, or are they handwritten and taped to fixtures?
What’s the pricing perception compared to yours? Is the retailer trying to portray itself as 1) upscale, with a high level of service and experience or 2) a discount merchant with little apparent visual merchandising?
Are the associates attentive to shopper needs? Is there adequate coverage and people available to help with customer questions? Put the associates through their paces to find out if they possess specialized skills and strong product knowledge. Do they focus on customers or sales-floor maintenance?
Review the 1 to 10 grades you gave the competition in each of the above categories, then compare your store to each competitor to determine where and what you need to change Now, take a look at each associate’s “How did it feel?” exercise reports and merge your experience with what the associates experienced. What you saw and felt will likely be very different from your teams. That’s a good thing.
Then create a “hit list.” You have now established a list of things you need to change and improve. Make these changes accordingly, checking them off the list as you go.
Commit to shopping your competition, and regardless of what you find, vow to try it, fix it, change it, do it. Be the go-to hobby store in your community and beyond!