Like many folks, I've spent a great deal of time in the malls looking for Christmas presents, although I haven't bought anything yet. But to be fair, that's not an economic thing. I always wait for the last minute to actually buy, but I do love to shop! I've seen a couple of things while I've been out and stores that were busy had two things going for them:
So, the first one is pretty easy. Lots of places had great sales over the last two weeks and we, as consumers, know that more sales are coming down the road. Just look at the prices of consumer electronics lately. They've been crazy! Today, Best Buy has a 32' Sharp LCD for $399. At Circuit City, you can get a Lenova IdeaPad for $399 too. Walmart is even really jumping into the electronics space pretty aggressively, with even rumors of a $99 iPhone coming at the holidays, although that doesn't seem to be true right now. Costco seemed packed when we were there over the weekend, with lots of people both looking & buying, proving that good values are still seen as good buys, even in this economy.
So, having a great sale certainly helped drive big traffic to retail stores. Conversely, stores without good sales seem to be pretty empty the days I've been to the malls. I have to admit, the Abercrombie stores, usually pretty bustling, looked empty the days I've been in the malls. But while those great deals might translate to good traffic and even good sales figures, what will be the long term effect of this price cutting? We don't know yet, but we can certainly look around to other industries living off of a non-stop cycle of sales to see how they're doing. Will anyone buy a car without 0% financing? And what happens when stores like Saks begin discounting luxury items? Are we training the next generation of luxury consumers to wait until the price is right before actually purchasing? At a birthday party over the weekend, a lot of the financial people I spoke with thought that when we see how bad the holiday retail really was and people start to lose their jobs, the economy will get even worse.
On the other end of the spectrum, having cool stuff always works. Every time I went to the Garden State Plaza, the Apple store there was packed. Not only were there a lot of shoppers there, but there were a lot of employees too. And it looked like people were really buying things, not just looking. Lots of folks buying iPhones for sure, saw a lot of them being activated. And Sydney and I were at Build-A-Bear (once to buy, once just to look) and they seemed pretty busy there too. Unfortunately, they were having staffing problems the day we were there to buy, and that made it a lesser experience then it usually is. Build-A-Bear has now added an online component, similar to Webkinz, and Sydney has really enjoyed that. In fact, last weekend she became a CyBear Guide last weekend, which is a very clever way to get kids to spend more time online.
It's possible that as Wall Street's influence gets reduced, maybe companies will be able to get out of the quarterly results game and into the more long term look at where they're heading. Maybe they'll read the stories about how Circuit City cut its best sales people to make the quarter, but seem to have really hurt themselves in the long run. If you read In Hard Times, Is Best Buy’s Best Good Enough? in the NY Times a few Sundays back, you might've read about some of the things they're trying.
With unemployment rising sharply, and consumer spending plummeting, Best Buy managers are bending over backward to attract shoppers and are encouraged to put their personal stamp on the stores. For Ms. Adoniz, that means stoking employees with caffeine and carbohydrates and catering to customers’ pets.
It's nice to see that a major retailer like Best Buy is starting to really understand the importance of its in-store staff for growing a profitable business. And, according to the Times:
For now, though, Best Buy has a potent weapon in its battle with the discounters and online sellers: its staff. Members of Best Buy’s sales staff, a k a “Blue Shirts,” go through a 20-hour training program, then spend two weeks shadowing an experienced sales staff member around the floor. Historically, the Best Buy training program has been so strong, some people in the industry say, that competitors often waited for Best Buy to let staff go after Christmas, and then snap them up.“The importance of the salesperson is directly related to the price of the product being sold,” says Chris Denove, vice president at J. D. Power & Associates, the consumer research firm. “If you’re talking about toothpaste or pencils, the salesperson is immaterial, but when you’re talking about high-end electronics such as flat screen TVs, the salesperson can be critical.”
So, maybe brands will be looking at the Best Buy model in the future and figure out how to use their sales staff to actually better enhance their guest experience. Hopefully they'll start to realize that their actual physical space can be used so much better then it is now. The malls were crowded and people were in the stores they liked!
It'll be very interesting to see who thrives, who survives and who dies this retail season.
MediaPost Publications - Bottom Falls Out Of The Ad Market, Literally - 12/12/2008.
B(AD) NEWS SPREADS ON MADISON AVE. - New York Post.
Retail sales fall for fifth straight month - Retail - msnbc.com.
The Associated Press: Retailer KB Toys files for bankruptcy protection.
I think that to get the home loans from banks you ought to have a great motivation. But, once I have got a collateral loan, because I wanted to buy a building.
Posted by: HALEYJohnnie | June 06, 2010 at 08:44 AM