Doron Levy’s Daily Retail Blog

My Entertaining Expert idea was recently featured in Refrigerated Frozen Foods Retailer and I have gotten some great feedback about the idea. A few points I would like to add:

Training of the EE is really important. Increase product knowledge in categories you are featuring.

Their sole priority is to engage the customer. Give them a Marcel Marceau style glass box that they can jump around in. You can even tape off areas on the floor where you want your EE situated. Make sure they understand the importance of engaging all the customers in that ‘glass box’.

Ensure they have some high margin, high velocity, related item in their hands at all time. Bottled sauces are a great item to carry around. When engaging the customer, the EE should make sure the product gets into customer’s hands in some way.

During busier traffic times, the EE should have a backup person they can call in case a line up builds.
Some of my clients are having a lot of fun with this concept and it’s a great way to get your associates more involved in basket building. If you have any questions in regards to the article or idea, please email me directly at doron.captus@rogers.com.

If you have been reading my posts, you probably have seen that I talk a lot about merchant mentality. I always start off an interview or client evaluation with the question: What is your definition of merchant mentality? I use it as my core concept when training new people. When doing an operations assessment, I use merchant mentality as a guiding force. I have heard differing answers to the question and here is my take on merchant mentality.

So what the heck is merchant mentality anyways? We should probably start by looking at the words themselves. According to dictionary.com, there are 3 noun definitions for merchant. We will take number two: a storekeeper; retailer: a local merchant who owns a store on Main Street. Mentality comes up as: the set of one’s mind; view; outlook. Let’s mush it all up and we have: the state of mind of a retailer. Merchant Mentality sounds sexier in my opinion. First lesson complete: it’s all in your head.

Now that we understand the meaning, let’s get to the steak (or pre-shaped soy patty for the non meat people). There are 2 modes of thinking for merchant mentality and these are in order of importance:

What will my customer think?

What is best for the business?

I don’t like stating the obvious but without customers, we would have no business in retail and the reason it is in first position. Being that merchant mentality is a state of mind, you must train yourself to think like your customer while working. When walking the sales floor, are you looking at areas and sections through the eyes of your customer? And this is not just about facing up and filling holes. Think about how customers look at the products on the shelf. You should always be asking yourself questions like: is there a better place for this? Would this make it easier for the customer? Is this the right display for this time? Will the customer know how much this is? This line of questioning will train your brain to think like your customer. I have seen beautiful displays and bunkers that made no retail sense. The state of mind should be on at all times.

After we make the customer happy, we need to tend to the needs of the business. Now in most cases, what is best for the customer, is best for your business. But it is important to have the back office in the back of your head. Ask yourself operational questions from time to time. Is there a better way to organize the stockroom? Should we hang price guns here for better access? Do we need more cashiers during the day? All operational questions should end up benefiting the customer which will show up in your bottom line.

If I where to paint a picture of merchant mentality, it would be of a shopkeeper sweeping the front sidewalk of his store. He knows that customers are more apt to enter a clean and organized store. It’s not necessarily the act of sweeping that defines merchant mentality. It is the thought process behind it. “I sweep because  the customer like to shop more in a clean store” should be the razor sharp thought going through your head.

A huge benefit to having merchant mentality is owners and managers do a lot of walking around and find themselves on the sales floor much more than their office. Merchant mentality is also contagious. We all try to aspire to our leaders whether consciously or subconsciously. As a merchant, we can use that behavior to our advantage build a culture of merchant mentality within our store(s).

Here is the Captus pocket definition: Merchant mentality is a state of mind where the owner or manager looks upon the day to day operations of their location with priority to making sales and profit.

Owning your own business is probably the only job that can give you highs and lows on a daily basis. I always ask a new client why they went into business for themselves and the answers have some commonality between them.

If you are thinking of opening up your own business, you should ask yourselves these questions:

1. What does merchant mentality mean to you? This is supposed to be a thought provoker. Sit down with pen and paper or keyboard and monitor and write out every thought that comes into your head when you think of merchant mentality. Some people come up with just a few lines, some come up with pages of thoughts. You should have a clear understanding as to what merchant mentality is before embarking on any retail project. There is no right answer (well there is) but this is to get yourself thinking about merchant mentality and how important it is in your day to day operations. Read your answers out loud. Do you believe what you are saying? (I’m always curious to see what people think of when it comes to ‘merchant mentality’ so if you do this exercise, feel free to email it to me!)

2. Do You Enjoy Being In Control? Face facts. When you are running your own show, you will have to be control. And you will have to be in complete control. Any aspect of your business that gets away from you WILL come back to haunt you. Notice how the term ‘control freak’ is absent. Being in control is different than being a control freak or controlling. You should also answer the question: What does it mean to be in control?

3. Do You Enjoy Working With People? Yes, in retail, you will have to deal with people from time to time. The 2 important groups of people you will interact with are: your customers and your own people.  You will need to deal with these groups on a daily basis and you better have a game plan for that. If you have been in a cubicle all your life and your only human interaction is with the guy who services the coffee machine, you will need to assess your ability to handle customers and workers. If you hate people, owning your own business that needs customers is probably not for you. On the other hand, if you have the uncanny ability to charm your way out of anything, owning your own retail is the only job for you.

4. Do You Believe In Your Product or Service? This is a real biggie. Most successful retail operations were born out of a love of something. Sam Walton loved a good deal. The Comic Book Guy loves comic books. When you believe in what you are selling, it is much easier to sell. It also comes across as more sincere with your customers. This is something that can be learned especially if you need to hire people. Your love of whatever it is your selling must spread to your team.

5. Do You Enjoy Routines? This one was a surprise to me. I was always taught that the only constant in retail is change. So now I’m saying you have to enjoy routines. This is important for the day to day operations of your business. Do you have a problem with opening and closing checklists? Do you have a problem logging abnormalities in your business? Will it be an issue meeting with your staff several times a week? While every day is an adventure in retail, it is important to have basic routines in place to maintain image and structure in your store.

These are some core questions to ask yourself when it comes to retail. If you already have a store, you should still ask yourself these questions. I found that many of my clients were able to come up with great ideas when working on these. These are great questions for the interview process as well. There is nothing better than having a clone of yourself representing your brand on the sales floor.

Sam’s Club may be long gone from Canada and Costco may be enjoying a monopoly on warehouse club style

They mean it

purchasing, but there is a competitor springing up that is gunning for them. Costco should take notice of this.

We in Canada are used to monopolies and lack of competition. Companies like Air Canada and Bell Canada have been providing mediocre products and services to Canadians for years. Sam’s Club departure from Canada effectively left Costco in control of the market place. Businesses and individuals who rely on club purchases are at the mercy of Costco. As a side note, they have been relatively responsible with price increases but some core competitive items in perishables that were in Sam’s market have seen some significant upward movement.

Aside from what other people tell you, Costco serves 2 customer groups: Business and Individuals. Ok, so Sam’s is gone and for business use, Costco is pretty much the only game in town right now. For individuals though, one grocer has kicked it up a notch and has Costco in it’s sights. The Real Canadian Superstore, a

Who do you think that's meant for?

discount offshoot of Loblaws is using instore POP and strong merchandising to push their own line of club packs.

I am a big beleiver in private label and no one else has done a better job than Loblaws when it comes to tiers and positioning. Increasing skus on club packs makes sense when customer are searching for value. This is a great move for RCSS and could possilby give Costco a run for their money. Even their signs are hitting their target with pinpoint accuracy.

While business members are pretty much stuck with Costco (and it’s not a bad thing, Costco is an excellent merchant), individuals and families have options when it comes to club sizes. Having the private label as your club packsis an excellent direction that will ensure bigger margins at the register.

This is a repost from RetailTouchPoints Retail Viewpoints column. Here are some great ideas to get you motivated in this difficult enviorment. Enjoy:

Life in retail is tough these days. Shrinking resources are putting huge strains on our human assets. Managers have fewer hours and less people to work with. True merchants know that customer service is what will drive the bottom line. Retailers cannot afford to lose productivity or customers in this environment. How can we continually motivate our people to perform at their very best in this negative economic and social environment?

In the retail industry, there is no denying that our people are our most important asset. Coincidentally, our people are humans, and humans have a need for self worth. It doesn’t matter who what or where, self worth is a basic human need. Showing appreciation and validation to your employees on an individual basis can go a long way to creating an upbeat and positive environment. Here are four no-cost actions management can take to keep spirits high and sales humming:

1. Create an environment of open communication. The quickest way to destroy morale is when people don’t know what’s going on. The rumor and speculation mill go into afterburner mode and things can get out of hand very fast. Share and share alike!

2. Promote ownership within the store. Give out special projects that frontline associates wouldn’t normally undertake. A great example is to assign endcaps and displays to associates and then have them track sales and turns. Finishing the display doesn’t end the job; they ‘own’ the section until it’s sold.

3. Continue improving your people. Killing training programs and workshops will ultimately create a stale and zombie-like team.

4. Do personnel tours daily. Even if you can’t hit everyone, walk around to say hello and find out what’s going on in their world.

These are simple, no-cost actions that the management team can implement immediately. Another key aspect within the store is the manager’s presence. Nobody wants to work for someone in an ivory tower. Leadership in retail begins and ends on the selling floor. When your team knows that they can count on you, the less they will rely on you and you will begin to see independence and creativity.

Imagine an independent, self sufficient team that takes ownership in the store they work in. Imagine a team that actually wants to come to work and give their very best every day. Imagine actually looking forward to getting your P&L’s at the end of the month.

There is an interesting article complete with stats on the decline of direct mail here. This is another affirmation that paper media outlets for retail marketing are in peril.

I cannot stress enough how important it is to have alternative marketing campaigns if you are a small business. See my previous posts about the Internet and retail here.

So what are you going to do about this? If you rely on a weekly flyer drop, my advice is to start harvesting emails at the store level. Creating a small contest or some other freebie will get people signed up.

Optimize your web presence. Are you selling or just providing information? If you are doing both, do them both well. Make sure that the customer service you provide in the store is executed online as well.

Get your internet mojo running and offer free resources about your industry on the web. If you sell food, offer entertaining tips. If you sell shoes, talk about the latest fashion trends. See where I’m going with this?

Keep the lines of communication open. Make sure you can send your customer something right away. Have a newsletter or some kind of a welcome promotion that can be deployed as soon as you have the customer’s email. Make sure you are communicating with that customer at least twice a month either by newsletter or email promotion.

Go mobile. Embrace mobile technology. Everyone thinks its cool to have coupons on your phone. Offer that to your customers and they will run with it.

The goal is to make your site the destination for whatever it is that you are selling. Combining advertising mediums will give you the one/two punch you need to get your message across. Don’t forget to use your actual location as a marketing vehicle. Smart merchants will plaster their website all over the place to get customers to remember the address. Make your staff aware of how important web presence is to ensure they are talking it up on the sales floor.

I have already noticed a small drop in the number of circulars I receive. One big arts and crafts chain has dropped the weekly paper ad completely and prominently states that it’s coupons and sales are available on Flyerland.ca. The future is here….

It’s official, we are going on a vacation. Just the 2 of us. No kids. How did we pull this off? Let’s just say we are pretty much out of favors for the next few years.

The real question is will I be allowed time to research the retail industry in Cuba. I’m all about going to Havana, checking out the history, examining how retail works in the Communist Regime. My wife is all about slushy alcoholic drinks with little umbrellas. I have also been served with a temporary restraining order forbidding me from bringing any device that will allow me to communicate with the outside world (such as my laptop or CrackBerry). It will be interesting to see how many mental notes I can remember after consuming $2 rum.

I’ve been reading varying reviews about Cuba and the service and I’m excited to see how they cope with The President and Owner of Captus. I’ve heard tipping goes a long way to ensuring service during busy times.

If anyone has been to Cuba and has any advice or tips, please email me directly at doron.captus@rogers.com.

I am a BrainTrust Panelist over at www.retailwire.com. From time to time we get to ask questions of our fellow BrainTrust Panelists through what is known as a BrainTrust Query. I submitted one on Friday which stirred some debate and generated some really good answers. Click here to see the actual query and responses. This post is a short follow up to events that transpired over the weekend. The deal is that in the City of Toronto, all retailers must charge 5 cents per bag to act as a deterrent to customers. Loblaws, Sobeys and other major supermarket chains have decided to charge for bags regardless of the jurisdiction. The end goal is to get customers to use their own reusable bag or to impulsively purchase the chain’s own branded bag. I made some very interesting observations during the first few days of this new retail reality. Getting customers to change habit takes time and a lot of instore marketing oomph. I, like many other

Yes I love my planet!

customers completely forgot my own bags and found that I was putting stuff back while still on the sales floor because of a lack of bags. Other observations were that customers in line would put merchandise back when presented with the additional bag charge. I want to stress that these actions are ‘initial reactions to negative stimulus‘. As retailers, it is our job to remove any and all obstacles that would prevent a customer from making a buying decision. Telling customers that ‘bags are now 5 cents’ or ‘we don’t supply bags for free anymore’ is a negative thought statement and could quickly put a customer’s back up. (I think some of that was lost in the actual query, I swear, 5 cents is not a big deal to me, I’m telling you what I saw customers do!)

The following Sunday I found I was in the exact same predicament in the exact same store with no bags and a ton of stuff for my daughters’ upcoming birthday. Today I was going to buy bags. The difference on Sunday was how the cashier conveyed the message. First I was asked in a very friendly manner: “Did you bring your own bags today or do you need to purchase some?” I really liked how this was asked. Much better than the cold and robotic ‘No Free Bags’ or ‘Bags are 5 cents’. After eloquently softening me up, she takes it a step further. I reply that I need 10 (I repeat: 50 cents won’t kill me) and she look at my order and says: ‘Why not get a reusable basket for $4.99? You can fit all of today’s purchases and you will definitely remember to bring it next time cause it cost you 5 bucks!’ Did a cashier just try to up-sell me? Did I miss something? Finally a clever checkout person that understands me and my love of margin.

So my query has a happy ending. A cashier that up-sells at the register is what I was going for with my original discussion. How does an associate convey a negative as a positive to build the basket? How well does the associate overcome obstcals to make a sale? These are selling techniques that should be mandatory for every single person that works on a register. She ended up getting me for 2. A sleek sexy black Green Bin for myself and a boring green Green Box for my wife. Hooray for the enviorment!

What an excellent way to wrap up Small Business Week. Let’s venture into the minds of Tom and Marlene England, Owners of Dancing Bear Toys. Marlene tells me that sales were up for April so lets find out just what the heck is going on at this successful Maryland toy store.

Captus: I want to start by asking you what your opinion on merchant mentality is. What does that term mean to you?

Tom: It’s absolutely critical. If merchants don’t have a positive mindset and a real commitment to working hard at their business every day, they’re going to struggle. Marlene and I are both glass-half-full people, so that helps a lot. When the economy bottomed out, we just dug our heels in and were determined to do even more to make our business succeed. Of course, it helps that we love what we do and we really believe in the products we sell.

C: How important is your web presence to your business? Does it increase sales or awareness or both?

Marlene: Our web presence is important but I think it could be even stronger. We tried e-commerce awhile back but, to be honest, didn’t have the time to keep it up to date and make it work as it should. So now our website is strictly informational…which is fine…but I see opportunities for improvement where content is concerned. Even though we’re not selling products online, I’d like to highlight certain products and companies to better explain why we select the toys and games we do.

T: Our customers check the website regularly for events, hours, directions, etc. If someone’s planning a trip to Frederick, our website gives them a good feel for what they’ll find in our store, both products and atmosphere.

C: Your website is outstanding. What lead you to that type of layout? Did your developer help with input?

T: Thanks! Yes, we worked with a great designer who knew our store and knew our personalities and the

The Englands know their customers

philosophy of the Bear! That helped a lot.

C: Your market seems to be premium niche toys. Big operators like Toys R Us are starting to bring in more products like that. What differentiates you from the big box?

T: Definitely the customer experience and product knowledge.

M: Absolutely. Customers can walk in our store and say, ‘I need a gift for six-year-old twins with short attention spans’ or ‘What’s the best toy for a child who’s borderline autistic?’ We get questions like that all the time, and we (and our staff) know every product so well that we can point customers in the right direction. Try asking those questions at Toys ‘R Us or some other big box store and see what response you get. Also, everything looks special in our store…it’s not row after row of products all crammed together. We have demos out so everyone can ‘test play’ games and toys before purchasing. Our store is bright and cheery, and we try to make it fun and engaging - for kids and adults.

C: In a previous email, you mentioned that you have a great location. What determines a ‘great location’ for retail?

T: I think any location can be a great location for retail if you are willing to work hard and make your store a true stand-out destination. We’re very fortunate to be in a historic downtown that is already thriving and vibrant with many other independent businesses. Just being in downtown Frederick is a huge plus for us. We see lots of tourists, particularly in the summer and fall, and we’re part of the Downtown Frederick Partnership that plans events year-round to attract locals and visitors.

C: What kind of culture do you have at your store? Is it important for your staff to believe in what they are selling and why?

M: I think we have more fun than anyone. And you know, when the owners are happy and truly care about their business, then your staff picks up on that positive energy-and customers do, too. We have a mission and vision statement, and we share that with staff…along with information on why creative play is important, why we believe the products we carry can have a positive impact on families. We only hire people who are a good fit with our store philosophy.

C: Without getting into proprietary information, you mentioned sales were actually up for April. Have you implemented any different strategies to cope with the current economic environment?

T: We continually look at our expenses to see if there are areas where we can cut back. Knowing that families have less disposable income these days, we’ve adjusted our inventory to include more products that retail for $25 or less. We’ll bring back more of the higher-end items but probably not til fourth quarter.

M: We’ve done more instore events too, which are free. Plus we’ve established a presence on Facebook and Twitter…and have a blog (although I forget to update it). We send out e-mail blasts and have an ‘instore’ newsletter that costs us next to nothing to produce. There’s so much you can do marketing-wise that doesn’t break the bank.

C: You advertise that you are a battery free store. Is that a challenge or an opportunity for you?

T: It’s a huge opportunity - and it’s not as hard as you might think to maintain this niche. Kids actually think it’s pretty cool that we can fill an entire store with not just low-tech but no-tech products.

C: And my last question, I have worked in the toy industry in the past and I always found it a challenge in training my associates in product knowledge because of the vast amount of lines and sub-lines. What strategies or partnerships do you have for training associates in product knowledge?

M: This is a constant challenge since we continually pick up new vendors and new products. We try to learn as much as we can about products at trade shows and thru our toy reps-and then pass that info along to staff thru training sessions and one-on-one.

T: We have a demo of just about every toy or game out for people to ‘test play.’ We encourage staff to play, too. Staff are expected to learn to play games during slow times, and they can take demos home with them as well.

I want to say thank you again to Tom and Marlene England for answering my questions. It’s always uplifting seeing a small merchant succeed in a category dominated by big box players. We all know that cruise ships and super tankers cannot be steered as quickly as a speedboat. It is much easier for a smaller retailer to be more involved in the community and that goes a long way in maintaining a presence withing your local demographic. My last question is: When will the Toronto location open up and do they need a manager? Click here to visit The Dancing Bear website.

You see them everywhere. Some are really easy to get to. Some are really hard to get into. Most create traffic headaches and their purpose seems to be lost in execution. We call them ‘the suburban power center’. There you will find 1 or 2 or even 3 big box retail anchors and possibly a bunch of smaller stores to fill up the space between the anchors. Is this a good place to be for the small merchant? Are you really going to benefit from any foot traffic that the big box generates? The solid answer is: depends.

Way back when power centers were all the rage, the formula was you would build a power center, charge the anchor your cost and make money off the little guys that came in. Works for the landlord but I say the small merchant should be more careful as to where they plant roots. The big boxes don’t care about you and when developing a marketing plan, it’s better to rely on your own source of foot traffic.

Customers rarely stroll power centers or mini malls. Just look at where the concentration of parking is on a weekday or early weekend day. It’s mostly around the anchor. If your anchor is a grocery store, chances are they are returning to their car with perishables and they are out of there. Most customers are fatigued after shopping a big box. Whether they received good or bad service, most customers are not in the mood to shop around after interacting with the big box. And if the box is doing their job correctly, they may not have any money left either. Don’t automatically think that being beside a Target or Home Depot is going to bring you foot traffic. Having parking lot signs and sandwich boards out there may not help actually get customers to your door. Many of these big retailers put restrictions on the mall as to what can be done to the exterior so it’s important to know what you are getting into as well. Check your lease THOROUGHLY!

Another important point to consider is closures. When Sam’s Club high tailed it out of town, they took a dollar store, an independent coffee shop and a bunch of convenience stores with it. My connection in the commercial real estate underworld laments that it will take an average of 14 months to fill those boxes.

I love the resurgence of the shopping district. I’m seeing it in every sizable town I’m in. Malls are being renovated and taken upscale. Boulevards are being rejuvenated. I was impressed to see no available vacancies along the merchant area of Yonge Street near my house. These areas are conducive to a positive retail shopping experience. When I say location, I mean LOCATION…

I will wrap up Small Business Week tomorrow with my interview with Tom and Marlene England, Owners of Dancing Bear Toys. They are in a very competitive market and none of their products have BATTERIES! Find out their strategy and mindset tomorrow.