Thursday, March 10, 2011
The December quarter has ended on a happy note for many Indian retailers. Some retailers have reported growth in top-lines of over 25% and growth in net profits of close to 50% over same quarter last year. That is indeed a very loud reaffirmation of the strengthening consumer sentiment across the Indian subcontinent. Thankfully for wise economic governance; the Indian economy has remained largely isolated from the global meltdown, and even the whimpering cries of slowdown have been silenced by the rapturous excitement in our malls and high-streets.
When retailers begin focusing on same-store growth; one of the challenges they are bound to face is being able to assign clear and unambiguous levels of ‘Accountability’ across their retail operations.
Corporate vision and strategy will always determine annual goals. However, those goals can be reached only when there are right behaviors demonstrated across the entire retail value chain. Loosely translated, a ‘Right behavior’ is any and all behavior that is required for the moment. A sales person – no matter how tired he or she is - walking the customer to the back of the store to identify what the customer wants, is the right behavior for the moment. Just as the store manager having to make a trip to an other branch or to the warehouse to get the promised merchandise for a customer - instead of hiding behind disrupted warehouse delivery schedules to justify why he is letting the customer down on the promised delivery.
Whatever the growth that retailers are aiming for in the next fiscal; they have to find ways to assign goals ‘fairly’ to their ‘responsible owners’ at all levels – both at the back-end and the front-end. ‘Fair allocation’ of goals at the store level could mean that the store is given sales goals commensurate with its location and performance history; while ‘fair allocation’ at the individual sales person level would take into account an individual’s inherent and trainable strengths and his or her commitment to the store’s goals. In fact, it is the ‘willingness’ of the sales associate to do whatever is required of him to meet the store goals; that determines whether he is being a ‘responsible owner’ or not.
In their anxiety to reach goals, the ‘corporate’ often believes that an individual sales associate’s innate capabilities are adequate; and in this false belief, overlooks the need to equipping them for accomplishing it. It is like an army general issuing instructions to his battalions to charge into uncharted territories of their enemy and pitch the flag of victory – in barefoot; with no arms and ammunition and with no protective gear; only to later moan the shameful defeat and occasionally mourn his dead jawans!
Executives at the national level will have to arm their teams at regional and store levels with skills required to reach their goals. A wise investment in training – to overcome the limitations of innate talent and unharmonious application of wisdom, is a good place to begin.
After all, only right behaviors will beget right results. Any shortfall in reaching goals, under closer examination, will reveal either the ignorance (lack of training) or negligence (lack of willingness) to apply the right behaviors. And the extent to which the team remains farther from its goal is in direct proportion to its excessive and brazen use of wrong behaviors. Numbers, in and by themselves cannot be changed. And numbers will not eternally continue to look encouraging in spite of the limitations of retail staff.
Poor numbers have their levers in store staff either not being ‘capable of’ or ‘unwilling to’ perform as desired. The store staff’s ‘inability’ can be overcome by transferring the skills through proper training and strengthening the right behaviors through constant practice.
However, there is not much that can be done about a salesperson’s ‘unwillingness’ to perform. People who are unwilling to perform despite training, are a liability. In fact, they are a bigger liability than people who leave the organization after training – the latter being one of the major concerns of retailers.
Store managers and team leaders will have to take on the responsibility of not only reaching their own numbers but also helping their teammates achieve theirs. Positive and regular coaching is indispensible in this collective responsibility towards delivering numbers. Retailers should train their managers to become responsible coaches of their teams. Just as professional sports coaches are always on the field watching their wards; store managers have to make themselves available to spend more and more time on the sales floors observing their teammates. They will have to either be ‘praising’ right behaviors demonstrated by their sales teams or be ‘coaching’ them for right behaviors. In that spirit, ‘coaching’ becomes a ‘duty’ more than a responsibility.
In the back-end too, ‘Merchandisers’ should realize that their accountability is never complete without their proactive ownership of what they choose to carry in their stores – the styles, the colours, the designs, the quantities - in short, the whole assortment and merchandise mix of any retailer, is the sole responsibility of merchandisers – until every single unit is sold, preferably at full-price! ‘Buyers’ own the responsibility of ensuring that right quality of the defined SKU are bought in right quantities and in collaboration with the ‘Sourcing’ teams, will ensure that they are bought at the right prices from the right sources. Together with ‘Logistics’ and warehousing, the onus of reaching the desired quantities to the right places at the right time are all different components and degrees of accountability shared across the back-end of the value-chain.
The cycle of accountability for the customer-facing end, thus seems to complete itself when store managers begin to coach their sales staff; and in turn be coached by their area or district managers; who in turn are guided by their national level executives.
Leaders on both sides of this ‘infinite 8’- at whose cusp the ‘Corporate’ it its magnanimity and wisdom meets its ever-demanding and hard-to-satisfy ‘Customer’- have to ensure that accountability is clearly defined; fairly allocated, meticulously managed and generously rewarded.
Wednesday, January 12, 2011
I spent most part of November and December in Istanbul, Turkey; training about 80 sales associates, store managers and retail managers in our customer services skills and store management strategies. It was a rewarding experience, both for my client and me. The client, a chain of Health and Beauty stores; has a rich pedigree and is committed to staying ahead of competition by offering superior customer service in an increasingly competitive market. Organized retail in Turkey is mature and one can see international brands and home-grown labels jostle for market share blurring boundaries between mass merchandisers and niche retailers. Our client’s appetite for growth is supported by their burning desire to excel in all aspects of retail and customer service.
We began with the fact that my trainees were not conversant in English. But the seemingly obvious reservations about the language barrier – was demolished from the word ‘go’ as the simultaneous translators did a fantastic job of seamlessly conveying my English words to the ears of my Turkish listeners and effectively relaying their thoughts to me in English – all in miraculously real time. My jokes resulted in instant ruptures of laughter as the deep insights found their ready adaptors. Every single role-play turned out to be lively and each batch of trainees left fully motivated, determined and eager to put their new skills to practice. I never once felt that I was in a foreign land training people who don’t speak the same language….and yet understood every word I spoke and reciprocated by sharing their real life experiences serving customers.
I came back with many fond memories and strong validation of some of the inevitable requirements for success in retail - A clearly defined retail offering; peopled by retail staff with an attitude to serve; mature in their understanding of customer service and willing to learn and sharpen their skills to excel in their roles. This was set in an ambiance conducive for bringing about individual accountability with objective performance management systems.
This unique experience also validated the fact that right attitude coupled with right skills can work wonders when used appropriately. Each of the 80 odd sales associates and managers went back to their respective stores fully inspired and committed to accomplishing their goals – both individual and store goals. What followed was some spectacular outcomes from each of those stores – sometimes glaringly obvious; and at times, supremely magical.
Yasemin was mostly silent during training and spoke only when asked to. She never volunteered for any of the role-plays either; maintaining a low profile over the three days when she was in my audience. Little did I imagine that she would go back into her store and create history? Her store, all of a few hundred square feet, is situated in a largely residential locality with limited traffic of customers unlike a highstreet or a mall.
It was a lazy Sunday afternoon in early December and Yasemin had come in for the second shift. A customer in her mid-thirties had walked in with no intention to buy, and was perhaps browsing the store to get some ideas for a gift for her expectant sister. Yasemin had approached her with a warm smile and a gentle greeting complementing her hand bag, thus striking a friendly conversation with the customer. She had made the customer feel so much at home that the customer had dropped all her resistance that most customers harbor against sales people. As they spoke, Yasemin took the customer around the store, helping her understand the different product categories. They instantly bonded like friends and Yasemin had successfully built a person-to-person rapport with her customer as she continuously probed to understand her customer’s needs.
Knowing the purpose of her visit – to get some ideas to gift an expectant mother - Yasemin helped her customer to baby shampoos, creams, moisturizers and everything else that a mother would need for her first child and things that she would need for herself before and immediately after child birth. Yasemin didn’t miss the opportunity to make the would-be aunt feel special. She reminded her that the arrival of a new member into the family is also a wonderful reason to celebrate her ‘aunthood’. Not to mention, the aunt-to-be ended up helping herself to some goodies. The customer had not broken into a sweat even after 60 minutes and four baskets full of personal care products for her expectant sister; the baby and herself.
When the bill was made, Yasemin had created history. She had created the single highest transaction in the history of the chain – a transaction that came to be twice as big as the highest single sale ever - a sale equivalent to $550.
The customer not only had left the store singing praises of how Yasemin had bonded with her and indulged her in the moment, but also had helped her choose the right products.
Stories such as these abound in the weeks that followed; individuals and stores, out-performing their earlier highs in all key statistics - total sales; average ticket sizes and number of transactions. Another store beat its highest number of transactions by 30%; while a sales associate in a different store has bettered her average ticket size by 20% and consistently maintained it.
Obviously, we are continuing to work with the client; helping them create such magic in their remaining stores.
Accountability in retail begins with giving each customer service associate a reasonable goal and giving her the required tools and techniques to achieve the goal. For all this to happen at a systemic level, it is essential for the retailer to imbibe fair and objective ways of setting goals; measuring performance by rewarding the right behaviours and correcting the wrong ones through dedicated coaching.