Online Exclusives

The Art of Being Chosen

By Tom Branna, Editorial Director | November 30, 2010

A look at how successful retailers are, well, successful.

At this time of year, amid the hustle and bustle of holiday shoppers, it can be easy to forget just how brutal the retail business can be. But the list of retailers who couldn’t adapt to the dynamic market changes is a long, familiar one, and includes once-well-known brands such as Woolworth, Montgomery Ward, Eckerd Bradlees, I. Magnin, Laura Ashley, Caldor…the list goes on and on.
 
Meanwhile, retailers like Walmart, Carrefour, Best Buy and Bloomingdale’s, not only survive or thrive, they often dominate their class of trade. What makes one retailer outlast another? Some observers may chalk up who wins and who loses in the retail game to luck or various winning business plans. But industry veteran Martin Butler knows better. In fact, he know so much about winning at retail that he’s written a book, aptly titled “The Art of Being Chosen,” a study of retail business strategy based on face-to-face interviews with leading retailers.
 
 
Martin Butler
In researching his book, Butler interviewed dozens of retail bigwigs, such as Daniel Bernard, former chief executive officer of Carrefour, Mike Gould, chairman and CEO of Bloomingdale’s, and Jack Shewmaker, a former president with Walmart—and he came away with the six secrets of their success, all written in a witty, fast-paced style. Here’s a quick look at what Butler uncovered:
 
1. They knew precisely what business they were in.
As Butler notes, if what you’re selling isn’t unique, the way you do it better be. For example, Macy’s has snapped up many a defunct retailer’s space successfully because it operates 69 intelligence units that are each responsible for just 10-12 stores. That way, each store is sure to carry exactly what they need and sell everything they get. Or as Butler notes, when a service based business starts making decisions based on P&L, it is sure to fail!
 
2. They won’t be chosen if they are not trusted.
According to the author, there’s noting bigger in a retailer’s armory than being trusted. Trust can take many different forms, for example, ensuring that products are well stocked or that sales items truly are on sale and not some form of fake discounting. But in today’s transparent society, consumers expect even more; you know, things like fair trade and being on the right side of human rights issues. In “The Art of Being Chosen,” Paul Charron, former chairman and chief executive officer of Liz Claiborne, explained how working closely with the White House Apparel Industry Partnership to ensure workers’ rights gave Liz Claiborne customers a reason to trust the retailer and choose Claiborne over a competitor when all other things are equal.
 
3. They know who their most important customer is…their staff.
Or, to put it another way, a happy workforce is a happy customer. But how does a retailer make sure employees are happy? Paramount, says Butler, is giving employees a feeling of belonging. The staff needs to know that they are making valuable contributions to a retailer’s success; doing that correctly can transform a business. Or, as Harold Schultz of Starbuck’s put it, “we’re not in the coffee business serving people, we’re in the people business selling coffee.”
 
Treating employees right takes many forms. As Mike Gould, chief executive of Bloomingdale’s, noted, “we don’t train our employees—that’s for animals. We educate them.”
 
4. They have visionary thinking.
By that, Butler isn’t referring to some mission statement that gets written once, locked away and never looked at again. No, he’s talking about the day-to-day stuff that excites customers and keeps them coming back for more.
 
Once a successful retailer understands just how tenuous a hold he has on his customers, he will scour the globe in search of ways to excite them. For example, over the years, The Robinsons Group of Singapore had fallen from a prestige department store to a deep discounter. But when John Cheston became CEO in 2004, he quickly realized that “you can only motivate by price for so long—not forever.”
 
At first, Robinsons took a big hit on its numbers. But with backing of its staff (see secret 3), the retailer climbed all the way back to the top.
 
5. They celebrate and revere the power of ideas.
Creative thought excites the best retail leaders. And all of them have in place an effective process to turn those ideas into reality. But in order to work, ideas must be memorable. Think SUCCES:
• Simplicity
• Unexpectedness
• Concreteness
• Credibility
• Emotions
• Stories

A perfect example of this is concept was Saks Fifth Avenue obtaining a zip code for its eighth floor shoe department: 10022-SHOE. After all, if Steve Sadove could convince the U.S. Government to think out-of-the-box, imagine how he could persuade consumers?
 
6. The world’s top retailer bosses are all the same—they want to be different!
The most effective way to be remembered is to be different or, as Butler notes, “you can’t be chosen if you’re not remembered.”

And for Philippe Giard, managing director at A.S. Watson Group, that means trying to be all things to all people via a multi-format model.

“One-size-fits-all is not the future,” he insisted. “It doesn’t cater to the rapidly changing needs of modern customers, particularly the complexity of needs in Asia.” No wonder why Watson stores range in size from 1,000 square feet to 120,000 square feet and include convenience stores, specialty supermarkets and megastores—and they’re selling products from 120 countries in an effort to reflect local tastes and aspirations.
 
With the rise of the conservative consumer in established markets and the new consumer in emerging markets, it’s more important than ever to be among the chosen few. Butler’s book provides a blueprint for companies trying to do just that.
 
More info: www.mb2000.com
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