February 2010

Stores, Stores, and More Stores!

I am always on the lookout for interesting new stores and great retail stories. Well this month I have two new stores to tell you about.

THE NEW MICROSOFT STORE

In the September 2009 issue of this newsletter, I reported briefly on the new Microsoft store that had just opened here in Southern California. Recently I got the chance to visit the store and spend some time looking at the design and trying out the merchandise. My first impression back in September was that it was Microsoft's version of an Apple store and that still holds true.

There are similarities but also some interesting differences. The obvious difference is the merchandise, which includes PCs, Xboxes, Windows-based phones, and a large selection of both Microsoft software as well as third-party software.

To be completely fair I must admit I am an Apple customer and have bought a number of Mac laptops over the years along with an even greater number of iPods and accessories. With that said, I am not a Microsoft hater like some of my Apple brethren. I use Microsoft Office, although I do swear at it occasionally. But in the end, I will forever be biased toward Apple products.

Among the similarities between the two stores is the Microsoft Answers Bar, their version of Apple's Genius Bar. One difference in their approach to providing expert advice appears to be that Microsoft charges for most of the services available at the Answers Bar. These services range in price from $49 for a Performance Tune-Up to $99 for Advanced Software Repair. Yes, Apple charges for some of its services, too, but I have found that most of the services provided are included with the purchase of an Apple product.

The basic merchandise displays and store layouts of both the Microsoft store and Apple stores are very similar. I was disappointed that Microsoft didn't create a revolutionary store layout and merchandising approach. Being in the innovation business, it would seem logical for them to do something innovative with the store. A couple of things do improve on Apple's store design. For example, Apple displays large back-lit graphics on the walls of its stores. The graphics wall in the Microsoft store displays video and constantly changing still photographs. These large graphic displays create a more interesting look to the store.

Another difference is small but important. Both stores display a good portion of their merchandise on simple tables, but Microsoft places stools in front of each computer and other electronic items. Unfortunately, Apple provides few places for customers to sit down.

The store was quite busy at noon on the Wednesday I visited, which may or may not be an accurate reflection on how well Microsoft is doing in the retail business. We'll have to wait and see.

A GIANT NEW FOREVER 21 STORE!

As we've seen in the last few years, dozens of former department store locations around the country have been closed and left empty. Sometimes these large buildings have been split into smaller spaces and leased to several retailers. In the last few months apparel retailer Forever 21 has begun to lease and remodel several former Mervyn's locations.

This past week I had the opportunity to visit the newly opened Forever 21 in Cerritos, California. It took over the abandoned Mervyn's, which had been one of the anchors in Cerritos Plaza, located in an ethnically diverse area of southern Los Angeles County.

If department store executives would like a lesson in how to create a great shopping experience, they should visit this store. It is spectacularly merchandised, beautifully laid out, and employs more than enough sales associates to serve the customers.

In many of my visits to department stores over the years, I have always thought the practice of jamming as many four-ways and other display racks as could possibly fit into the space was a major detriment to a pleasant shopping experience. That is not what has been done in this store. Sufficient space has been left between displays to allow customers to comfortably walk around and see all the merchandise. Two people can actually be looking at merchandise and not bump into the racks or each other.

This store does not sell high-end, designer merchandise. All the merchandise is moderately priced and generally focused on younger consumers. In a large community with a substantial population of middle- to lower-income consumers, this store offers just the right selection of merchandise. While the trade media sings the praises of the fast-fashion retailers that have come to the U.S. from Europe in recent years, it would be foolish to overlook Forever 21 and its approach to affordable fashion. This is a terrific store for today's value-oriented customer. I believe these new larger stores will prove to be a big hit.

NOTE: Click the photos to see larger versions.

2010 BLOOMBERG BUSINESS WEEK CUSTOMER SERVICE CHAMPS!

Once again some extraordinary retailers were big winners in this annual ranking of customer service superstars. The number one spot went to L.L. Bean as it continue to do things to create legions of loyal customers through its catalogs, web site, and stores. Apple was #3, Publix Super Markets #5, Nordstrom #6, Barnes & Noble #9, Ace Hardware #10, Amazon #11, Wegmen's Food Markets #12, Starbucks #13, Panera Bread #21, and True Value #22.

IS HAGGLING BACK IN STYLE?

With today's recessionary economy, a recent article in the St. Louis Post-Dispatch caught my attention. The writer sites a Consumer Reports study from last year that showed more than two thirds of Americans tried to bargain for a lower price with most getting what they wanted. In this article customers claimed to be able to haggle at Macy's, Lowes, and several other stores.

I spent a good portion of my retail life selling merchandise at prices that were negotiable. While it was often good for the customer, putting the price of the merchandise in the hands of salespeople was and continues to be a very poor way to do business. Matching the price of a competitor works for many retailers--anything more in the way of price reductions should be left to management.

WELCOME TO OUR NEW SUBSCRIBERS!

Over the last several weeks I have been in front of a number of audiences. Many of the retailers in these audiences signed up for this newsletter. Among the audiences were jewelers who belong to the Independent Jewelers Organization as well as retailers attending the annual Photo Marketing Association Convention. I'm delighted to have all of the new readers of this newsletter.

If there are topics you would like to see addressed here or even if you want to comment on something I have written, feel free to call me at (800) 766-1908 or email me at george@whalinonretail.com.

If you aren't reading my blog already, I would like to invite you to take a look. I regularly write short pieces about new stores, trends, and retail happenings. Take a look. I think you will find it interesting.

Until next month...

Tom Peters, one of the world's most respected, best-known business gurus and best-selling author, named Retail Superstars, Best Business Book of 2009.
There are thousands of business books published every year, So for him to recognize a book on retail as the best book of the year is great for the retail industry. It is an incredible honor to receive this kind of recognition from Mr. Peters.

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