RETAIL INTELLIGENCE: The New Age of Retail

Much like the traditional definition of family has changed in Canada, with almost half of marriages ending in divorce, the relationship between customers and retailers has followed a similar path. Just like a marriage that has soured with one partner becoming numb to the other person, retail customers are feeling abandoned and ignored.

“Whether it is the big box or the specialty independent retailer, we have destroyed the in-store relationship by hiring employees who have no interest in truly helping a customer or business. We have let them thrive as long as they can stack merchandise and keep the store organized,” explains retail business and marketing expert Bob Phibbs.

Bob Phibbs, known as the “Retail Doctor,” has helped thousands of businesses in every major industry, including manufacturing, service, retail, restaurant, and hospitality. He is a nationally recognized expert on business strategy, customer service, sales and marketing, with over 30 years of experience beginning in the trenches of retail. Phibbs spoke at SEMA last year.

“We collectively have let customers find frustration, anger, and disappointment where they once found fun, enjoyment, and fulfilment. We just didn’t realize how angry customers were getting until the recession occurred.”

Now as customers venture out again, much like a divorcé looking for a new partner, they are finding, in many cases, things have gone from bad to worse. Many savvy consumers now use brick-and-mortar stores to shop, then go home and buy online.

“Jobbers have to get out of the replacement mindset. They have to stop thinking that they are just replacing something that has worn out, like a set of brake pads or a pair of wiper blades, and get into the upgrade mindset – that there is a better way or a superior product to use that the customer should seriously consider. You have to let the customer know there is something else available when they come in the door or call in for parts,” explains Phibbs.

“If you think consumers are just going to walk in and say, ‘I want to buy more product,’ that isn’t going to happen. You have to grease the wheel a little bit by elevating your store with the right attitude towards those parts. In Canada, as in the U.S., there are a lot of places to buy automotive parts and a lot of WDs are getting caught on the idea that they are being price-shopped by everybody. But it’s not just about prices; it’s about what they can do differently or better. Ultimately, they have to be a business coach to their customers, rather than focusing on selling more stuff,” advises Phibbs.

Parry Automotive in Orillia is one example of a jobber that agrees with Phibbs’s approach and has elevated its retail sales and service offerings.

“The whole premise of our focus here at Parry Automotive is we have a captive audience that we have worked hard for and we have the ability to sell more than just replacement parts to them. They are consumers themselves, for many diversified products, both for their businesses and their personal lives,” explains Steve Van Kessel, Parry Automotive co-owner with his sister Susan Peacock. “If we are already going to an auto repair shop with a set of brake pads and we add some garbage bags and some fluorescent tube lights and whatever else they need at the same time, it helps to fill in the holes when the traditional automotive market is running a little bit slower.

“We see a lot of impulse purchases from our displays. Our customers are first and foremost coming to us for automotive parts, but when they are standing at the counter and they see our retail garden hose, or a broom or a pressure washer, we have just saved them a trip to another store. This growth has really been possible through the strength of our buying group, Modern Sales Cooperative, which over the last number of years, has really focused on bringing this diversified philosophy to the group and warehousing all these brands. It’s allowed us to get our foot in the door with these product lines,” adds Van Kessel.

“It is a wholesale re-imagining of how we look at not only selling, but also how we look at customers. If we start with customers first instead of the shiny object, the app, or the online sales, then I think the path becomes clear for retailers and that is what we are seeing,” adds Phibbs.

Having a great retail destination store is about encouraging customers to browse your store. You want them to find their way and be wowed by displays and have your trained sales staff show how several products can mix together, and also how they can use those items along with other items from various departments. This is what leads to profitable impulse buying; otherwise you are reduced to commodity pricing.

“Performance parts and accessories is our fastest growing division,” explains Doug Coates, vice-president of sales for Lordco Auto Parts. The B.C.-based auto parts supplier is one of the largest independent jobbers in North America with 101 company-owned stores, warehouses, and machine shops in B.C. “We also cater to the import performance market and have a strong following there as well,” adds Coates.

With 94 retail outlets, Lordco Auto Parts offers all the products it carries at all its locations, no matter the size of the store. “We can have any part delivered overnight to just about anywhere in B.C.; that’s what sets us apart from our competition,” says Coates.

Lordco is currently working to move its older, smaller stores into larger facilities. “Our Walnut Grove store in Langley, B.C., would be an example of this. We are going to be closing down a 7,000-sq.ft. store and moving it into a 20,000-sq.ft. facility. Ongoing, we will continue to expand our smaller, older stores. Our average size store today is 16,000, and we do have a 30,000-sq.ft. store,” adds Coates.

Truck accessories and RV parts have also become a big part of Lordco’s business. “A lot of our regular automotive customers have a performance car, or they have an RV or a boat, and we have products for all these markets. Our goal is to continue to expand our performance category. Because we carry the inventory, it allows us to compete with the online pricing, so customers come to us for the parts rather than wait for them,” adds Coates.

“Soft-skills training is not just about the features and benefits of the product,” advises Phibbs. “Yes, there will be some things that are technical and customers will come in looking for that specific replacement part, but there is probably a bunch of other stuff you carry that you have to find that window in which to sell it to the customer. You have to find a way to get them to buy that extra item, rather than just load up on the first item.”

Shopping is a personal experience, and people are often willing to pay more if they feel the salesperson is adding value to the decision-making process. What they won’t pay for is another slacker hiding behind a counter, stocking a shelf, or watching over them as a security threat. Consumers like to compare not only prices, but product information and popularity among other consumers, and they are doing most of this research online or with those all-important smartphone apps.

Lordco Auto Parts knows the value of a skilled sales force. “We have specialists in each one of our branches. These are the types of guys that can train you,” says Coates. “They have a huge amount of interest in the products they sell, and with the Internet there is a vast amount of information at their fingertips and they pass on their expertise to the customers.”

“This is a new era in retail, and jobbers who are diversifying are smart to do so, but even then it is not about the product; it’s about the people. It really comes down to the human element,” says Phibbs.

In the real world, it isn’t all about technology, it’s about contact, it’s about connection and it’s about respect. By ramping up customer interaction, you can build a loyal customer base, rather than one that will simply use technology to find the best price and buy from your competitor.