It was just announced that Sports Authority is going the route of bankruptcy and is definitely not winning retail. According to many people, this was inevitable. They were bought out by a hedge fund years ago who probably over paid and borrowed the money so they are highly leveraged in the deal. Interest payments were probably killing them, but operations is not their problem. Running a company is easy (relatively) but guiding consumers into the stores and getting them to buy is the real trick.
This should come as no surprise how retail works now. It is all about experience. Using the most successful company in the world at the moment as the example. Apple has shown that with a minimalist store they are able to really turn the profits because they are caring about experience. People are there to show you how things work. Their people KNOW how things work. They are winning retail because of their products and their stores.
This experience is how they are combining their webstore success with their retail channels. There have been a few companies that have tried to do what Apple has done. JCPenney gave it a go back in 2011, but it did not give them the success that they were really trying. That whole situation is now a very good school case study. I personally think that the problem is that they did not mix the products and the experience together the right way.
So how do you get the right product. If I knew that then I would not be doing this blog. That is always the hardest thing to do. Find the right product. Even then matching the right product to the right company is hard as well. The ipod would NOT have taken off if Apple did not come out with iTunes. The iPhone would not have been as successful if the ipod did not go well. That first product is key to furthering the brand so you do not want to mess it up. Or at least hide the mistakes. There is a common saying of hire slow and fire fast. Get the mistakes out the door as quickly as possible.
I have made it know quite often that I am not a big fan of the idea that “The customer is always right.” They are not always right. You can quote me on that too. I have seen all too often that bad customers end up costing a LOT more than if you would not have sold them in the first place. A few of my consulting gigs showed this very clearly, but how does it relate into retail. Really easy actually, but it takes training your sales and customer support staff. Empowering them to make the right choices and understanding how those decisions impact the business. You need to be able to see how that customer is initially reacting and using the product. In our jewelry store my wife does custom pieces and we know right away if a customer starts to complain in the design phase, then there is no hope for a good outcome. Right then and there, we know that our pricing goes up enough to cover the cost of having to spend a lot more time with the customer. This could be up to 50% higher than first expected. The customer does not like this so the decision to continue then lies with the customer instead of us not wanting to work with them.
Winning retail is hard right now. The web is intruding on storefront with the desktop and mobile. You need a combination of good products and good customer service along with meeting the customer where they are at.