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| CHI1: |
In your 36 years of experience, what have been the most remarkable changes in the retail industry? |
| Dion: |
The absolute biggest change is the amount and sophistication of competition. In the past 20 years we have almost tripled the number of stores in the US and in the same time our population only increased about 25%. More stores chasing fewer customers! |
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| CHI1: |
How much does a retail sales staff actually play in a stores performance? Do you think that people care more or less about customer service today than they did, say, 10 years ago? |
| Dion: |
Store staff can easily either add or subtract over 25% in sales by their attitude and level of knowledge. It is very difficult today to have a product that a customer cannot get somewhere else so the performance of staff are a key differentiator for many stores. As to customer service, it depends on how you define it as a customer. Sometimes, for me, it means lowest price, sometimes it means product knowledge, sometimes it means speed of service, sometimes it means guarantee. It is different for every customer and even different for the same customer at different times of the day! |
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| CHI1: |
What is the most common error you see retail sales staff committing and how does it affect the business? |
| Dion: |
Easy, they really don’t care about me as a customer. In many cases I am someone who has interrupted their phone call, coke break, conversation with another clerk or whatever they were doing. Very few sales staffs make you feel like they are genuinely glad to see you and to help you. It has been reported that 68% of customers do not return to a store because of indifference and attitude of staff. |
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| CHI1: |
What strategies can a small business employ to compete against the mammoth retailers? |
| Dion: |
Number one, is never try to compete on price, the big guys will kill you. So that leaves either convenience, speed of service, uniqueness of product, incredible product knowledge and/or carrying items that the big guys do not carry and being an expert in a focused line. |
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| CHI1: |
Are there certain battles that one should avoid when taking on the bigger companies? |
| Dion: |
Yes, PRICE. Do not try to match their prices, avoid carrying the same items. |
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| CHI1: |
How does Chicago and its suburbs compare to other metropolitan areas? Would planning a retail business here be any different than, let's say, New York? |
| Dion: |
Chicago is a very easy city to get around in. If you live in midtown Manhattan for example, your closest Home Depot is in New Jersey! As a major city, Chicago has more shopping districts than almost any other city of comparable size. So, customers here have all the choices they could want and that puts real pressure on all retailers to be as great as they can be to keep their customer coming back. |
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| CHI1: |
Are consumer trends in the city and suburbs different? |
| Dion: |
Yes, the city is getting more apartment dwellers, yuppies and empty nesters and they have very different needs than the more heavily family populated suburbs. Product needs are different, food needs are different and mobility is different. |
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| CHI1: |
For the newcomer, how important is it to commission research before starting up? Is researching something I can do myself or simply not do at all? |
| Dion: |
If you mean a new business, proceed at your own risk without research. You don’t need to commission expensive primary research when so much good “secondary” research is available on the web. For example, you have to have a target customer in mind, how old are they, are they men or women, single or married, with or without kids etc. You can find this information for almost any area in the city from the US Census. You would not open a business catering to a customer who does not live or work near your business, would you? |
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| CHI1: |
Are there any "Hot" market trends in the retail industry? |
| Dion: |
Yes, the home category is very hot at the moment, you see Home Depot opening their new Expo stores to capitalize on this. Home theater is also hot, Best Buy, ABT, Tweeters and many others are doing very well in this category. Dead trends are fashion, sports and personal expression. |
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| CHI1: |
What about the person who's looking for a low risk retail business to go into? Are there any types of retail businesses that statistically have a higher success rate? |
| Dion: |
Yes, proven franchise opportunities are still out there and by definition they are lower risk than going it alone. It also depends if you are starting a business to make a living or to make money. The former requires much less profit to achieve while the latter is much more difficult. Like the oldest joke in retail “How do you make a small fortune in retail?” –- Start with a large one! |
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| CHI1: |
Supposing I own a store that has been well established for five or ten years. What are some of the steps I should take if I want to branch out? |
| Dion: |
Why do you want to do it? Do you have systems that can easily be duplicated in a second or third or fourth location? Do you have management and staff bench strength that will allow you to do it? Is the product that you sell or the way you sell it unique enough that it will attract and keep new customers in a new location? |
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| CHI1: |
What if I want to franchise my established business? What are some of the things I may want to consider? |
| Dion: |
Systems, Systems, Systems. Do you have a way of doing what you do that you can easily teach others? Do you have a product or way of selling that product that cannot easily be copied? What real benefit can you deliver to a prospective franchisee that they cannot get by themselves? Remember the philosophy that made Ray Croc a millionaire many times over “My franchisees will become millionaires before I do” and he held true to his word. Too many companies look at franchising as a way to make more money for themselves and not for their franchisees, stupid and short-term mistake! |
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