Big Box Blues: The Next Chapter

For almost two years I have been rambling on about the demise of the big box retail industry.

I have postulated that our current economic situation, highlighted by high unemployment, tight credit and slower GDP growth, will be with us for years. It has been my hypothesis that a low growth economy will end the reign of Big Box retail due to the model’s over reliance on the opening of new stores and the attraction of new customers.

Blah, blah, blah is what most people heard. The evidence just wasn’t there.

“You’re a bitter old man with a loose grip on reality.” Is what my closest friends and most of my family members have been telling me.

But before shuffling off to watch The Simpson’s, I was quick to respond:

“Sure I’m bitter, but you’d be too if they kept changing the packaging for Publix ice cream … and sometimes I see things that aren’t really there, but does that mean I’m wrong?”

But now, I think my screwball ideas might just be coming to light. Wall Street sharks are circling in the economic moats that Big Box retailers have built to protect their kingdoms.

Wall Street bought the shares of Big Box stores and rode a wave of phenomenal growth and spectacular returns for 20 years. But after 6 quarters of declining same store sales, Wall Street is looking for a better return on the assets retailers hold, than the management of these Big Box firms have been able to provide.

For Wall Street…It’s payback time.

Ron Burkle and his boys take a run at Barnes and Noble, Blockbuster just folds, Gymboree takes a sweetheart deal from Bain Capital and JC Penney runs for cover into the arms of Goldman Sacks (?) to fend off Bill Ackman's hedge fund Pershing Square Capital Management (which, by the way, just got done chasing after Borders).

I don’t think these are isolated events.

I think this is a warning shot for Big Box executives to get the cash they are hoarding back into productive use, to fish or cut bait regarding under performing stores and to find a new retailing model that can keep the sharks satiated.

Can Big Box respond fast enough for Wall Street? My thoughts…? No way!

There just isn’t enough original thinking inside the vaulted HQ to get it right fast enough.

Wall Street created these behemoths and they will dismantle the firms they can, and merge the ones they can’t, until the last drop of whatever value is in the assets is squeezed out.

When it’s over, there will be empty shells of retail companies all over this great land.

Out of the carnage will rise the new retail models that can survive in a low growth economy, at least until the sharks regroup and get hungry enough.

It’s moments of lucidity like this that I live for.. that and Publix ice cream sundaes!

I’m the most popular person in America!! (Well, almost)

It’s official.

The Retail Salesperson is the most popular job title in America according to The Bureau of Labor Statistics 2010-2011 Occupational Outlook Handbook, and of course, my Yahoo homepage http://finance.yahoo.com/family-home/article/110348/the-popularity-issue.

In May of 2009, the BLS stated that 4.2 million people were paid an annual median salary of $20,260.00 to stand in one place for long periods of time, to work weekends, evenings and holidays, and to endure limited advancement opportunities, just so the American populace could get their fill of groceries, hardware supplies and back to school clothes.

If you add in Cashiers (3.4 million), Food Service workers (2.7 million) and general office clerks (2.8 million); that’s a grand total of 13.1 million people uttering the phrase “May I help you?’ some 90 million times each day.

Actually it isn’t a phrase. More often it’s uttered as a single word: “myelpu?”

So 13 million of us get up at the crack of dawn, put on a vest or name tag and struggle through a day of monotony and anonymity.

But sometimes we do get noticed.

By now the name Steven Slater is etched into the minds of each of us in the customer service business. His spectacular exit from a JetBlue aircraft and the company’s employment are the stuff of break room fantasies. Watch his exit here: http://extratv.warnerbros.com/2010/08/watch_steven_slaters_jetblue_slide_escape.php

His life will now be endlessly analyzed, and continuously debated through at least a week of news cycles. His actions will be celebrated, derided and contextualized to support whatever concept countless numbers of pundits care to make.

But I fear that the real issue, as I see it, behind both his actions and the cord it struck with the American people will go unexamined and unmentioned.

Anyone who has worked with the general public can tell you horror stories about the customers they have had to deal with. When pressed, however, they will admit that the vast majority of customers are really very easy to help and that more than most are appreciative.

Conversely, we have all had our fair share of run ins with nametag wearing obstacles whose sole function is to stand between us and the items we came to purchase. Here too, we have to admit that while we may focus on the negative, most of our interactions at retail are without conflict or angst.

So why has this extraordinarily unrestrained act of quitting generated so much interest and discussion?

It’s because at its most basic level it highlights the conflict between entitlement and frustration inherent in the world of big box retail.

My point.

Customers are continuously bombarded with ever inflated promises about what they can expect when they enter a big box retail store. Promises that are from their very inception deceptive. They expect to find legions of expert staffing and products at ridiculously low prices, in endless quantities and varieties. It’s not only a fantasy, but it’s also a model for economic disaster.

What they fail to realize is that the powers that be in the big box retail world care more about customers as a concept than customers as a reality. They worry endlessly about the idea of a “customer”, but could actually care less about a single, actual customer.

Now shareholders, that’s a different matter entirely. But shareholders are easier to keep happy than customers. Customers don’t always know what they want. Shareholders, however, just want you to hit the numbers. Reduce payroll, increase margin and limit inventory and then the shareholders are happy. Customers? Not so much.

Retail workers don’t have the privilege of dealing with customers conceptually; they have to deal with them in the flesh, each one an individual in a very specific time and place. It’s the retail workers lot to try and deliver on the false promises created by the big box marketing machine.

It all too often ends in failure for the customer, which generates disappointment and frustration.

The Retail worker is not immune from this frustration. No one gets up in the morning looking forward to creating disappointment and anger among legions of basically blameless individuals.

Unless of course you are a politician running for office.

So over time, the frustration builds in the customer. To meet this frustration, and to avoid admitting that their promises were false, big companies have enacted extremely liberal policies that are designed to “empower” the customer to the point that the customer feels as though their will should be enough to change the laws of physics.

This “empowerment” condones customers venting their frustration powerfully and continuously until product that isn’t there magically appears, until prices reach the point of negative numbers and until every employee in a five mile radius is summoned to do their bidding.

Retail workers are left to their own devices in trying to meet the demands of these corporately empowered customers.

As customers feel more and more entitled, retail workers get more and more frustrated.

So then, when the customers sense of entitlement leads to anger that they feel perfectly comfortable expressing in a physically damaging way, the retail worker hits a point where the glory of 12 hour days, the comfort of knowing that you will be doing the same thing for the next 20 years and the allure of a princely $20,000 a year in annual income just can’t hold the frustration back any longer.

KABOOM!!

Grab the beer, yank the emergency handle and slide off into the sunset of frustrated worker legend.

There has to be a better way.

Normally I would implore big box managers to examine how they handle both customers and employees and to make changes to policy that can mitigate these types of damaging interactions.

But because of the fact that there are more of us working in customer service than in any other industry in the country, I think It’s time we look to ourselves for solutions.

If you are a customer service worker, look at yourself as a member of a grand profession. Not glorious, but certainly numerous. You can look to your right or left in any crowd and see another soul in the same high frustration job and draw solace. There are more of us than there are of them. More hard working Customer Service professionals than overly-entitled customers and we need to help each other.

Stop and think about the guy serving us coffee on our way to work. He’s one of the 13 million. He shares more in common with you than you might think. Give a smile, take a breath and realize that he has to transact your purchase with a crappy computer system the same way you will for the next 10 hours. Remember the frustration and take a second to acknowledged that what we do, what 13.1 million of us do, is difficult, and demanding.

Lets’ each take a moment to give each other, and ourselves the break we need to do our jobs. There’s a ton of us out there and if we start thinking about how we can work together, there is no telling the changes that can be made

I took the summer off.

I took the summer off.

Actually, it was a forced vacation. I developed the biggest case of writer’s block since…well… since the last guy who suffered writer’s block.

See, still suffering.

While I seemed to have spent most of the summer doing nothing, I recently realized that I had been working.

My affliction with the written word forced me to shut up long enough to actually listen to other people, people who could not have disagreed with me more about the future of retail. Folks who felt that things were just starting to get around to normal. I knew they were wrong, but every time I tried to write about why and how they were wrong, the words simply wouldn’t come.

And for a while, it seemed that they might be right. In the beginning of the summer the economy was improving as judged by the return of the Dow industrials to a post 10,000 level, the moderation in the unemployment figures, and a slight rebound in retail sales.

Big Box retailers had trimmed overhead, meaning that they had stopped hiring replacement workers and that they had let inventory levels fall to disastrously low levels. But prices had stabilized and margins had returned. “See”, they would tell me, “The worst is over and things are going to be just fine”.

I seethed with my inability to contradict them in print.

I choked on every attempt to point out the fallacy of their arguments. I tried and tried to write about the disastrous effects of the decline in service levels and the irreparable harm that comes from sales lost to overly efficient (read non-existent) inventories.

I banged on the keyboard trying to communicate exactly how theses short sighted cost cutting strategies executed by large retailers would simply pave the way for new, innovative retailers to come along and eat the big boys for lunch. But the words would drop out of the computer and turn to absolute drivel (you may argue that this drivel continues, but hey, I gotta blast through this block somehow).

“The numbers”, I was constantly reminded, “simply don’t support your gloom and doom scenarios”.

Maybe, but something is going on that the numbers don’t show. I know it, but as yet I can’t articulate it.

My retreat from the confines of the hovel where I write also allowed me to listen to the voices of customers when they weren’t being customers. Since writers are notoriously unsocial beings, I used my kids as cover and did what all great writers do, I eavesdropped on conversations I had no business listening to.

As I sat by the pool sipping margaritas (ok, so it was the community pool and the margaritas were actually caffeine free Diet Cokes) , I listened to people from all walks of life and in all types of financial situations talking about how they were changing the way they shop and how they pay for those purchases.

Most are done buying on credit, either because they are forced to pay with cash because of their financial situation or because they have vowed not to get into debt of any kind.

Lots had mailed in the keys to their homes and were looking to rent for the foreseeable future.

Everybody was talking about what they were doing to cut back on spending because they didn’t have the money or, more often than not, because they were scared about spending any of the money that they had. Those with money weren’t interested in spending, because they didn’t know how long it would have to last.

Many had given up looking for work and were in the midst of starting a small business. Anything they could get into for as little capital as possible. They were starting landscaping businesses, handy man services, dog grooming, dog sitting and dog walking business. They were selling homemade jewelry at the farmers market, canning vegetables, making home made soaps; you name any small time business operation, and somebody at the pool was starting one.

On the other side of the pool, different people were talking about how they had stopped using their national franchise grass cutting service and had switched to a local guy because his prices were competitive and he showed up when he said he would. Others talked about firing their contractor because they found a great handyman who would take on even the smallest job and who did great work. Still more where raving about the home made products they bought at the farmers market because they were better made and cheaper that what they could get in the stores.

“Hmmmm” I thought. And since I couldn’t bring myself to write a friggin’ word, I was left with thinking and going “Hmmmmm”.

On the sales floor the sentiments were the same. Customers had changed the types of projects they were taking on. Doing just enough to get by and not going whole hog. Repairing instead of replacing, painting instead of remodeling, fixing instead of buying new. Sure, they were spending at a level close to what they had spent in the past, but something was very different. The business was better, but it wasn’t the same kind of business as it had been before the recent “Economic Unpleasantness.”

The numbers were showing that the sales were coming back, but the numbers weren’t showing that the type of business we were now doing wasn’t the same type of business we had done “before”.

The powers that be starting talking about how things were going back to normal and while I couldn’t see that happening, I had to admit that something certainly was happening. What it was wasn’t clear.

I had been expecting to see a new type of retail model rise out of the ashes of the economic collapse. That hasn’t happened…yet. Right now it seems as though the “old” Big Box model is being used by customers in a completely different way

If so, then the question is, can Big Box change to accommodate this new shopping pattern and this new economy or will it turn those customers away unsatisfied. How long will customers put up with limited product offerings and lackluster service regardless of the pricing? How long will lower prices stay and how long will it be enough? A gallon of paint is a gallon of paint, but when it’s purchased by a homeowner rather than a contractor, then it becomes a completely different product.

The dollar sale is the same, but the process of completing that sale successfully is completely different.

As the customers came back into the store this summer, I noticed they needed a good deal of hand holding. The wanted more information from the sales associates, who where virtually non-existent and they were looking for products that we were out of stock on or which we didn’t carry.

Big Box has yet to adjust to these new shopping patterns, right now they are just happy to see more shoppers, they have yet to tune into the changes these shoppers are making. Will Big Box adjust? Can Big Box adjust?

I don’t have the answers, but at least now I think I understand the questions.

Improvise, adapt and overcome

Improvise, adapt and overcome;

That’s the unofficial motto of the United Sates Marine Corps. It summarizes how Marines accomplish their mission objectives in difficult circumstances.

I have never been brave enough or tough enough to be a Marine, but then, few people are.

I have always been impressed by how succinctly those three words; Improvise, Adapt, Overcome, encapsulate exactly what it takes to be successful .

No plan can ever anticipate exactly how things are going to go in real life. In the business world, no plan can ever predict exactly what the competitive environment will look like, how the customers will react or even how well your own staff will execute.

That’s why retailers in the future, meaning now, would be wise to take a page or two from the Marine Corp handbook. They need to make sure that the people they bring into their organizations have the ability, and the freedom, to Improvise, Adapt and Overcome.

In the future, as in right now, retailers that want to succeed need to:

• Hire the right people
• Compensate those people competitively
• Train those people
• Give those people clear mission objectives
• Instill in those people a culture of success

Successful retailers hire the best people then can possibly get. It sounds trite to say that every employee should have the potential of one day running the company, but trite as it may be, that is exactly the type of person you should be hiring. Successful retailers look for people who want grow along with the company. They need people who are committed to learning and who are looking forward to taking on progressively more responsibility. They are looking for people who think like owners.

To get those types of employees, successful retailers offer competitive compensation. That’s more than just a good hourly wage. It includes health benefits, career training, sufficient time off, potential for profit sharing and a clear explanation of what it takes to progress through the organization.

Also, successful retailers look for employees that are not just interviewing with the company, but who are also interviewing the company. The effect of the recent economic unpleasantness has people looking for solid, well lead companies that can be competitive in the future. The right employees will ask about the company’s commitment to technology, their plans for growth and maybe even ask to see the company’s financials. This should be seen as a sign that you are looking at the right person rather than as an imposition. Today’s productive employees think of themselves as independent contractors looking for a business partnership as well as a job. At least, the right employees are.

Getting the right employee is a great start, but you won’t have them long unless you give them the right training. In addition to learning the basics about company policy, proper procedures and suitable conduct; successful retailers are teaching employees how to read balance sheets and P&L statements. They are conducting seminars on product development, vendor relationships and the ins and outs of overseas sourcing. They are providing sales training that goes beyond the meet and greet to courses on proper body language, overcoming objections and developing meaningful rapport with customers.

There is a wealth of training available that can be delivered in written form, though community college classes and via the internet that smart retailers are capitalizing on. Successful retailers hire employees that want to learn and then they are offering them the tools to gain tha t additional knowledge.

Smart retailers are also using employees as trainers. Nothing cements a culture like the passing down of knowledge from an elder. Having employees teach each other attaches validity to the information that is critically valuable.

Well chosen and well trained employees are most successful when they can internalize the company’s overall objectives. Clear objectives, broad in scope and set in the mid to long term (6 months to 3 years) work best. Don’t try and put objectives on a coffee mug. They need to be clear and simple, not catchy and overly cute.

While there should be as little restraint placed on the employee trying to achieve an objective as possible, do set limits. Engaging employees in the development of specific strategies helps them gain an understanding of what the company wants accomplished and creates self imposed parameters. Employee participation in strategic (and later tactical) development gains the all important employee buy-in and acts as a built in B**L S**T detector, you can never be too aware of just how out of touch with things on the front lines you may be.

Set milestones to measure progress and to prove you are serious. What gets measured, gets done. Ongoing reporting will help to direct employees towards those milestones and will re-enforce the company’s commitment to that progress. Along with the reporting should be a system for providing guidance that will help employees in reaching the company’s objectives. Guidance can be stories of how others have succeeded, a demonstration of how progress to date is affecting the growth and or health of the organization or specific training given to high performers as well as lagging employees.

This commitment to achievement brings us to the last point: Creating a culture of success. You can hire the best, compensate them better than anybody else and give them the best training in the world, but unless you expect great things, great things will never occur.

Set high expectations and celebrate the achievement of those expectations. Tell the stories of heroes, those who have Improvised, Adapted and Overcome. Create a mythology surrounding past achievements and continue to look for opportunities to add stories to that mythology.

Reward those who do an exceptional job and… as harsh as this sounds… get rid of those who simply can’t cut it. Nothing builds morale better than the termination of an employee who clearly is not achieving. Now, don’t mistake this for using termination as a motivator. No one works well under the pressure of losing their job. I’m talking about removing an employee who has been given every chance for success and for one reason or another has not been able to succeed.

In the end, the retail world of tomorrow, which started yesterday in case you were wondering, will be a place where success or failure happens in the stores. Wining retailers will be flexible, nimble and instantly responsive. Successful retailers will staff their stores with people motivated to improvise, adapt and overcome.

Already, smaller companies are stealing market share from big box stores by focusing on having the right management and staff, and by committing to giving them the best training possible. Then they give them clear and concise business objects for them to accomplish.

Once you can do that, then you can have your management and staff meet any business situation, no matter how difficult by allowing them to Improvise, Adapt and Overcome.

It's the technology stupid!

In my previous post I promised to stop complaining about the state of retail today, and to outline how I think successful retailers will operate in the future. With the understanding that the future of retail starts…right…now.

Not that anybody in the world of Big Box retail is noticing, they are still perplexed about what’s happening with the economy and obsessed with figuring out when things will go back to “normal”.

NEWSFLASH: This is “normal”.

Okay, so maybe I’ll keep complaining, but that won’t be all I do.

I’m trying to divine what the retail landscape will look like in the very near future. The Big Box format will continue its decline as post economic meltdown consumers look for new ways, and new places, to spend less money.

The Big Box model can’t survive a slow growth economy.

What will survive, and actually thrive, are smaller retailers and regional chains which continue to be profitable in the absence of growth.

These smaller players, without the burden of excessive debt and short term shareholder demands, will continue to gain market share as they capitalize on the opportunities created by changes in consumer attitudes and buying habits. These smaller, smarter retailers will succeed by using tools and techniques developed by the Big Box industry to dramatically shift the market.

One area where smart retailers are gaining a competitive advantage is through the use of appropriate technology.

I’m not talking about using the latest technology, or having technology as the focus of the business, but using those technology tools which make the business more efficient, and which increase the joy a customer finds when buying.

History can show us how to use the best technology out there to improve business processes. One of the things Big Box retailers did very well was to integrate all the different parts of their organizations through the use of technology. The systems, and the best ways to use them, are in evidence everywhere in retail today.

Global sourcing, electronic ordering, supply chain management, assortment maximization and pricing schedules can all be improved thorough the use of readily available hardware and software solutions.

Second and third generation programs, based on propriety systems developed from scratch and at great expense by the Big Box industry, are now available to any size retailer at a fraction of the original costs.

Smart retailers will use these best in class systems and will piggy back on the numerous industry protocols set up to serve the Big Box industry.

Products contain RFID chips to make Wal-Mart happy. Those same chips, and the costs they save for shipping and receiving, are available to any retailer with an RFID reader. Any retailer can use the same inventory control systems as the Big Box stores because they have done the ground work in forcing suppliers to integrate tracking options into their products.

Vendor managed inventory “solutions” now required by large retailers actually allow smaller players to purchase at lower prices. Big Box stores are forcing manufactures to carry extra inventory in forward warehouses. Manufactures are then selling some of the same products to smaller retailers as a way to offset the inventory carry costs thrust on them by their Big Box customers.

This same logic, of using what the Big Box industry built to lower your own costs, exist in automating payroll systems, labor scheduling, training curriculum and inventory management.

It’s just like the Apple commercial states: “there’s an App for that.” The scope of what’s available is immense, it far exceeds the list of what’s needed and there in lies the rub.

Successful retailers will use any and every tool that will help them do a better job, but they will not use a tool simply because it’s there. They will take stock of what’s needed and use only that technology that can make the store run better, lower operating expenses and help delight customers.

On the merchandising side of the business, smart retailers will stay on top of how customers develop and use technology.

They will adapt their stores, their product mix and their service offerings to match how customers want technology integrated with their shopping experience.

Smart retailers will make their stores wifi hotspots. They encourage customers to download information regarding the products they carry. They will let them use smart phones to check offers from competitors. Since the customer will find out how you stack up soon enough, better to have them do it in your store.

By encouraging comparison, it gives retailers the chance to highlight advantages and it gives them instant learning about what the customer thinks is important.

Successful retailers will stay involved in social media. They will use social formats to start conversations on-line about their company. Social media forums allow retailers to answer consumer questions, to respond to complaints and to thank customers for complements.

Successful retailers will use technology as a way to engage customers as well as a way to sell them.

Big Box also created nearly unlimited ways for any retailer to collect any data they want, and then to analyze what was collected. From simple purchase histories to detailed permission based personal preferences, retailers can collect information about customers and even non-customers. Smart retailers know who buys and who doesn’t buy. They use data mining programs to find out what else they might buy. They constantly test strategies and tweak messages to find out what works, and what doesn't.

However, successful retailers also know that information is not he same as knowledge.

Smart retailers will take the information these sophisticated systems can provide and balance it with a little common sense and all the wisdom they can muster. Information based decisions are usually shortsighted and often dead wrong.

Information, put in the proper context, produces knowledge. Collect the information, use the knowledge.

So that’s more than enough about how smart retailers, the ones that succeed in the future, will be dealing with technology. I expect to see more and more, smaller and smaller, retailers adapting Big Box technology as the backbone of their businesses.

Next on the list is a look at how smart retailers maintain a maniacal focus on the customer.

So what's your big idea?

Bitch! Bitch! Bitch!

For months now I have been railing against the unwillingness of Big Box retailers to adjust to the realities of the postconsumer meltdown economy. I have berated them endlessly about their inability to adapt as drastically different consumer attitudes emerge. I have predicted the death of the Big Box Store model because growth, as defined over the last 30 years, is no longer sustainable.

Much of this ranting arises out of the frustration I experience daily on the selling floor of my Big Box employer. I deal with the customers, who to me are actually real people, stressed out about losing their jobs, their homes and their retirement savings.

I stand there helpless as they walk through my store relatively empty handed because my Big Box corporation can only offer low prices.

Today’s consumer is not all that interested in low prices from my Big Box store, they can always get lower prices at the Super Discounters, on line, or at any number of non-retail outlets (think E-bay, the thrift store and Craigs list).

What they want is value, as they, the customer, define it.

They want the right products, at competitive prices, and above all, they want somebody in the store that can help them buy the right products. They want service.

Beyond a few poorly written emails, a couple of badges for my vest and a new advertising campaign, my Big Box Company has not been able to do anything to capitalize on the opportunities offered by this post meltdown world. They talk the talk, but in their panic, they have overdone their commitment to controlling inventory costs, reducing labor expenses and putting short term shareholder gains ahead of long term shareholder value, so they are unable, or unwilling, to walk the walk.

Great!

I’m a super genius because I can see the problems and the disastrous effect they will have on the Big Box industry. I get to wear a great big I TOLD YOU SO !! button in a few years.

The real trick would be to figure out what type of retail model will be successful moving forward. Okay, Here’s goes:

The successful retailer will be focused on organically growing their business over time. They will run their businesses to make their customers happy, while turning a profit and providing meaningful employment.

Notice what’s missing from that definition? There is no mention of “increasing shareholder value”, there is no “Commitment to Excellence”, (who starts a business to be mediocre?), there is no talk of “Employee Empowerment”.

Growth is defined as a result of running the business properly, rather than being the objective for being in business.

The overarching objective is to make money while making the customer happy. Not just focusing on the customer, or giving the customer what they want, but in making them happy. Delighting the customer rather than servicing them.

Employees are granted access to a meaningful job, as the employee defines it. This of course assumes they want a meaningful job. If they just want a paycheck, then Micky Dees is always hiring, so you don’t need to bother with them. Successful retailers will work hard to find the right employees, train them continuously and compensate them competitively.

The successful retailer will be:

ð Committed to utilizing appropriate technology

ð Manically Customer focused

ð Employee engaged

ð Community centered

ð Sustainably operated

Each of these points is a critical component of what I think a successful retailer must do and I intend on pontificating about each of them in detail over the next few weeks.

Stay tuned!

“HELP!!!” “I’ve been EMPOWERED and I can’t get up!!!”

The Big Box retailer I work for recently held their annual Pow Wow to celebrate what the company achieved in 2009 and to unveil their big plans for the rest of 2010.

Big Box retail loves to develop detailed plans, rolled out with theatrical flare and ambiguous nomenclature.

These plans are normally based on incorrect assumptions, flawed conjecture and a lot of information with no knowledge. They are therefore grossly inadequate at helping associates manage their day to day struggles.

The speed at which business changes means that any plan, especially the ones that are grand in nature and extremely detailed, are out of touch with the realities in the store before the first PowerPoint slide splashes on the 100 foot plasma screen.

But no matter.

Since these plans look good in the annual report or in the boardroom, they are followed to the letter by managers who don’t understand them, but who are too frightened to question them.

All of my senior management was at the meeting. Everyone from the store mangers on up. Some 2,000 people crammed into a giant conference room in the bowels of a random humongous casino in Las Vegas.

I can’t help pointing out that a Las Vegas casino is the perfect allegorical setting for introduction of the company’s 2010 plans.

Given the fact that the current business environment is completely unstable, what the company is actually doing is placing a huge bet on whatever plans they have dreamed up in the Ivory tower.

Just like in Vegas, the odds are not in the bettor’s favor.

I was not in attendance at the annual meeting so I have no first hand knowledge about what the company is actually planning to have us lowly hourly associates do. The information I have gotten so far consists of a nearly incomprehensible memo from my store management and whatever snippets I can glean off the employee website.

I am left alone to read the corporate tea leaves and try to divine what I am supposed to do in 2010 to contribute to my company’s success. Here’s what I think I have figured out so far:

· I am supposed to participate in a Service and Sales Offensive. I am to provide service, and the sales will follow. I am not sure, but I think I am supposed to provide that service in an offensive manner.

· I am supposed to stop making it so difficult for the customer to make a purchase.

· I am supposed to get rid of bad habits. (I’ll start by not eating ice cream right before I go to bed).

· Wait, page three of the memo says I am expected to have a focus on sales. Maybe I am supposed to focus on the sales that don’t occur following my offensive service?

· I am supposed to do things differently because change is good.

· I am supposed to buy into what the company is trying to accomplish.

· I am supposed to have a positive attitude about the changes I am making and whatever it is I am buying into.

To help me understand the steps I am supposed to take to help the company achieve its objectives for 2010, I have been given some interesting facts that provide support for the steps I am taking.

• 37% of customers shop in my store and purchase elsewhere. (I think I am supposed to be happy about the 63% of customers who buy in my store or maybe I am supposed to ignore them and focus on the 37% who are going somewhere else.)
• Customers like clean restrooms
• Customers don’t care about selection and price anymore; they are looking for better service. So we are expanding the products we carry and lowering the prices on hundreds of items across the store, while limiting future hiring to part time staff only.
• Customers want someone to listen to them. (I think I am supposed to find my customers other customers to talk to).
• Customers have high expectations about everything.

Well, one thing is perfectly clear, I have no idea what the company’s objectives are for 2010 and I have no clue as to what resources I have been given to help the company achieve those unknown objectives. I know that I am supposed to make changes regarding how I do my job, but I have no idea what those changes are supposed to be.

But that isn’t the worst part….not by a long shot.

I’m not sure, the signals from the company are still fuzzy, but if I am not mistaken, I think I have been “EMPOWERED”!!!

Telling your employees that they are EMPOWERED is just another way of way of telling employees; “Sorry, you are all on your own!”

If you are EMPOWERED you are allowed to do anything to make the customer happy…except for the things you are not allowed to do.

Being EMPOWERED as an associate is kind of like being a dog wearing a shock collar hooked up to an invisible electric fence.

Like the dog, you can’t see exactly where the boundaries are, the fence being invisible and all, so the only way to know how far you are allowed to go is to wander around until you get a painful, bone jarring electrical shock.

But unlike the dog, the EMPOWERED associate’s boundaries are constantly changing. One day you are allowed to offer a customer free shipping to meet a competitors offer and the next day ZZZZIIIZZZS, you are reprimanded for offering a customer free shipping to meet a competitors offer.

For three weeks you re-arrange your hours to better service customers and then one day, ZZZZAAAAPPPP!!!! you find that you are forbidden to work anything other than you written schedule without three days notice and the signatures of corporate management four steps up the corporate ladder. Since you have violated policy three times, you are informed that the next time it happens you’re fired.

After a while you become even more like the dog who, after being shocked enough, just sits on the porch all day. It’s better to stand around and do nothing than to try to do something, which means perhaps risking your job. Maybe you’ll get fired, you don’t know, and that’s the point. Being EMPOWERED actually increases an associate’s powerlessness by filling them with a form of job loss paralysis.

Being EMPOWERED means that you can not be successful. If you don’t break the rules to help a customer you are subject to dismissal, but if you break the rules to help a customer you are subject to dismissal.

Heads you loose, tails you loose.

Vegas would love to have its gamblers EMPOWRED. The odds are not just in the houses favor…there are actually no odds at all. The gambler (or the associate) looses 100% of the time.

Being EMPOWERED is another symptom of the demise of big box retail.

Empowerment is just another way of the corporation saying:

“Hey, we have absolutely no idea of what to do. We can’t come up with anything better so why don’t you guys at the bottom of the pay scale just take your best shot? Maybe it’ll work?”

Big Box retail loves to talk about how empowerment helps associates by giving them more control over their day to day activities. Big Box raves about how associates love the fact that they can take “ownership” in the company’s future success and how much better it is for management to have loads of EMPOWERED associates running around the store, since EMPOWERED associates can practically mange themselves.

Really?

I love not knowing what the rules are day to day?

I love not knowing if something I did (or didn’t do) two weeks ago is finally going to come to the attention of somebody who thinks my actions were reckless and I am shown the door?

I love “owning the store” while being paid in a year what my CEO makes in a day and a half?

If I have so much power, then where is my compensation for wielding that power?

If I, as an hourly associate, am EMPOWERED to take control of how my store operates and how the company’s customers are serviced, then why don’t I get the paycheck that the people who used to have that responsibility got?

Seriously, where is my money?

Last year, one of the worst in the company’s history, the top five executives of my big box retailer received salary and stock totaling $101.3 million. They averaged $2,026,000 which is exactly 65 times my annual take. The top dog took in $3.84 million which tops what my EMPOWERED ass got by 120 times!

The way I see it, being EMPOWERED is just another way for me to take on duties that used to rest with mangers up the food chain. Ok, then why not pay me some of what they got now that I am doing some of their job?

Like I said, the information trickling out of the corporate brain trust regarding what associates are supposed to do in 2010 is still sketchy.

Additionally we are into the second month of 2010 and we still don’t know what raises, if any, we may be getting.

Is it too much to hope that somehow the new responsibilities for associates are aligned with increased compensation for taking on those new responsibilities?

Probably.

If I have been EMPOWERED, then God help me! I don’t know how I’ll find the strength to do my job while shouldering the burden of the company’s 2010 plans.

Maybe the company will give me a button that says, “don’t bother me…I’m EMPOWERED!”

Finally!

The news is starting to come out about how the recent “Economic Unpleasantness” has changed the consumer. Not just slightly altered, but fundamentally changed.

A recent article in Entrepreneur by Kim T. Gordon highlights a new study identifying new shopping attitudes and new buying habits.

It’s about time.

Anyone who works in retail and who pays attention (which automatically eliminates many in management) has known that the consumer has changed for over a year.

People are focused on value, they want to know how a purchase will enhance their lives, how it will create more for them rather than just give them more to have. Outside of commodities, the lowest price is being compared to performance or expectations of performance in an attempt to determine value. If all you offer is low price, then you automatically become a commodity.

So with people being smarter about how they spend, big box retailers have reacted by being dumber about how they sell.

Prices in my store have been going up and down like ping pong balls. I have one item which will fluctuate in price from 58 cents to 68 cents and then to 78 cents, and then stair step back down again…all in the same week. Prices have been changing, both going up and going down, on hundreds of items in my store on a daily basis. There’s no rational behind these price changes, just a knee jerk reaction from some knee high jerk in corporate.

How do you establish any type of value proposition with a customer if your prices are continually changing?

And don’t think customers don’t notice. They bring the changes to my attention every day.

When it comes to a home improvement purchase of any size or complexity, consumers will visit the store multiple times. Each time they come in the price has changed and it generates confusion and doubt that makes closing a sale nearly impossible.

Not that closing a sale is all that high on the big box retail “To Do” list. We have cut labor to the bone so that rather than spending time with customers developing the trust and confidence necessary to help them buy, we have given up selling to be able to provide better “Customer Service”.

“Customer Service” is all about cleaning the store, re-painting shelves, and moving product displays for the 19^th time. “Customer Service” is about checking things off of a work list rather than helping customers buy anything.

Not that there is anything in the store for them to buy. The other big box retail reaction to these new consumer attitudes is to reduce inventory in the store to keep costs (but not always prices) lower.

So in direct contradiction to what the experts in the press are saying: Another important tip is to be visible when customers are ready to buy what you offer, we have almost no significant quantity of any thing in the store.

In our business, there is something called “job lot quantities”. If you don’t have enough inventory of something for the customer to complete the entire project, then you don’t get to sell any part of the project. So if you are short a few $1.25 flooring tiles, then you loose the entire $2,000 tile flooring project. So the few dollars we save by having less $1.25 floor tiles in inventory lost us $2,000 in sales. A loss that will not show up on any report on the knee high desk of some corporate pricing coordinator.

As the article in Entrepreneur concludes: No matter your target audience, whether male or female and across almost every income level, one thing is clear--the recession has created a new normal for American consumers, and there's no turning back the clock.

I sure hope someone in corporate is reading, I actually hope they can read, because they have stopped listening to us in the store and if they don’t figure this new consumer out soon, it will be grim days for big box indeed.