A Retail Holiday Tale

I like to keep tabs on the current retail environment, and also as a consumer I enjoy going to stores such as Costco to see what interesting values their good buyers have found.

I was in a Sam's Club, kind of an average neighborhood, on a nice day on a weekend afternoon so it was busy but not jammed. It was uneventful at first, but then I heard an announcement on the PA - they were giving away free knives in the produce section.

I'm used to the free food samples but this was a bit novel and got my attention. I decided to go over and check it out.

By the time I got there a crowd was already building - I guess ‘free' had gotten their attention too! So it turned into a demonstration, sort of a mini infomercial. I thought people might leave (I was about to) but it became rather entertaining.

The sales assistant whipped out a real steel hammer and literally started sawing through the metal with one of these knives. And then she sliced some paper-thin slices of tomato with the same knife - I was impressed! I had visions of being able to slice through a rainforest jungle with one, so a Thanksgiving turkey would stand no chance.

As on TV, she added more and more stuff to the set, including a food chopper, and pointed out the overall value. They also had a lifetime replacement guarantee with just a $2 shipping cost, and being at Sam's the product should be good.

In the end I saw about a dozen people head off with a set of knives - even I had the urge to get one! Anyone who didn't purchase still got the promised free knife and they looked very satisfied. I think everyone there will be out telling their friends about the product and showing them how it works (hammer sales will likely go up).

I'm pretty sure none of those shoppers had ‘knives' on their shopping list so this was a $40 impulse buy. Given the current economic climate, the success of that company made me step back and assess what they were doing right. While their environment may be rather different than your own, the elements are the same for all retail:

• Use effective marketing to get your customers' attention
• Really know who those customers are and how they think
• Offer a great value, and be sure the value is perceptible
• Try to make the shopping experience enjoyable and entertaining
• Give your customer something to talk about (in a good way!)

Another critical success factor was the fact that the salesperson didn't sound or act like there was a recession going on. Rather the opposite, she enjoyed what she was doing and so the people enjoyed watching (and buying) - it was part of the value! She hadn't agreed with the idea that there is a recession on and so therefore sales would be bad.

I am not trying to say that attitude alone can solve every retail problem. The point I am making is that successful retailers take the appropriate actions to deal with the environment at hand, rather than deciding it is out of their control.

They make sure that they have the systems and tools that not only keep their operation efficient, but that also allow them to find new customers, market more effectively to their existing customers, and ensure that the customers are satisfied with the right products and excellent service.