Rick Kroetsch, associate publisher of Alive Publishing Group had some wonderful information to share with retailers who attended the Puresource retailer conference in June. The basis of his presentation was to inspire attendees to be opened minded in their quest to make their stores healthier.
His first words got the retailer attendees’ attention. “Break the mold. Don’t be afraid to change things…don’t get too comfortable. If it’s not broken, break it! Stand back, don’t be afraid and give it a good swing. Focus on building a new model that is better than the last one.”
Rick pointed to two iconic retailers who were maybe ‘afraid’ to break the mold. “Sears has seen a steady downward trajectory in sales over the last 15 years, from $6.7 billion in 2001 to $2.6 billion in 2016.” In late June, Sears Canada announced it was closing 59 of its 255 stores and laying off 2,900 employees.
“In June this year, the Hudson’s Bay Company announced it would lay off 2,000 employees and cut costs aimed at saving $350 million a year by the end of fiscal 2018. This prompted company CEO Jerry Storch to say, ‘The nature of business right now is that you have a declining store traffic and brutal competition. We are planning for industry conditions to remain very tough. We want to develop a business model that can succeed even in tough conditions.’”
Rick points to food giant McDonalds as one company that is looking at ways to break the mold. “McDonald’s McCafe is the company’s answer to Tim Hortons and Starbucks. They were losing customers to coffee shops, so McDonald’s improved its coffee and surveys indicated customers liked the coffee. The company also developed a new look for its McCafe.”
However, Rick says McDonald’s really went outside the box in France, which is the company’s largest market outside of the United States. “In June, the company began giving forks to its customers who ordered its premium burgers, which cost twice as much as a Big Mac. This caters to the French, who generally have a preference for sit-down meals with cutlery.” Rick said this initiative followed a 10-store test before rolling it out to all 1,400 restaurants.
A garden centre in Port Coquitlam B.C. decided to open a fashion department six years ago. At the time, owner Wim Vander Zalm said he was mocked mercilessly for the move by other owners. It turns out Wim was right. The fashion department turned a seasonal business into a year-round operation. It evened out cash flow and kept staff employed year-round. The fashion department continued to grow from its early test and today is the store’s biggest moneymaker, currently occupying 3,000 sq. ft. with plans to add to it.
Rick presented other examples of businesses that dared to be different, and then challenges attendees to do the same. “Ask who your target is, what it is they want to buy and start thinking about what else you can sell them. Loblaw’s – a long-established grocery store – now sells $1 billion a year in clothes. What else can you sell at your store?”
Attendees were reminded that their biggest competitive threat is often from outside your industry. “Look at Apple getting into the music industry in a big way, or how film companies lost so much business to digital. And who is the biggest proponent of driverless cars? It’s not the major car companies. It’s companies like Google.”
You have to make change happen, he explained. “Change will always be there. The only variable is its rate and degree. Look at making small changes in bite-size chunks. People can accept change in small doses. It is harder to make massive change all at once. Ask yourself what is driving change in your business. Will your customers fight the change or adapt?”
There are a number of common changes facing organizations, he said, including customer expectations and needs, instant access to information, increased competitive environment and new technologies.
“What should you do?” Rick asked. “Be the change agent. Get your staff involved. Let them drive for a while and see what it’s like. Think about Nike…’Just Do it.’ Don’t be afraid to explore brave new worlds. Go outside the comfort zone of what you know. Your goal should be increasing traffic into your store. Partner with companies that help the customer experience. Think about where else your customers would be and get out in front of them from there.”
Rick concluded by reminding attendees that their competition is copying them. “They are trying to play catch-up with natural health. You want to keep ahead of them. You have to train like you’re going to run a marathon. Customers can read labels and current articles on health products, so they can see the ‘what.’ Your staff needs to help them with the why and the ‘what else.’ Knowledge is your competitive advantage and differentiating factor.” •
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