3 Things Toys"R"Us Can Learn From Today’s Retail Survivors
They say one man’s fortune is another’s opportunity. As Toys"R"Us auctions off 30-plus properties and shutter hundreds more following its recent bankruptcy, other retailers such as Target, Aldi and Big Lots are lining up to bid massive amounts of money with the hopes of expanding their physical presences and upping foot traffic.
Across the retail industry, some brands continue to exceed quarterly earnings expectations and are implementing aggressive growth plans, while others are folding stores and filing for bankruptcy. So, what are retail survivors doing right?
Nailing the Customer Experience
As competition continues to increase — both online and offline — brick-and-mortar retailers are under more pressure than ever to differentiate themselves in order to keep and retain customers.
Today, product selection — especially in niche markets — is no longer enough. Consumers now expect immersive in-store experiences. Consider LEGO stores, where the experience extends far beyond picking up the latest brick set. Visitors, both adult and child alike, can take part in hands-on play, use the digital box to see a model come to life in 3-D, or pick and choose their favorite pieces to build their next brick creation. American Girl is another great example of a brand with stores that have evolved to meet customer expectations. The company's stores feature doll hair salons and dining experiences, offer all-inclusive birthday party packages, and host exclusive on-site events. Can you pick up similar brick sets or dolls at other big-box retailers? Sure. But LEGO and American Girl’s focus on delivering unique in-store experiences gives consumers a reason to keep walking through their doors.
Empowering Teams Through Tools, Training and Transparency
A recent survey of retail store and district managers uncovered three key areas impacting employee morale and performance, and separating today’s retail winners and losers: corporate alignment, outdated tools and technologies, and poor communications. Among the findings, unhappy managers were 150 percent less likely to feel aligned with their corporate teams, with 21 percent reporting they struggle to understand key priorities. Unhappy managers were also twice as likely to report that their company doesn't have efficient systems for communication between corporate and store, and were twice as likely to agree that their store’s performance would improve with better organizationwide communication. Of those who reported low job satisfaction, 20 percent were more likely to report that they don't have the tools necessary to be effective in their jobs.
Addressing those gaps is the first line of defense in combating the startlingly low eNPS of -20 amongst retail leadership. With a focus on organizational transparency and alignment, and the right tools and training for the front-line brand ambassadors, retailers can reduce the costs associated with dissatisfaction and turnover, and, more importantly, improve the customer experience.
Leveraging the Power of Data
Data allows for massive opportunities in retail, helping brands reach the right customers, offer the right products at the best prices, and better personalize the shopping experience to create brand loyalty and drive performance. But while today’s retailers have access to more data than ever before — thanks to the growing number of technologies and channels available for searching and shopping — the growing volume of information simply leads to data paralysis for many brands. In fact, 40 percent of companies today report they struggle to act on data, with retail being one of the largest industries facing this problem.
Instead of focusing on more data, today’s retail survivors focus on uncovering the right data and putting it to work. With the help of data science, brands can not only uncover trends, but more importantly pinpoint the drivers of those trends to make smarter, faster decisions and empower agility across their organizations.
For Toys"R"Us, these lessons were learned a little too late, but this doesn’t have to be the case for other brands looking to thrive in the evolving industry. For brick-and-mortar retailers, focusing on the customer experience, using tools that set in-store teams up for success, and prioritizing actionable data will ultimately position them to succeed in the competitive market.
Logan Rodriguez is the director of retail at Square Root, a provider of store relationship management software.
Related story: How the Toys"R"Us Story Could Have Ended Differently