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Retailer2Retailer: Opportunity looks a lot like hard work

Oct. 7/14, 2013; Volume 27/number 12

By Scott Perron

Perron,-Scott
Scott Perron

As I travel around the country developing stores and consulting for many others, I’ve noticed a true separation between the stores that prosper versus the ones that struggle. More often than not, business failure is from a breakdown of sound business practices that lead to disappointment.

Actor Ashton Kutcher recently made a speech at a teen awards show this year where he said, “Opportunity looks a lot like hard work.” No truer words have been spoken when it comes to life and business.

There was a time in our industry where it was much easier to hang your shingle, buy a van, spread out some deck boards, write some business and make a profit. For those of you who remember that far back, it was a more relaxed process during which the advances in product and technology were simpler and more drawn out. Many times I have written about how seemingly slow the industry moved in comparison to other commerce, but those days have surely changed.

You may feel this article is a message of doom and gloom but I assure you, it is the exact opposite. Many I work with speak of the big boxes’ success over the last two decades. Make no mistake, they are here to stay for a long time. If you really think about it, they have helped shape a new type of independent retailer by the need for survival. But this is a good thing.

I ask you to think back to the days when most stores were a disorganized hodgepodge of samples, price tags, 20-ounce level loop installed on the store floor and perhaps owners and salespeople smoking in the showroom. It’s no accident the buying groups, cooperatives, mill-aligned dealers and franchises have made their biggest gains during the same 20 years the big box established their foothold. They created the need for dealers to get better, and that took hard work.

Although there are dozens of items I scrutinize when looking at a business, there are three main areas that rise to the top: personnel, operations and traffic. As a business owner, you know the challenges posed by each of these items; however, so does your competition.

So what it comes down to is who is going to do the work and lead the change. The home centers are hell bent on driving the cost of personnel down as low as possible per body as they staff their departments 35 to 40 hours more per week than you. You can visit these stores between 6 a.m. and 10 p.m. every weekday and until 8 p.m. or 9 p.m. on weekends.

They have also dramatically improved their product displays. Tile has been the one area they’ve greatly upgraded even though they sell out of a warehouse. Every display board not exposed on an open pallet is grouted, framed in and exhibited with visual options such as square, diagonal, staggered, bordered, etc. I cannot tell you how many flooring stores I have visited that do not show product in this way and don’t have updated product installed on their showroom floors.

When it comes to traffic, Big Boxes have an edge because of size and economies of scale, but this is not insurmountable. Each retailer has the ability to build his business in retail the way any flooring distributor builds his: going out and getting it. You have a resource the big box does not have: well trained, incentivized sales professionals.