Framptonia 2.0

Lighting industry observations:

• Lighting trends evolve slower than other fashion categories, namely clothing and personal accessories
• Distributors are not able to properly absorb the amount and frequency of new product introductions
• The European model of fewer, yet more important markets, is very effective
• The largest lighting show in the world is Euroluce
  • Held in the fashion capitol of the word, Milan, Italy
  • Biennial market strategy in synch with the lighting fashion trend cycle
  • Extremely important and well attended market with a broad audience from all corners of the globe

Moving to an annual market strategy would have the following benefits:

• One significantly important, longer running, must attend, Dallas show instead of two diluted shows
• Significant cost and time savings for manufactures, reps and showrooms
• The ability to incorporate other significant collaborative industry events, like the Annual ALA convention, to improve the overall value of the time and experience for all

Are you a Coke or Pepsi drinker? Do you shop at Target or Wal-Mart? Do you eat at McDonalds or Starbucks? Do you realize how much money companies like these spend on advertising?

Many of the products you purchase give you predictable results. The Whopper tastes the same every time.  Why are you funding an activity that is giving you little to no value? Each time you buy that Coke Zero, a portion of your hard earned money goes toward promoting it to you and the rest of the world. The problem is, you already know everything about and continue to purchase it regardless of how many times you see an advertisement.

I expect a common response to my message will be that these companies need to reach new markets to grow. The more they grow, the more products they will design for you. This is true to an extent. The reality is, however, that many of us buy products for reasons beyond the function of the products themselves: ego, laziness, warm fuzzy feelings, etc. We buy products because they are advertised, but we shouldn’t. We give far too much creed and power to advertisements.  We should buy products because they are good products.  Why do you order Heineken when Coors or PBR is what you really want? (I have noticed an emergence of PBR in bars.) It’s not always just because you think it tastes better; be honest with yourself.

The social media revolution is forcing businesses to think differently about how they reach consumers. When will consumers think differently about the products they purchase?

In many ways, consumers have been doing this for years as private labeled products have emerged.  Are you buying private labeled products? Are they as good as the real thing? When was the last time you demanded a private labeled soda at lunch or ordered PBR?  Let’s be honest, some aren’t as good, but many are actually better.

Zappos comes to mind as I write this. They spend more money on service than advertising.  Their service level is what put them on the map and will continue to allow this company to dominate the market. Not their advertising. What’s more important to you?  Are you really interested in advertising reminding you that Zappos exists or do you order from Zappos because you know that you will receive your shoes the day after they are ordered?

Am I suggesting that companies quit advertising? No, companies should continue to advertise while simultaneously evaluating who their target audience is, how they are going to effectively reach that target audience and the message they want their audience to hear. I am suggesting as a consumer that you think about how you spend your money and reward those companies that focus more on quality and service than advertising campaigns.

There are three game changers that have made life extremely difficult for traditional brick and mortar retailers.

1. The recent economic crisis
2. Technology and communication evolving faster than ever
3. The Internet and millennial customer shopping behavior

As a business owner it’s hard to deal with one major game changer at a time, let alone three.  I have traveled a fair amount over the last several years and have visited hundreds of retailers.  Because of my travels and conversations with several retail business owners, I have had the advantage and education of observing what is and is not working as the traditional brick and mortar retailer deals with these three major challenges.

The most important trait I have seen in those that are successfully navigating the new business world is an unemotional acceptance that the above three challenges are reality.  Number one isn’t going to change anytime soon, number two and three will only continue to change.  It is absolutely critical that a business owner identifies and becomes comfortable with reality.  It may sound elementary, but it’s clearly a mental hurdle for small business owners.  Just think about how many retail businesses have folded in the last five years.

Retailers who understand that the economy is years away from returning to the “glory days” have reduced staff while expanding advertising and technology budgets.  Their competitors, on the other hand, are holding on to the “glory days” staff, waiting for the economy to return to historical peaks and reducing ad and tech expenditures.  Who do you think is gaining market share?

Technological advances are coming faster than ever.  A year ago nobody had an iPad. In 2011, Apple estimates they will sell upwards of 50 million units. Ten years ago, and even more recently, small business owners had to invest hundreds of dollars for productivity software (word processing, spreadsheet management, presentation creation). Today, Google offers free basic productivity software including cloud based storage space.  In the retail world, it’s fatal not to be up to speed on the latest and greatest technology.

Consumers, especially millennials (those born in the late 70s and later), have never been more educated and savvy shoppers. It’s not uncommon for a millienial to know more about the product they are interested in than the salesperson they are purchasing it from; a scary and backwards situation.  The new consumer is armed with smart phones that can price check an item in seconds.

Many retailers are afraid of the millennial and/or savvy shopper that enters their store while not recognizing and considering the fact there is someone in their store for a reason.  Humans will always want to touch and feel products before they purchase.  Humans have and always will want personal contact.  Although the savvy shopper could easily make the same purchase online, she has decided to come into the store because she desires personal contact with the product she is purchasing and the person from whom she is buying.

The question becomes, how does the retailer convert the savvy shopper into a customer and not loose him or her to the internet? Consider the following story. A consumer walks into a store and browses for product. They come across the perfect product. They touch, feel and like it. To the shop owner’s horror, the consumer writes product notes on her iPhone and even takes a picture. This person will, for sure, shop online. What’s a retailer to do?

The retailer should attack this situation from 4 different angles.

1. Only carry models of brands in their store that cannot be purchased online for significantly lower prices
2. Employ knowledgeable sales people, not order takers
3. Carry a decent inventory of the products sold/displayed
4. Address the millenial shopper directly and confidently

Businesses need to generate profit. It’s counter productive to carry products in a store when the same products can be purchased significantly cheaper online.  A retailer does want to carry brands that are sold online because many times, the savvy shopper has looked online before entering your store.  Brands that are sold online have credibility and drive traffic into retail businesses.  The savvy shopper may question a brand that cannot be purchased online.

It’s imperative that a retailer employs knowledgeable sales people. Used car salesmen have given the salesperson a bad rap. The salesperson of today and the future knows their product inside and out and will do whatever it takes to help educate the consumer. The short-term goal when the next customer walks through the doors is to solve her problem and give her an education.  Half the reason a consumer enters a store is to get more information about products.

Good sales people approach the consumer by asking such questions as “what brought you into my store today?” or “can I show you this cool new product?”  Good sales people don’t ask the dreaded retail question, “how can I help you?”  The key is to generate conversation and get as much information from the consumer as possible. The last thing a good salesperson does is ask a question that could end the conversation.

Inventory. Don’t buy too much, don’t buy too little. In today’s economy, some retailers choose to cut inventory to the bone, or even zero – the kiss of death. If the consumer is in a store, she has been educated and is now interested in a product.  There is nothing better to say than, “I have the product for you right now.”  The customer not only gets free shipping, but instant gratification.  This is the brick and mortar retailers clear advantage over the internet, the ability to provide a product that the customer takes home, that day, no shipping required.

Finally, the only way to drastically reduce the chances of losing a sale is to directly address the consumer that is believed to leave the store and shop online.  For example, a statement that goes a long way is,  “I can tell you are an educated consumer, and that you are likely to shop for this online.”  Assuming that rule #1 is being followed (retailer is not selling product that can be bought for significantly less online), offer to take the customer to a computer or iPad and help her shop for the item she wants to purchase.  Nine times out of ten, the customer prefers to take the item immediately and feels more comfortable knowing that she has a real person to talk with in the future, should there be any problems with the product.

This is all only a piece of the puzzle, and assumes that a retailer has customers walking into its stores. The rules for getting customers into a retail business is another post for another day.

Let me know what you think.

1. Ability to evaluate new ideas without bias.
2. Understanding the need to evaluate the person and/or business as a whole and having the ability to distinguish between good and bad characteristics. Using the good to your advantage while being cautious of the bad.
3. A high mistake pain tolerance.
4. Delegation of jobs other people can do much better, to other people.
5. Being an advice monger and understanding that half of the advice given may be counter to your goals, but the other half is very helpful.
6. An acute sense of what drives the sale and expense.
7. Ability to solve a variety of problems quickly.
8. The mentality that, “the buck stops here.”
9. Resolve.
10. Aggressiveness.