The Failings Of Retail

                Everywhere you turn of late, it seems there is another news bulletin about the impending demise of retail. Sure, people are always going to have a need to buy things, but as online behemoths like Amazon are really only just beginning to ramp up their global conquest, shopping as we know it might soon look dramatically different. And I know that a number of brick and mortar institutions are surely going to bite the dust. But as someone with considerable experience in this industry, I can testify that the greatest threat a traditional retailer faces isn’t from some online enemy – it’s from within the store itself.

                Anyone who has ever been involved in this line of work, whether in a management role or not, has surely complained at one point that the organization would be just fine if you could only hire quality help.  And to some degree, yes, this is always true. But from the outside, it seems obvious that the grunts cannot possibly be to blame for a company’s misfortunes. They do not – or at least they should not – exert this kind of pull. Any organization is only as strong or as weak as the people up top. And if that company is on the downswing, then this surely rests at the feet of management or ownership or both.

                Obviously, none of us are without fault. We’ve all been that person at the end of a long day who didn’t feel like retrieving or making something for a customer, and told that shopper we were out of the item. If you’ve screwed around for one unauthorized minute out of a single day, then I suppose a loss prevention expert could technically claim that you were stealing time. But I’m not talking about our common human flaws. What I mean specifically are major blatant categories where upper management and ownership continually fail, as a matter of personal and often company sanctioned philosophy.

Maybe these pitfalls have been around for centuries, from the moment the first businessperson set up shop and traded animal pelts for a couple of dry sticks. But I’m guessing these are mostly modern phenomenon, ones which have gone increasingly problematic for physical retail outlets as internet companies have grown. At any rate, based on my own experiences with the industry, I know that they were issues twenty years ago and continue to be today.

  1. Labor Shenanigans

This is a biggie, albeit one that any layperson could understand at a glance and therefore a problem you would think easily remedied.  Let’s say your entry level position pays x. It is common for a specialist (cake decorator, meat cutter, et cetera) to be paid 1.5x or even 2x. Yet, as the x represents a wage that’s actually below industry standards, your company has trouble hiring entry level help. So guess what happens? The specialists wind up doing the entry level work. And yet those in charge of the purse strings refuse to budge on paying entry level help more.

I’m not saying a cake decorator or meat cutter should never have to wait on the counter. But when, for example, you have your store manager running a cash register for a significant portion of every day, then you know something is probably wrong. Either you’re paying that person too much, or, more likely, you’re not paying the entry level people enough. Now, the slick upper management types with all the answers will claim that this is exactly how they drew up the blueprint, but I don’t buy it, and in fact that rationalization makes no sense. In my years working with these retailers, I’ve witnessed countless operations that would have two specialists on the clock, but no entry level clerks, meaning you’re paying a meat cutter to wait on the counter all day, for example. And this would be a weekly if not daily occurrence! Or worse still, paying a specialist time and a half to wait counter because that person is well over 40 hours.  But then when I point out that, you know, you could bump up the entry level wage a buck or two, and be much more likely to keep your lower rung help around, and you could have three clerks here for what you’re paying one chef to wait counter at time and a half, the answer is generally, “oooh hooo hooo. Noooo. We’re not paying new hires off the street that much.”

Which is itself a contradiction of sorts, payroll budget aside. All day long, in every meeting and every memo, you hear nothing but about how customer service is priority number one. But then at the suggestion that those tasked with serving the customers might be compensated a little more, massive chafing ensues. This doesn’t make sense philosophically, I’ve demonstrated above that it doesn’t make sense financially, and I would argue it doesn’t make sense from a production standpoint, either. You’ve hired a cake decorator to knuckle down and whip up these amazing concoctions, but then she’s constantly interrupted to shave a quarter pound of Virginia ham or dole out a half dozen wings from the hot bar. When your meat cutter is slicing one London broil steak, waiting on a customer, slicing one steak, waiting on a customer, then the quality and quantity of the work are bound to suffer.

This calls to mind the closely related topic of required lunches. I’ve worked with a number of retailers who insisted employees take an unpaid half hour lunch (many have claimed this is a “state law,” but that’s mostly complete nonsense unless you are a minor) because in their minds this is some clever strategy for stretching out the coverage. In my experience, however, all this does is throw a wrench into productivity right in the heart of the day. Forget for a moment the negative impact that this has, forcing a worker who’s in a steady rhythm to abruptly halt and go chill out for 30 minutes. Because these operations are so poorly staffed – again often as a result of having, say, two specialists on the schedule that day at time and a half, rather than one specialist and three clerks – this forced lunch business often means that absolutely nothing is being accomplished in the department for an hour or more, directly in the middle of the action. Let’s say you have two employees in the department around noon on a Saturday, which is a thoroughly likely occurrence, and that there’s a steady stream of activity on the customer front. Forcing these two to disappear for a half hour apiece means that’s a solid hour where nothing is being produced in the back room and nothing is being stocked out on the floor, either. Does this sound like a solid business model?

These skeleton crew staffing schemes also make any officially stated company handbook policies look laughably ridiculous. You know the material I’m talking about, the new hire paperwork which made you, as a freshly hired employee, all warm and fuzzy to note that this corporation really cares about your well-being and that, should you suffer any occurrence of diarrhea or even so much as a runny nose, then they definitely want you to stay home that day! Right. I’ve worked at a major “big box” retailer where my runny nose was dripping nonstop onto the boxes I was stocking, and yet my supervisor was visibly disgusted when I asked to leave a half hour early that day. Also, in five and a half years working with another corporation, I missed just one day, but suffice to say that in the wake of that one day I was basically treated like the scum of the earth. But then you’re expected to readily give up any scheduled days off, and come in on overtime, and this is no big thing - what do you want, a gold medal? – because there’s nobody else working in this place and we have no choice. Not to mention that it’s common practice for upper management to treat employees’ PTO hours like some kind of hilarious game, whereby these are penciled into the schedule, except then, hee hee, they are then crossed out every week, because we don’t have the staffing to permit you to enjoy these, you silly, 48 hour working specialist! But any company worth its salt is allotting for these hours in its yearly budget well in advance, and denying employees is a sure recipe for a disgruntled hence less productive workforce.

2. Misplaced Attitudes

We will be charitable in this section and chalk up much of this behavior to our common human quarks. I would also like to refrain from any mention of “power tripping,” although this is often what management’s collective antics suspiciously resemble. However, whether for that reason or a litany of others, you have to often wonder whether management and ownership hasn’t completely lost sight of what your company – what any company, as far as I know – is hoping to accomplish.

Much as we might like to pretend otherwise, dollars generated is the yardstick by which a retail enterprise is measured. But if transported here from another dimension and tasked with watching the average management figure for a few days, this information would come as a complete surprise to you.  Certainly you would not glean such from the behavior displayed nor the speeches given.

To cite one example, we’ve all surely been present for the occasional fluke day where traffic and thus sales were shockingly, unexpectedly robust. Sometimes this is due to a weather condition (impending snowstorm, power outage, threat of rain) but just as often, nobody can explain it. And for most employees out there on the floor, as cogs grinding away in the machine, these occasions are strangely exhilarating. Though exhausted afterwards and possibly unwilling to admit it throughout, the variety this onslaught provides can prove a serious monotony-buster, and it’s rewarding to see product flying off the shelves as fast as you can throw it out there.

Then an upper management figure drifts upon the scene. With an almost pathological determination, they will more often than not snuff out any joy an employee displays concerning this situation. Attempts to marvel at how strong sales must be today will encounter a swift subject change. Because we are not here to high five over a terrific sales rush, we are here to point out that one hole on the third shelf from the top, second slot over. Do you see that hole? Great, now fill it. I’ll be back in a short while to check on your progress.

Sure, it’s never wise to rest on one’s laurels, but there is no good reason not to enjoy success as it is happening. On a similar note, who hasn’t sat through a dreadful Monday morning meeting, and listened to something along these lines, all recited by your company leader in a nasal, list reciting voice:

Electronics, you were down 1.7 percent over same day last year…shoes, you were up 2.3 percent…housewares, this was actually the strongest day your department has ever had in the ten year history of this company, so good job with that…umm, cosmetics, you were down .6 percent, garden center, you were down 1.2 percent…

Followed then by an endless, droning , 45 minute lecture on how the customer count has been static for about three years now, and you all need to be doing more to increase this figure.

Call me a hopeless renegade but if I’m any department head sitting through this nonsense, I would sincerely wish somehow that we could focus on the one relevant piece of information here, and chuck everything else. Certainly the guy we’ll call Hank, Head Of Housewares wishes a little more attention could be devoted to his historic day. And this doesn’t necessarily entail ticker tape parades or even so much as a gift card, but it should at the very least inspire a round table discussion, right at the top of the agenda, with everyone involved. Those minor ups and down versus last week or last period or last year, are most likely meaningless, particularly if – as is most likely the case – nobody is going to invest any kind of deep data investigation into the numbers, as they will only be numbers on some paperwork for the purposes of fleshing out this meeting (which were in any case probably emailed to and/or printed out for the department managers in advance anyway, none of which stops the chief from reciting them line for line) with what feels like a little substance. And for all the talk about customer counts that I have sat through in my lifetime, we’ve all sat through, there’s been nary an intelligent response delivered really as to what the people working inside the building are supposed to do to lure shoppers into the building. Work your damnedest to retain the current customers, yes, and build basket sizes and sales, absolutely. But outside of wearing a cow costume on the sidewalk, the only serious impact in customer counts is going to come from marketing. That’s their job.

This is the most glaring omission, this theoretical push toward increasing baskets and sales in pursuit of historic days, followed by management’s clinically deranged avoidance of discussing them when they happen. But it’s by no means the only…curious philosophy commonly found on display, far from it in fact. Some of what I am witnessing is a clear attempt to establish who is in charge, as if the employees aren’t already aware. Like the new hire I recently observed, clocked out and headed home, after the store has been closed for the night. He asks the manager on duty if she should follow, and lock the door behind him after he opens it…to which she responds, with a strange edge to her voice, “you don’t open the door! Only management can open the door!”

Okay, great. Should we perhaps contact a brass band as well to commemorate this occasion? They walk to the front door in lockstep, at which point, yes, she is the one twisting the knob. So technically the new hire’s question had been answered, albeit with a little more vehemence than he likely envisioned.  

A more substantial instance of this mindset involved a corporation I was working with, which had just received a memo from the home office concerning how late the stores were keeping people at night. Doors closed at 9, but employees were often not leaving until 10:30 or 11. The reason for this, I ultimately concluded, was that the store management insisted on this giant dog and pony show after closing time, of making everyone stand around and wait while they conducted a walk-through of each department, one at a time. Surely there was a more efficient means for getting people out of there in a brisker fashion, and they knew it. Yes, perhaps a few minor details were caught as a result of this stunt, but mostly it seemed to result in folks, if not goofing off, or hiding, or simply standing around, then maybe polishing windows or sweeping floors for the 18th time to give the appearance of staying busy. The real kicker is that management, often trailed by a mini-entourage of direct subordinates, or other random employees asking questions, would frequently stop to straighten endcaps en route to the next department. But the store was closed!

Employees are not stupid, and generally know when you are screwing with them for the sake of demonstrating control. As one could imagine, workers jumping ship at these establishments was high by industry standards, another plague affecting labor budgets and therefore bottom line. Training new employees costs a great deal of money, in lost productivity, errors, and veteran workers pulled from their regular work to demonstrate procedures. And now that we’re on this topic, when employees do turn in their two weeks’ notices, please take the high road. This is another blight marring retail, on par with the runaway trend of landlords always finding some flimsy pretense for keeping a renter’s deposit: otherwise reputable companies where, the instant someone puts in a notice, tell that person to not bother returning for the remainder of their shifts. If the employee is new or has a track record of poor attendance, okay, I could see that. But when you pull this sour grapes stunt with an established worker who is moving on, all it does is engender bad blood, and set the table for getting hosed yourself down the road. Once the workforce catches on that this is becoming the new standard, guess what, they’ll probably keep their future jobs a secret and simply stop showing up at the last minute.

Of course, erroneous attitudes aren’t limited to store management, or the board of directors or ownership. I remember sitting through a major meeting where one department head was arguing with great passion that we needed to raise our profit margin on the pets section. Reason being? The product was selling too well and they were having problems keeping up with stocking it. Everyone else sort of laughed this off, but I was thinking that were I running this company, this person would have just eliminated any hope of ever being promoted. That one argument was a self-installed ceiling. As always, you have to ask yourself: what are we really trying to accomplish, here?

3. Rule Mongering

I don’t mean this article to read as a total hatchet job against upper management. Certainly, I have worked with my fair share of leaders in the industry who were bright and did tremendous jobs. However, retail corporate culture does tend to encourage and promote creative thinkers a lot less than an average person of decent intelligence who is really good at following rules. This has its plusses and minuses. You probably have fewer concerns with a dutiful policy follower adhering to company standards. However, on the flipside, they tend to not be great at filtering priority and interpreting urgency down to their employees. So what you end up with is a huge focus on rules for the sake of rules.

Some of this behavior might closely resemble that in the previous section, a need to exhibit control. But I really think much of it is really just this, a blind panic for enforcing often unimportant rules. You can read it like an uncontrollable nervous tic upon their faces. I remember one shift worked in a store where, after panicking over an employee calling in sick for a busy department, on a day they were absolutely slammed, management experiences some momentary relief when they find another worker across town who’s willing to drive over after his own shift ends, and help out. At which point this store director rips into him for daring to appear with a hooded sweatshirt on underneath his uniform shirt, because he is cold. Needless to say, that employee never helped out this other location ever again. I even have some firsthand experience in a similar situation myself, a day where, years earlier, I had agreed to pitch in at a distant location…and running into some disgruntled middle management figure there, who was in no way my superior at all, grousing to anyone who’d listen that I was supposed to be wearing a collared shirt.

So while these antics are counterproductive in the sense that they contribute nothing and only serve to irritate employees, still others are far worse by directly maiming the bottom line. The most common example I see is a hysterical adherence to some corporate issued schematic. Though well-intended, and theoretically backed up by plenty of research, there will always be occasions where it makes more sense to deviate – like for example, if you are completely out of a product, and expect to be so for quite some time. If it’s a featured sales item, it might be wise to hang an apologetic sign of some sort, to head customer complaints off at the pass. But leaving holes intact for days on end because you’re waiting for one product and one product only to arrive and plug that leak is idiotic.

I’ve witnessed sets that looked like checkerboards, as they contained nearly as many blanks as filled in spaces, which intentionally remained such for four days because certain products were continually scratched from deliveries.  I’m sorry, but no. Fill those spaces up with something else instead. Even if that only means expanding out on what’s already there, for appearance’s sake alone, this is still a significant improvement. Sometimes you might chalk these gaps up to laziness, but just as often I’ve heard store management, and even higher up zone figures, demand that the holes remain until product arrives. The equivalent to this for online shopping would be for Amazon to decide to leave half of their home page blank because certain hoped for deals never materialized. Would they ever allow this to happen? Of course not. They will use that space to promote something, as would any company with a shred of sanity.

There is a corollary flipside to this phenomenon, too, which usually concerns end caps and other huge displays, in situations where every store was auto-shipped product as part of some major buy-in. The company received a terrific price break for buying mass quantities of something from a particular distributor, and so this line is going to be featured at some hot featured price for x number of days. Usually stores can continue to re-order product for a little while at that price, though not always. At any rate the sale price is running in every location for a fixed time frame, and as this has been advertised, there’s not much anyone can do about that.

But where companies screw up is also dictating that every store must dedicate a certain amount of display space to this item, and leave it in that prominent location until the promotion ends. The problem with this approach, which you should be able to appreciate with the naked eye, is that some locations are going to sell these items at a brisker pace than others.  So what ends up happening is that the higher volume stores must begin reordering the product at regular price at some point to stock these huge displays. Now, you could certainly argue that these locations should instead transfer product from the slower ones, where those items are languishing. Even in the best case scenarios, however, this is never going to happen even half the time. A store that’s just killing it in the heart of Manhattan is unlikely to investigate whether the Birmingham, Alabama outpost can’t give the stuff away, and it might not make any sense logistically to facilitate that transfer even if it did. Instead, in the most extreme examples, these stores are reordering the product at a higher cost than the hot advertised retail, because they’re not permitted to downplay the sale, move the stuff elsewhere, or cut down on its display space. You can put a sunny spin on the situation by calling these items “loss leaders” if you like, or whatever, but the reality is that they are now underwater on these products, a problem compounded in that these are your busier stores.

Not every issue in this category can be laid at the feet of corporate demands, however. Sometimes you just have to chalk it up to a store or zone’s leadership exhibiting a little too much enthusiasm for meaningless or at least non-urgent rules, usually of their own creation. That day where you’re setting your all-time record for sales in the houseware section? Yeah, this might not be the time to start nitpicking about conditions. Or the guy wearing the hoodie, or as you commonly see, pick this as the day where you absolutely must hassle the help about an upcoming health department or weights and measures inspection. We can debate the motivations which lead management to behave this way – and I’ll withhold my opinion for the time being – but whatever the case, one of their primary functions is to pump a team up and generate some excitement for increasing sales, maximizing profits. And yet in the world of brick and mortar retail, you see the opposite occurring almost I would say more often than not. Fist pounding pronouncements which produce the reverse of what was intended, to frequent comical effect.

One of the more amusing examples of this concerns a high volume item which is produced in-store and takes a great deal of time or effort  to crank out. Yet is one which either the store or district manager has decreed must be filled to a certain level at store close, every night, without exception. It might surprise many to hear this, but guess what eventually begins to happen when management is excessively tyrannical about this topic? Employees start making up plenty of the item, during slower moments earlier in the day, but then leaving it in the back room for as long as possible. The last thing they want to do is to put this product out, or to actually sell it. If you’ve demanded that they have ten elaborately decorated Disney princess sheet cakes out on the floor when the lights go off at 9pm, usually under the auspice of “making sure we’re ready to go in the morning,” and it’s 8pm and they have exactly ten in back but none on the floor, then they’re gritting their teeth and hoping the situation holds for the next 59 minutes or so and nobody notices. Under extreme situations of duress, they might even tell an inquiring customer that they are out. Avoiding your wrath has taken priority for them over making a sale. I’ve worked with enough companies where this was happening to know these probably weren’t isolated flukes, and that it’s surely an epidemic all over the place when dealing with ridiculous edicts.

Some unfortunate rule making does result from the exact inverse however – not from a supervisor’s heavy handedness, but rather due to their caving in the face of a whining workforce. This is most applicable to the subject of scheduling, usually when handling the always touchy nights and weekends issues. I can offer for you a firsthand parable about a seafood department where there were three veteran employees who worked well together, and at 40 hours apiece, this broke down to one closer, one opener, and one midshift on Friday, every week. The department manager wanted every Sunday off, in part to coach his son’s football team, and took Wednesdays as his other, for it was the slowest shift. Another guy wanted two days off in a row, leaving only Monday and Tuesday to accommodate this request. The third guy was given every Saturday and Thursday off to fill in the blanks, and for roughly six months, this system worked beautifully. It was a happy, productive, and profitable department.

But what inevitably brought about its downfall, as you can imagine, had nothing to do with business reasons whatsoever and everything to do with employees in other departments demanding that management put a stop to this. Various individuals in, say, the grocery section were bellyaching that it was “unfair” that a couple of these seafood guys got a weekend day off every week, and the same one at that. Obviously these characters couldn’t seriously expect that their nine person crew or whatever would all also be awarded a weekend day off every schedule, as this was an impossible request. Instead of explaining this to them, however, that every department presents a different set of circumstances, and possibly suggest that they transfer to seafood if they didn’t like it, store managers instead told the seafood gang they would have to start randomizing the schedule more.

This is admittedly a much slighter discussion than the one involving night shifts, however, where what has somehow become the default industry model doesn’t make a whole lot of sense.  Somehow, a mindset has seized retail whereby it’s also considered “unfair” to schedule people to work nights. Circling back to the topic of those specialists you have hired to perform a specific function, more often than not, that specific job entails working first thing in the morning, if not hours before the store opens. But to appease the whining masses, many operations have a policy in place that everyone must work one night shift a week. Thus you now have, say, dedicated pastry makers being paid extra to do nothing of the sort at least 20% of the time. Some places even go as far as to demand that departments split up the opening shifts evenly, an even more disastrous policy. One major grocery chain I worked with insisted on this policy, much to the bewilderment of head butchers who were opening one day, closing one night, and pulling three midshifts per week…all the while arguing with an upper management brigade who couldn’t understand why payroll was up and productivity down. Management would be far better served explaining to their entry level employees that the specialists have been hired to perform specific functions, and need to work certain hours to accommodate this.

4. Role Comprehension

But of course, the reason a lot of these rules exist is that management and ownership don’t really know what’s going on inside a department. Grand pronouncements give them a shorthand method for viewing at a glance whether a store is on track – or at least, this is what they like to believe. But this is perhaps one of the most pervasive myths afflicting owners and executives, the notion that they are acutely aware of who does what, and the inner workings of particular programs which make this happen.

I have heard that Steve Jobs’ personal philosophy was that every Apple employee should know how to perform every role. Whether or not this is actually true, I can’t say, but it sounds like a good place to start. This wouldn’t have to require upper management figures brushing up on the finer points of every single program used by their companies, but detailed knowledge of how work flows, through whom, and how long this should take – in other words the rudimentary details of every person’s daily routine – is essential. Yet whether through arrogance, inattention, or a dismissive attitude toward this level of comprehension, I’ve worked with few organizations where anything of this sort transpired. Even those who feel they are paying attention and have a keen awareness of every employee’s productivity often could not tell you how long this task took former workers, or those in similar roles at other stores, and just how effective their own team members are. It reminds me of my favorite ever observation, in response to a company adamantly opposed to letting its office people work remotely.

“But then we wouldn’t know if they were actually doing anything, or just screwing around,” the VP had objected.

“Well, I hate to tell you this,” I replied, “but you’ve had people working here in the office, and you didn’t know if they were doing anything, or just screwing around.”

Which didn’t exactly sit well, though it happened to be true. This company believed it had a firm grip on the productivity of its people. Everyone looked busy enough, so what could possibly be the problem? Well, upon further investigation, among other horrors, they had a pricing coordinator who’d never bothered to learn Excel, was therefore punching in new items and weekly flyer prices by hand rather than uploading files; another pair of employees, asked by the CEO to determine which PLU numbers were being carried in each of the stores (for those not in the know, PLU numbers are found on produce, bulk bins, and other items without a barcode), spent untold days walking around and writing everything down by hand in notebooks instead of taking the time to learn and run a few simple reports; and in general there was a widespread epidemic of department heads calling in or emailing orders rather than scanning items via the relatively new, expensive, and start of the art inventory management software.

Technically speaking, none of these examples count as “screwing around,” although there was plenty of that going on, too. More to the point, however, none of the key figures up top knew any of this was happening. Worse still, when presented with these findings, I’d wager that more than a few didn’t understand what I was talking about, and those that did in general tended to laugh or shrug off the dollars wasted by these antiquated methods: well, these are the employees we’ve got, what can we do? At least they’re working.

But at least these shortcomings, however major, are inefficiencies caused by a lack of executive knowledge. More detrimental and just as common is the aforementioned corporate arrogance, the attitude that they and they alone know what this company needs, how things work, and therefore they require no input from any of the people tasked with actually handling this stuff on a daily basis. Let me clarify that by no means is the purpose of the piece to illustrate that I believe I have all the answers, either. On the contrary, whatever your role with the company, consultant included, you have to fight this very tendency that I’m railing against here.  When a business first brings you aboard, you want to forget everything you think that you know, listen, pay attention, and only then maybe see if anything that you’ve done in the past applies to this particular company. And this is exactly the way management figures should operate, but they rarely do. Nearly all of us – upper management and ownership included - only truly know one or two disciplines in a field really, really well, and would be better served deferring to others’ expertise the remainder of the time. Possibly even in those subjects we know best as well.

It always cracks me up when the same executives who were days or weeks earlier saying they knew who was working diligently and who wasn’t, will throw their hands in the air, if a time comes that they have to replace someone, and cry “well, I didn’t know what this job entailed!” should the transition inevitably prove a little less than smooth. The most memorable example of this I can think of is a company I was working with who decided they were going to fire their controller of over 20 years’ standing, at about 5:30pm on a Friday, to the surprise of virtually everyone else in the company. Surely the board did not enter into this decision lightly and had to have taken their time arriving at it. However, no immediate replacement was instituted, as the bosses casually went about recruiting one. Meanwhile, it wasn’t much more than a week before checks began bouncing left and right, to vendors, utilities, child support agencies, insurance companies, even the owner himself.  It took a month to sort out this mess, up to and including freezes placed on deliveries of goods. Finding a replacement might be one thing, but it was obvious nobody had bothered figuring out what the controller did, exactly, before firing her. They had no idea she was the one making the bank deposits!

These were established bosses committing a major blunder, and admittedly an extreme example. But you see similar gaffes on a regular basis, all stemming from the same basic attitude – and perhaps none is worse than when a new CEO or president is brought aboard, often followed by his inevitable old crony battalion being hired as well, and announcements about complete overhauls. You know the guy I’m talking about, the one who somehow determined in two days that everything you were doing was junk and he was replacing all your existing programs with those he’d been using at his last company. Without, of course, the input of those currently working at the present company and seasoned in dealing with this stuff.

I can think of one great instance of this phenomenon, involving a newly hired director who, along with a handful of “industry guru” types he brought along with him, enacted a series of major changes over a number of months, often launching into these with baffling arrogance and inefficiency. For example deciding on a new primary distributor, shipping a ton of new product to the stores, along with a team of the distributor’s people to hang new price tags as they’d agreed to go with this supplier’s suggested retail on everything…and yet meanwhile, nobody had bothered to tell the stores that this product was arriving, and possibly worse still, nobody in pricing had the first clue that this new retail arrangement was in place! Thousands of shelf tags were on the shelves which did not match what actually rang at the registers. It wasn’t until store employees called pricing to say that the retails were “wrong” in the system that pricing even heard about this policy change. Needless to say, customers were not happy, and these stores continued their downhill slide.

When confronted with examples like these, the management team would typically do the whole bit where they’d hold up their hands like stop signs and whisper, “okay, okay! I didn’t know how these things work!”  But when I would kindly suggest that if this is true, then maybe they shouldn’t go around making such grand pronouncements without involving the people who would have to enact these changes, or that they should possibly even stay out of daily operations entirely, this tended to not go so well.

Sadly, I would say this isn’t an isolated example, but emblematic of the industry as a whole. Obviously there are always going to be some folks who get off on walking around telling people exactly how things are going to be done, whether they know the first thing about the subject or not. But this is just one symptom of a major sickness. In my experience, there’s a huge breakdown in retail between what’s discussed up top and what actually happens at the store level. This is the basic flow chart for significant decisions, enacted way too often for way too many brick and mortar retail operations:

  1. Bigwigs decide on major course of action without consulting any of the departments beneath them (IT, logistics, merchandising, receiving, pricing, et cetera)

  2. Departments are only informed at last minute, or even after the fact

  3. Departments are nonetheless only now asked if:

  4. They would recommend doing it this way and

  5. If they can make their part of this happen pronto
  6. Departments reply that:
  7. No, they would not recommend doing it this way and
  8. No, they are not going to be able to make this happen right this second
  9. Bigwigs counter with:
  10. Accusing them of having negative attitudes, and/or standing in the way of progress
  11. Too bad, drop whatever you’re doing and make this happen right now anyway
  12. Departments nonetheless are the ones taking the fall when things inevitably go haywire

 

Even if nothing this extreme is happening at your particular operation, there are a whole lot of smaller recurring themes which probably are surfacing, and just as surely rot you from within. All stemming from this same basic concept, of folks not really knowing who does what - and not just management, but everyone. It negatively affects you when it comes to unbalanced compensation, for overpaying some and not paying others enough; it negatively affects you in the form of misdirected complaints, when employees  are wasting a bunch of time notifying IT about erroneous clock punches, or people are asking the pricing coordinator to fix the internet, or random office employees are blamed for printers not working at the stores (sadly, yes, these are all real life experiences I have dealt with); it negatively affects you in that the complainers often set the tone for the entire company. You have surely heard the phrase the squeaky wheel gets the grease, and this is why. When upper management has no clue who does what and how things work, if you have five people quietly hitting it out of the park, but then one person constantly going to the bosses with a series of beefs, then his version becomes the accepted truth; it affects you negatively when someone might technically know his job, but not a particular application of it – for example, a wholesale company deciding to open its first ever retail outlets, and leaving the exact same management team, with no experience in the latter, intact to run both legs of the operation. Who then can’t quite wrap their heads around the various problems this creates, for example, reacting with not quite the appropriate urgency retail demands when the internet went down (taking out cash registers and credit card machines, among other functions), and why a three or five or even twenty-four hour wait for IT help is unacceptable, and why the retail arm wanted its own tech team; it negatively affects you when, in a tendency that’s the opposite of but just as common as the much maligned micromanagement, when you have a boss that can’t be bothered with details ahead of time, but then wants to constantly demand changes halfway through a project. All because he doesn’t know how things work and can’t understand why it might be disastrous to decide at the last minute, say, to keep those deli scales from the store you just acquired, maybe, even though they aren’t online and don’t connect with your current stores’ deli scale network of ingredients, nutritional facts, PLU numbers, and prices.

Most of all, it affects you negatively when smooth talkers who can’t back it up with action are promoted to or hired for key positions. A basic knowledge about the entire operation – or at least a willingness to swallow some pride and pick the brains of those below them – has to start at the top of a company, or else the entire enterprise is doomed. I’m always amazed at how far some individuals get in an organization when virtually everyone beneath them has known for years that they do very little. Walking around with a serious expression at all times can take you very far, and perfecting the art of colorful jargon is even better.

Ownership, the board of directors, and whoever else is in charge of making these decisions would be well served to take a hard look and ground themselves in some realism, all the while brushing up on the basic knowledge of who does what and how things work. One company I dealt with recently, it was clear within about five minutes of meeting the guy, had a president with the maturity of a six year old. But wow, he sure could whip up some colorful pie charts, and the dude definitely knew how to spin some serious industry speak.  Ownership had been blown away by these qualities, over a slew of internal candidates and other external ones, many of which surely would have proven a lot less disastrous. One could only conclude that they’d never done any serious research into whether this person knew what he was talking about, mostly because of the gaps in their own knowledge. On a similar note, ask yourself why someone with a boatload of credentials is chomping at the bit to travel halfway across the country to work for your company, particularly if he’s bringing a whole crew of cronies with him. Maybe your tiny operation is going to be the next Amazon, and sure, it’s great to have ambition, but this probably isn’t going to happen. Therefore take a serious look at your business and ask yourself why this would ever realistically happen, if this character is seriously the next Jeff Bezos.

Conclusion

So this is a somewhat concise summary of the problems I see plaguing traditional retail today. Without getting into a political holy war, it’s worth noting that our government is debating this very problem. We currently find ourselves in a climate where an established retail chain like Macy’s has bit the dust, and meanwhile, online juggernaut Amazon has swooped in to purchase Whole Foods. One proposed solution is the elimination of automatic overtime pay for anything over 40 hours a week (the suggested tradeoff, laughable to most hourly employees I know, is that they would be given more PTO hours – which they would definitely, absolutely get to use, with no managerial interference whatsoever!) and yet I don’t think this is any kind of answer at all. The grunts are not the problem. Neither are the internet kings who continue to gobble up larger and larger pieces of the consumer pie. Yes, they are a threat, but for retail to obsess over this challenge and ignore their own failures is akin to wringing your hands over the fact that the sun is someday going to explode, and therefore concluding you no longer need to eat. Unless these enterprises right the ship up top, and get their own houses in order, brick and mortar retail will continue to be a declining industry.

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