Toys R Us and Maplin – 2 service based retailers with no reputation for service.
We commented recently on the Toys R Us situation – and now they’re gone, on the same day that Maplin goes. Over 5,000 people out of a job and big questions around ‘how this could happen?’ filling the media.
Here’s the reason: Their service was pretty dreadful, and they did nothing to improve that reputation. That’s it. Toys R Us was like Blockbuster – hoping that people would still want to buy toys in a traditional way but without demonstrating their products, without engagement and without a strong online offering. Maplin was one of those brands that you always wondered how they survived as long as they did. They tried to go a bit ‘gadgety’ but it was too little, too late. It always comes down to service. If your people are brilliant at engaging customers then you have a chance of building loyalty through that engagement, if your people are left to work it out on their own, if the store managers become obsessed with filling shelves and rotas, and if the Area Managers are not coaching their Store Managers to coach their teams, to improve engagement and conversion, then it should be no surprise that you finally succumb to financial Armageddon.
What would we have done to save these brands?
1) Marketing – what were they playing at? Where was the modern tactics to improve footfall? Where was the website development and marketing plan to attack the drift to Amazon?
2) Area Managers and Store Managers – what were they managing? When sales are down what were they doing to drive conversion and offset the challenges they were facing?
3) Customer facing staff – what was the model? How were they approaching customers? Where were the demonstrations? Where were the knowledgeable and fun young people enthusing about toys to make the visit to the store fun, or where were the tech enthusiasts, bringing to life a gadget for your home? What were the plans to develop the staff? Where was that investment?
We guarantee that many more retailers WILL fail if they do not address these fundamentals. The time is NOW to invest in service. When Brexit takes effect the conversion rate of your customer facing staff will not just be important, they will be vital to your success and without a model and a coaching culture you will be fighting a losing battle as costs increase and demand falls.
Hospitality is also struggling against increased rents and fewer of us eating out. They must get that service level right because we’ll be highly discerning in our eating choices and any poor service can kill a restaurant in weeks. Is this understood by the owners and the private equity houses? Why invest in location and not in the people? The face of UK retailing is on the verge of an unstoppable collapse unless the service quality decline is reversed as a matter of urgency.