The Retail Doctor

As the new year begins what should fashion retailers make their priority in the 12 months ahead and what is the best way to deal with customer returns? The Doctor responds.

I was wondering whether you have any retail New Year resolutions to help us grow our retail business in 2007?
This period is important to dust ourselves off after the New Year sales, take a deep breath and commence a review of 2006 and begin the planning for 2007. I generally recommend this period to:
1. The business planning phase
* Go offsite sometime during January/early February for an all-day (or at least half-day) meeting with key members of your team and any advisor/mentor you have. First, create a list of what you think your business did well in 2006 that helped you achieve the success you did. Then create a list of all the things you believe had a negative impact on your results.
Use these working and not-working lists as a starting point, create your 2007 objectives along with the tactics, measurements, and milestones that will enable you to double your sales growth for 2007. Share your goals and objectives with your entire staff so that together you can achieve your vision and strategies.
2. The 'Can I work smarter in 2007' phase.
If you're in retail you probably feel that you don't have enough time to do everything you need to do. If you want to drive your business growth for 2007 you must let go of things that are lower level, don't contribute directly to driving business growth and won't enable you to achieve your goals. These time wasters are thinly disguised as important in your business and actually have the effect of seeming to add value and have the reality of being counter productive. Identify them and let them go is my advice.
3. Improving the overall sales and service delivery of my retail business phase.
Most in-store experiences aren't nearly as good as the retailer thinks they are. We measure service and sales effectiveness consistently for our clients so that consistent alignment occurs between the retail 'promise' and the actual customer experience and this perspective is the beginning of driving your business to achieve greater results. Our data shows that conversion of shopper to customer is approximately one in five. Lifting this to one in four will add considerable incremental dollars to your business and should be a key focus of your 2007 planning.
4. Focus on your people to lift performance phase.
Who in your staff is exceeding, meeting, or falling short of expectations. While the products you sell and how you merchandise them are important to the customer experience, it is your people that will set you apart from your competition. People are the very heart of what it means to be a specialty retailer. You win the game based on your point of difference, brand story, product and people.

These New Year customer returns seem to be increasing? How can we deal with customers returning product?
Have I told you about the Retail Doctor approach to handling returns? We recommend the 'AIM' approach which is simply training your staff to:
Approach all customers before they get to the counter (ideally within 30 seconds of entering the shop). Greet them with a warm smile, a welcome and an offer to take the return from them. In many shops, sales staff ignore customers with refunds, or at the very least just point them to the counter. This generally ends up increasing the amount of returns, and also makes the person with a return feel less important than a person making a purchase.
Interpret why the customer is making a return. Since you are assuming the customer will make an exchange, listen carefully to what they say as you will gain information that will you help your next step be the right one. One important thing you need to know is whether the person returning the product is the original buyer or received the item as a gift.
Manage. Once you have interpreted the customer's reasons and understand their motivation for the return, you can help the customer by suggesting or recommending products that better meet their needs. The customer may object to this and state that they just want a refund. It is worth gently attempting to overcome the objection by stating what you've learned from them. Converting a return to a positive purchase done in a professional manner will save a retailer many dollars in returns and quite possibly convert a new customer to the business. If the customer appears to resist in even the most subtle manner then simply lead them to the counter and handle their return happily and efficiently.