The Newest Power Retailer?

What is a power retailer? Well, some might say this retailer redefines service delivery. Others believe this retailer successfully changes the customer experience.

Meanwhile, some describe this powerhouse as having the ability to constantly crush the competition. And still others say this retailer produces predictable financial results. In my opinion, a true power retailer successfully combines all of these attributes.

While attending the A.G. Edwards Retailing 2007 conference in Miami this week, I got to meet the leader of one of these self-proclaimed retail powerhouses. Who was it? Interestingly, it was Vernon Hill, chairman and president of Cherry Hill, N.J.-based Commerce Bancorp Inc.

I know what you are thinking: A bank is not a retailer. Believe me, I was just as dubious when I listened to Hill describe Commerce Bank as a powerhouse retail brand. After listening to his presentation however, I changed my mind.

Straight-shooter Hill explained how he has created “a growth company in a no-growth business” by modeling his format around those of successful retailers.

“These companies attract loyal shoppers by providing a superior customer experience, not low prices,” he said at the conference. “We followed the same approach. It turns out our core customers are interested in the best experience, not the best rate.”

In fact, Commerce Bank’s entire business strategy keeps its “shopper” top of mind. Targeting the time-starved consumer, Commerce Bank is open seven days a week, and shoppers can bank until 8 p.m. in some locations. The bank offers self-service technology like a coin-counting kiosk (free to customers and non-customers alike), and online banking. And in keeping with its consumer-centric strategy, “in-store” associates cater to shoppers with children by handing out crayons, coloring books, toy banks and lollypops.

Surely, some readers are still questioning how they can twist this model into their own retail operation. Here’s how: Dig into Hill’s core philosophy and build a brand based on the customer’s needs.

“Creating memorable experiences, tapping emotions and delivering on your business promise is what creates fans and builds legendary brands,” he said.

If you are still not convinced, consider this: Hill opened his first location in 1973. By focusing on this retail-inspired business model, he had 30 “stores” in 1990. Today, the fast-growing business has 440 stores across metropolitan markets, including New York, Philadelphia and Washington D.C., and Southeast Florida, and has more than $45 billion in assets. (This unorthodox chain is also on target to have 900 locations by 2011.)

While I am not a Commerce Bank disciple, Hill’s animated presentation certainly got my juices flowing. What if more retailers took a lesson from Hill?

To me, the worst-case scenario is they would create a brand that fills a void and creates satisfied, loyal customers. More specifically, “a unique, consistent experience is what pushes these shoppers to become fans. And it takes a fan to positively sell your story,” Hill said. Who can argue with that logic?

— Deena M. Amato-McCoy

Drexler: Retail Needs Inspiration

Retail’s golden boy—Millard (Mickey) Drexler—was the man of the hour at the 2007 National Retail Federation (NRF) convention in New York City. The NRF honored the chief executive of J. Crew Group with its highest accolade, the Gold Medal, for his contributions to retailing. In his remarks upon receiving the award, Drexler was characteristically blunt.

“American fashion is not doing what we need to do,” he said. “Our industry doesn’t inspire customers today.”

As Drexler sees it, the industry suffers from a lack of creativity.

“Retailers are not thinking creatively,” he said. “If anyone doesn’t think the world is based on innovation, they are wrong.”

The man who grew Gap Inc. from a $400 million a year company to a $14 billion behemoth and then went on to turn around J. Crew and execute one of the most successful retail IPOs in recent years, said his early years in retailing were fundamental to his later success.

“I spent most of my time early on doing the most important thing: dealing with the customer,” Drexler explained. “What I learned was that consumers will buy everything that looks good. And it’s still that way.”

Drexler did not speak very long. And he didn’t offer any balm to retailers, or speak to the greater glory of his profession. Instead, in almost chastising terms, he encouraged retailers not to be afraid to make mistakes and try new things. The most successful companies, Drexler said, are those that continuously innovate. He suggested that one way to do that was to create an environment that supports creative people and allows new talent to come to the surface.

“We have a responsibility to encourage them and let them develop,” he said. “We have to give young people an opportunity to make a big difference.”

— Marianne Wilson

Sex or The Cell Phone?

Who would choose answering a cell phone over sex? Try 20% of hot-blooded young adults (ages 12-34), who admitted they would stop “making out” to answer their cell phones.

That was just one of the riveting statistics I learned during a conversation with Roman Tsunder, CEO, and Lon Otremba, president, of ACCESS 360 Media. Additionally, they said recent surveys of young adults also indicated:

- 78% have their cell phones on at least 16 hours a day;

- 80% sleep with their phones;

- 40% would return home to get a forgotten phone, but not a forgotten wallet;

- Almost 50% said the cell phone a person has says as much about that person as the car he or she drives.

Certainly makes the argument for mobile marketing and text messaging a no-brainer for retailers wanting to reach this demographic. With a daughter in high school and a son in college, I routinely witness at least four of those statistics … but that first one is still hard to believe.

However, the point of ACCESS 360 Media is to catch teens in opportune moments, say when they are in store, and not in moments when they are otherwise preoccupied. ACCESS 360 is a media network that connects retailers with more than 30 million consumers, ages 12 to 34, via in-store, mobile and online communications.

— Connie Genry

On-Line, In-Store Mix-Up

In the midst of pre-holiday hoopla, it dawned on my friend Sabrina that she completely forgot to buy holiday cards. The revelation came at about 11:30 p.m. on Sunday, Dec. 17. It was late and she was tired.

But she wasn’t about to settle for some basic holiday cards left on on Hallmark tables. She still intended to be creative, and the last thing she wanted was her greeting cards to look like a last-minute put-together.

So what did she do?

She grabbed her camera. After some quick snapshots of quirky poses with friends, she uploaded the images online at a popular drug store within minutes. She selected her own background banner and instead of waiting weeks to have personalized greetings cards made and processed, her order was to be ready the very next morning.

Sabrina received an e-mail from the store around noon the next day saying her cards were ready for pick-up. It was just too easy, she told me. The drug store saved her last-minute-card crunch.

Or so she thought.

Still excited, she stopped at the store to pick up her on-line purchase. But to her disappointment, the store couldn’t find her order. Sabrina was given a pile of leftover pictures to sift through to see if her order had been misplaced. The staffers told her some of those photos had been there since May.

Sabrina became very frustrated and was told to come back the next day. She told the employee that she specifically chose to use the company to save time and aggravation; now this delay would push her back even more. She left.

The next day she received a phone call from the store saying they had found her order. However, after the employee described her silly and quirky holiday picture, Sabrina felt completely embarrassed.

What should have been such a smooth on-line to in-store experience turned utterly daunting.

“It just could have been so easy,” Sabrina said.

Although the turnaround was still pretty fast for last-minute personalized cards, I’m sure next time she’ll allot a few extra days for an expected next-day pick-up. Retailers, however, should be made aware of and fix these on-line and in-store miscommunications fast. If a business promises a hassle-free multichannel experience, it needs to keep its word.

— Samantha Murphy