R.I.P. Circuit City 1949-2009

Posted by Michael Reagan

on Friday, January 16, 2009

We'll look back on today and remember when a retailing giant fell to it's knees. It was announced today that Circuit City would cease operations and hand over control of it's stores to liquidators. 567 stores will be closed by March 31st 2009 and over 34,000 Circuit City associates will be left jobless.

It doesn't really matter anymore how they got themselves into this predicament. It's over now. I have to say that I know exactly what these associates are going through. I was laid off from a retailing company 3 years ago after going through a liquidation sale.

If you have never been through a liquidation sale consider yourself lucky. The liquidation company sends a representative whose sole purpose is to make as much money in the least amount of time as possible. The liquidation company essentially owns the assets of the company as they purchased it for roughly pennies on the dollar. The liquidator goes through the building placing integrity seals on all the fire doors and dock doors to make sure employees are not stealing anything from the store. During these times store shrink can skyrocket from disgruntled employees. They will usually conduct a store inventory of all assets and thus begin the liquidation of the building.

Sometimes you get a good person in charge of the liquidation who understands what the associates are going through. Employees are in shock and disbelief as their world is being turned upside down. At other times, you can get someone who simply doesn't care. They are there to do a job and be done with it, and the associates. When I worked for Media Play several years ago and we began liquidation, my staff and I did something our liquidator said he has never seen before. "We Went Down With The Ship, With Class" We continued to operate the store as best we could under the circumstances. However the longer a liquidation sale progresses, the harder it becomes to go on. A liquidator once said to me, "As The Discounts Go Up, The I.Q.'s Of The Customers Go Down." He was 100% right. Many a times we would get patrons screaming at us because we couldn't accept their returns on merchandise or we were trying to rip them off. One lovely exchange had a woman screaming at a poor 16 year old cashier of mine that couldn't accept her return. I tried to reason with the guest as she screamed at us to return her $19 DVD as if her very life depended on it. Finally, the liquidator came over and instructed her to leave. The last thing she said as she walked out of the door I will never forget. "I'm Glad You're All Losing Your Jobs!" I wonder as I type this if she has been effected by the economic downturn. I hope she never knows what it's like to lose something you worked so hard to build.

My favorite memory of my stores liquidation was when we were given a replacement liquidation supervisor because our supervisor fell ill and was hospitalized. We were counting a deposit and discovered through some system error that we were $400 over in cash for the day. This man created a dragnet in the store. He was convinced that a cashier had planned on stealing the money and they were staging it. I explained that the registers were acting horribly since we began liquidation because of the crazy discounts. He told me it was better to be $400 short in cash than $400 over! To this day, I still try to work the logic through on that one.

So I will end this post today by saying my heart goes out to the 34,000 Circuit City associates. I actually interviewed with them for a position 3 years ago. I wound up declining the job offer when they wanted to pay me $10,000 less a year than what I was currently making, and work a minimum of 50 hours per week. Today, I'm relieved I turned the position down or I would be repeating history today. Rest in Peace Circuit City, I used to enjoy shopping in your stores years ago before you began all of the cutbacks in service and other areas. I can't say your a complete victim of a bad economy, but you made yourself very sick before things started getting bad. At that point, there was no hope left.

I for one will not be picking over your cadaver. I deplore liquidation sales. I would rather remember you in a happier time and not on your deathbed.

Keep Moving Forward!

5 Things You Can Do Right Now To Improve Your Business!

Posted by Michael Reagan

on Saturday, January 10, 2009

In my consulting company, we are often asked how firms can get immediate results in helping their retail operations or stores. The answer is there is no immediate quick-fix. However, there are things you can do to instill behaviors in your organization now that can begin to pay off almost immediately!

#1 – Position To Notice
Are you in a Position To Notice? What this means is are you there to help your customer? Many times managers and supervisors tend to work behind the scenes instead of being on the floor or in the trenches helping their team members. How fast can you be in front of a disgruntled customer? If it’s more than 1 minute, you’ve already lost the battle.

#2 – How Clean Is Your Location?
Walt Disney was instrumental in making sure that no one has to walk more than 20 paces to a trash can. You may think your customers don’t notice the burned out lights, the peeling paint or the dirty floors but you’re wrong. Too many times employees get used to their surroundings and tend to ignore the obvious. You should have a visual inspection of your location each day as if you were a customer. If it’s broken, burned-out, or dirty, FIX-IT!

#3 – Greeting and Open Ended Questions
How do you, or your associates welcome your customers? Is it “Hey” or “Welcome! What Can I Do For You Today!?” Don’t ask “How Are You Doing?” That is a close-ended question that results in a one word response from your customer usually using the word “Fine”. This is the same with the oldie ‘Can I Help You Find Something?”. That one usually results in “No, Just Looking”. Re-phrase it to what the customer or guest is looking at. For example, they are in a toaster aisle. The associate would phrase the greeting/statement to “This toaster will toast everything from bagels to bread. Let me show you!” This is an open-ended statement that makes the customer interact. You can then assess their needs and begin a friendly interaction.

#4 – Add-On!
Many times we sell just the one item and we don’t offer additional items to compliment the purchase. When a customer is making a purchase, what else can you suggest as an add-on? If a customer isn’t offered a suggestion they will purchase one item over 90% of the time. However if a suggestion is made, that percentage decreases to less than 30%! Think of the additional revenue!

#5 – What You Sell Has Value!
With the current economic conditions, many times we think we need to mark everything down to try to sell it. This results in eroded margins and less money coming in. There’s nothing wrong with offering occasional promotions, but don’t get sucked into marking everything down all the time. You begin to run the risk of de-valuing your products! If your widget is worth $29 then stand behind it and sell the value of it! If you mark it down to $19 then it may begin to be perceived as cheap and not of value!
While these are not the end all, be all to every business. You will be surprised how you can instill these behaviors into your location and begin to see almost immediate results!

For additional assistance in your business contact me directly! I have over 20 years of out-of-the-box retail thinking to make your business flourish!

Keep Moving Forward!

The Next Format?

Posted by Michael Reagan

on Sunday, January 4, 2009

At this weeks consumer electronics show Toshiba will introduce a new way to own movies. On SD Memory cards. Now if you read some of the blogosphere, many are laughably writing this off. I say don't laugh so fast. If you having been reading the writing on the wall, we are moving to a solid state future. Take a look at the current netbook craze. The majority of these mini PCs are powered by solid-state hard drives. What this means is no moving parts. In fact, if you look ahead, in roughly five years or less the hard drive in PC's as we know today will cease to exist. The fact that there will no longer be a need for moving parts in a PC or other devices will mean longer life and possibly more secure ways to store data. However, for the time being, the largest SSD-HD can only hold up to 512GB of data. The cost is also still prohibitive.

However, storing movies on SD cards can offer a new way to own and collect films. Remember our huge VHS collections of the 80's and 90's? The amount of shelf space needed was staggering. Then in the late 90's DVD came on board and cut that storage space in half. That's nothing to speak of the improvement in picture quality. In the past few years, downloading movies from the likes of iTunes and what-not have become mildly popular. I have always been a huge proponent of disc media simply due to the fact of having a hard copy in case of hard drive failure. Putting films on SD cards though gives you a way to not only have huge collection, but have a back-up as well.

Toshiba through a partnership with NCR, is creating download kiosks that will enable you to purchase films that can be written to yours, or a purchased card in moments. Imagine, for the first time we could have access to thousands of movies and programs that the studios would have otherwise not released on DVD due to the fact that it wouldn't be cost effective to print and replicate so many DVD's.

We would also be able to enjoy films in high-definition as well. SD slots which are already being placed into many HDTV's could act as a way to play them. Even if we had to purchase a separate player, they would be very small and inexpensive as well.

So while the jury is still out, I for one would welcome this new format and look forward to seeing what it's potential can be.

Keep Moving Forward!

Not Your Average Phone Company, Just Worse.

Posted by Michael Reagan

on Thursday, January 1, 2009

Back in the summer of 2007, I wanted to add a second line in my home for my business. I first contacted my local phone company Qwest. I found that it was going to be more than what I really wanted to pay for a secondary line. So I checked into Vonage. Vonage is the broadband phone company that advertises low phone service for only $24.95 a month.

I decided to try it out and signed up. After all at only $24.95, it was less expensive than Qwest. However, I soon realized this was not going to be the case. Once you get signed up for Vonage, you still are charged all the taxes you basically get charged on your home line. So what was $24.95 became almost $32.00! This on top of service that wasn't very great. It wasn't horrible by any means, but it wasn't great either.

After subscribing for 18 months I then decided it wasn't worth continuing the service anymore. I went to the Vonage site to cancel service and that was an exercise in futility. You see, Vonage wants to make it as difficult as they can for you to cancel service. This was strike one. If a company is so proud of it's products and services, you don't have to hide how to cancel your service.

So after finally finding the number to call to disconnect, I was routed to one of my favorite places to talk with a customer service agent, INDIA! After getting the agent who I must say was friendly, I described my situation to her and that I wished to cancel. She at first attempted to try to persuade me to stay with offering a lower priced service package which I declined. At this point, she said she was sorry and would disconnect my service.

She further informed me that I would be charged a disconnect fee of $39.99. I was a bit taken back and said "Excuse Me?" She said this was standard procedure because I did not remain with Vonage for two years. I thought this was ridiculous and stated so. She said there was nothing that she could do and it was in the terms of service buried in legal speak. I became a bit enraged that for her simply clicking a mouse and disconnecting my service, I would be charged $40! At this point I wanted this conversation over. The agent though didn't understand my frustration and continued on about how great Vonage is and the many new things they have planned. I finally had to raise my voice and tell her that no matter what she says I am no longer interested in ever being a Vonage customer again. Why does a company create a policy that it knows will upset it's customers? I would be very curious to know what Vonage's re-subscribe rate is from cancelled service. I'm sure not very high.

So I ask, does Vonage have that many disconnects that it has to charge $40 an account to terminate service? I learned a valuable lesson that day. Don't spend $10 to save $1.

If I ever find that I need an additional phone line again, I will just call my local phone company. It will be easier and probably cheaper.

Keep Moving Forward!