Last week we blogged about “The Two Tides of Retail Pricing,” and this spurred a number of conversations in Parker Avery’s social media circles. I had an interesting retail pricing incident just yesterday which really brought home the importance of what I’m coining “SLE” or Store Level Execution. (Sorry, Salem Oregon airport – you’ll have to share that 3-letter combination.)
With summer suddenly upon us, the kids need plenty of things to keep them occupied, happy and cool, so when I found out the much anticipated LEGO Movie just came out on Blu-Ray, I headed right to my (somewhat) trusted big box retailer. Although with RedBox kiosks everywhere and the ability to stream movies for fairly cheap, I knew I’d have to weigh the value of purchasing the move vs. how many times the kids would drive me crazy asking to rent it again. It was pretty popular in the movie theaters earlier this year, so I figured I’d bite the bullet and buy the Blu-Ray outright. Upon arriving at the LEGO Movie display at my big box retailer, I discovered the move would set me back $24.99. Ouch. For a kids movie? Really? Still weighing the value of continuous rental demands from the kids vs. a one-time outlay, I decided to check some online prices.
Yes. I am a show-roomer. Even for a $24.99 purchase. I stalked all of the usual online suspects: Amazon, eBay, Barnes & Noble, etc. but all of those options would cost more because of shipping or even higher prices. I decided to test one of the popular price-matching policies many retailers have been touting, and I discovered that their online price ($17.99) was considerably less than what the shelf tag said ($24.99). I thought for certain they’d match their own online prices in the store. I was wrong.
Upon asking a manager, I was told that the retailer did not match their own online pricing (so much for best practices). I was given no explanation for this, she simply said “That’s just our policy.” Ummm…ok. So, trying to be savvy, I decided to test out their “ship-to-store” capabilities (again, I was standing in the store in front of the LEGO Movie display, which had plenty of stock). I began my transaction, (which initially promised I could pick up the movie “as soon as today”) but when I reviewed the actual “Pickup As Soon As” options, I discovered I’d have to wait until July 1 to pick up the LEGO Movie that was staring at me from the retailer’s store shelves.
Now emotionally committed to purchasing the movie, I cancelled the ship-to-store order and reluctantly picked up the (now perceivably over-priced) item to purchase it, walked to the checkout, and – low and behold the price was – you guessed it, different…not as low as the online price, but within $1. So yes, I was frustrated, but at least a bit more content that I got a better price than I thought I would – plus the instant-gratification of taking the movie home immediately. Now, what that says to me is that pricing policies as well as store-level execution (i.e., price labels, sales associate scripting) all must be aligned to support pricing strategies. In my little example, this was clearly not the case. Multiply this times how many items are available both on line and in the store, THEN take that number and multiply by the number of customers who simply wouldn’t have purchased the item and sought a better deal elsewhere. I would imagine that equates to a pretty large number of lost sales. Lost sales that can be prevented if the proper SLE (remember, that’s “Store Level Execution”) is in place with respect to signage, price labeling and new item price checks (i.e., ensuring that new items ring up correctly).
SLE also has a lot of relevancy on inventory accuracy – a topic about which Parker Avery recently published (please read “Inventory Accuracy: Fundamental Strategies for Getting It Right”), which has a direct impact on customer satisfaction as well. Proper execution of ALL inventory movements at the store level is critical to enable accuracy, yet it’s so often not done well. SLE also impacts customer service – especially in larger chains where customers expect the same customer experience regardless of the store they visit.
Proper staff training and ongoing communications can greatly improve SLE. Not just training on the basics of how to execute a task, but also the downstream impacts of NOT doing that task correctly. In my example, the store manager with whom I spoke should have been prepared with a much better script than “That’s just our policy.” She should have been prepared and empowered to make me content with my purchase and with that retailer, not frustrated. I left the store again not convinced this retailer has my best interests in mind, and I will most certainly think twice about shopping with them. Now multiply this scenario by how many customers come through a retailer’s door every day, and you get an understanding of the criticality of well-planned, trained and properly managed Store Level Execution.
Everything is awesome.