A Monday Morning Memo from The Wizard of Ads
“It’s amazing how when a customer feels good in a store,
they want to spend money there.”
“We didn’t put a lot of money into remodeling stores…”
John Sipala, Explaining why his chain of ninety JAMESWAY stores failed.
In a study of 866 retail outlets which have filed Chapter 11 bankruptcy since December, 1992, some commonalities have emerged which may surprise you.
One of the commonalities discovered among nearly all of the bankrupt firms was, “Simple esthetic problems. Stores were ignored, left with a dated feeling that was only deepened by poor lighting, unattractive floor designs and piped-in elevator music.”
Nor did customer service enhance the shopping experience. Speaking of one store in particular, shopper Robin Vogt seemed to sum up another trait common among the bankrupt, “It was always a hassle there. There was never anyone at the cash register. No one was helpful.”
Guess who is considered the best among retailers in the above two categories? (Atmosphere and Customer Service.) Would it surprise you to learn it’s a company that is wildly profitable? Would it surprise you to learn they have grown to more than 2000 locations in barely three decades? You guessed it. Wal-Mart gets top honors.
Shopper Maryann Dickman offered her eulogyof Jamesway, a bankrupt regional chain, while leaning against a shopping cart surrounded by bright orange Going Out of Business signs, “I liked it here once, but everything’s changed. There’s no selection. They haven’t kept it up at all, and the quality isn’t good. Wal-Mart is a half hour away and this store (Jamesway) is just five minutes from my house, but I would rather go to Wal-Mart. I just like it. Even my husband finds it better.”
Remember what I’ve said about humans tending to make decisions emotionally, then searching for the logic to justify intellectually what they have already decided? Maryann Dickman drives thirty minutes to get to Wal-Mart because “I just like it.” Wal-Mart is cleaner, brighter, and more cheerful than Jamesway, consequently Maryann Dickman “feels” that she’s getting higher quality and better prices. A little bad atmosphere can undo a whole lot of good. Think about it.
Roy H. Williams
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