Minneapolis Pays for Creating its Own Retail Monster

March 24th, 2017 by Flora Delaney

Minneapolis SkylineI should have known better on a sunny day in Chicago on the Magnificant Mile. I know how retailers do it: they suck you in with air conditioning, new products, a half-off clearance sign and before you know it, you’ve parted with $300. Even as a retail and merchandising expert, it still happens to me. Except in Minneapolis.

It’s hard to believe that City leaders knew what the outcome would be when Bloomington opened the Mall of America on August 11, 1992. At the time, MOA was supposed to have everything a city center should contain: retail, restaurants, an aquarium, a wedding chapel,  Knott’s Camp Snoopy, night clubs (there was even talk of the Jacksons investing in a nightclub – those Jacksons: Janet, Michael, Tito…) Bloomington was looking for a way to offset the draw that the Met Stadium once was and came upon a whale of an idea: Mall of America. A site to see. Easy access from the airport. And 25 years later, it looks like they placed their bets correctly. On any given day the visitors of Mall of America makes it Minnesota’s third largest city.

Which leaves us with the Minneapolis and its *Block E*Nicollet Mall*What are we going to do with Downtown*Now Macys has closed* dilemma.

When a city is planning for a thriving downtown center there are several key foundations that a downtown can count on to keep the center vibrant:

  • Entertainment venues to draw folks in. Your sports team stadiums, theaters, and concert venues. Minneapolis grade? A. Not just because of the new Vikings and Twins stadiums but Guthrie, Cowles and the State/Ordway/Pantages triple threat.
  • Restaurants and bars – even strip clubs – to extend events and keep dollars downtown. Minneapolis grade? B. if you include Uptown and Northeast.
  • Education Centers – get ’em while their young and they may want to stay. Draw in out-of-staters and access to a fresh stream of low-wage workers. Minneapolis grade? A
  • Business Headquarters and a thriving business community. Minneapolis grade? B. Not bad for most midwest cities. But how it let Richfield get Best Buy is still a head scratcher.
  • Retail – it’s what keeps the city alive on Saturdays and Sundays. With the right drawing cards, it can add a tremendous tax base and jobs to a city center. Minneapolis grade? F. Seriously: F.  Here’s why:

The population of Minneapolis is not large enough to support two flagship stores of any retail brand. When Nordstrom, Armani Exchange, Victorinox, BCBGMaxMara and others look at their retail portfolio they know they can only support one store in the Minneapolis area. In Chicago, that’s going to be the Magnificent Mile. In Minneapolis, that will be in the Mall of America or Edina’s Galleria which are the two upscale malls in the Twin Cities. Stores that have tried to make a go of it in our lifeless downtown have struggled. Ralph Lauren Polo tried until July 2007 and Neiman Marcus closed in Gaviidae.

So Minneapolis is stuck with taking the retail left overs: the Nordstrom Rack, Len Druskin, Marshalls and other off-price retailers that fill space but do not get people to come into the city to shop.

There is a way out. But it will require a new way of looking at a retail-Minneapolis alliance. MOA can never be a mecca for LOCAL retail. The rent is too high. But if Minneapolis had the vision, it could create a retail corridor of local, pop-up and experimental locations as a draw.

  • Create a streamlined way for online retailers to create pop-ups
  • Create a revolving location that allows retailers to prototype and test retail concepts with a live customer base
  • Make marquee local retailers the anchors with permanent locations at cut-rate rents
  • Create a business district brand that markets and creates buzz for those who shop local as THE premiere destination in the city.

There are ways to get this done. But as long as the City of Minneapolis continues to allow landlords to guide the “vision” of the downtown shopping district, we will continue to have struggling locations, closed stores and a stream of people headed to Bloomington to shop.

 

    Using Social Media to Listen to Customers

    May 21st, 2015 by Flora Delaney

    iconsFor a small business or retail store, “listening to customers” happens everyday. But as explored in the post “2 Reasons Why Store Managers Don’t Hear Their Customers” it may not be accurate. Truth is, there is real value in giving your customers multiple channels to engage in a dialog with you. With the advent of social media and the instant feedback loop of facebook, twitter, yelp and others it is possible to become aware of an issue and address it quickly in a way that can earn your store or business more respect than ever.

    Some basic rules for engaging with a customer who provides feedback online are:

    • Always respond quickly. Negative and positive feedback should get the same urgent response. When a customer shares something positive, make sure to add a fun and humble response.
    • Thank customers for taking the time to make you aware of something. They didn’t have to and it means they still care if they are willing to try to engage with your brand online.
    • Don’t auto-respond: be brief, honest and respectful. Above all, be professional. Your responses will be online for months if not years into the future. Make sure you can turn off your emotions before responding.
    • Take disputes offline. If your customer is TRULY wrong, contact them privately to work out a compromise.

    In the course of your business day, you may believe you are close enough to your customer to accurately anticipate what they want and need. A business person who believes that they completely understand their customer should ask themselves: if I don’t completely understand my spouse (or child, partner, parent, co-worker), how on earth could I believe that I completely understand all of my customers? Makes you think, right?

      How Small Businesses Can Listen to Customers

      May 18th, 2015 by Flora Delaney

      listeningThere is a wonderful quote that “the plural of anecdote is not data.” Too often retailer and other small business owners get snared into believing that a story or two that rises from the hundreds of customer encounters every day is a full and accurate reflection of customer feedback about their stores or business.

      Net Promoter Scores (see our earlier post: Net Promoter – the Most Common Retail Listening Tool) prevent that but they are just the beginning to really understand the Voice of the Customer. To objectively understand how you are perceived in the marketplace, find out:

      • What do your best customers love about you?
      • What most frustrates your unsatisfied (past) customers?
      • How do your customers think about you differently than your competition?

      For most managers, the only way to uncover these emotionally charged questions is to hire an objective third party to uncover the answers. Focus groups and intercept surveys are the most robust methods – but also expensive. At Delaney Consulting, we administer online surveys and other methods for uncovering honest customer feedback. Because it is human nature to overreact to negatives and under-react to positives, an outside firm like ours can help a management staff accurately gauge the appropriate responses that are required to elicit the kind of customer support everyone wants. Use caution when relying on internal communication to accurately judge customer feedback. Rarely is accurate data unearthed solely through employee feedback of “what customers are saying.”

      Next Post: Using Social Media to Listen to Customers

        Net Promoter – the Most Common Small Business Feedback Tool

        May 14th, 2015 by Flora Delaney

        CHCKLSTOne of the most common retail tools for collecting customer feedback is a “net promoter score.” The concept of net promoter is simple. Customers are asked whether they would recommend the store (or service) to friends and family on a scale of 0-10 . A score of 9-10 is a promoter. A score of 7-8 is neutral. A 6 score or below is a detractor. Subtract the detractor percentage from the promoter percentage and you have a “net” number: the Net Promoter Score.

        Promoters are customers who are enthusiastic about your store or brand and will keep buying from you. These are loyal customers who drive growth over time through their positive “word of mouth” marketing to their network. Neutral customers are currently satisfied but constantly at risk to switch stores or brands. Detractors are unhappy customers who can damage sales and give your store or brand a bad reputation throughout their network.

        A net promoter score is useful for doing more than capturing your customer’s feedback at one point in time. It is especially useful when comparing scores over time or across locations. Savvy retailers look at their net promoter scores during peak hours and non-peak hours to understand the possible degradation in customer service during busy hours. They compare net promoter scores by floor manager to understand which ones direct and lead staff in providing excellent customer service and which do not. Most large retailers, restaurant chains and service providers use net promoter scores.

        Customers are incented to provide a net promoter score by either going to a website or a toll-free phone number for a “less than one minute” survey. In return for participating in the scoring, customers can usually win a gift card or a discount on a future purchase. Customers are typically notified of the survey through register receipt messaging or from store associates directly. There are dozens of Net Promoter providers that can be found online – many integrate seamlessly with the most popular POS platforms.

          2 Reasons Why Store Managers Don’t Hear Their Customers

          May 11th, 2015 by Flora Delaney

          listeningFor the store associate or manager who interacts with customers all day long, the idea of having to listen to their customers seems redundant. After all, listening to customers is what they do for their entire shift. But actively engaging with customers and distilling all of the voices into major themes is difficult. Honestly, most store associates “cannot see the forest for the trees” when it comes to listening to customers.

          There are two reasons that store employees are too biased to be good listeners to their customers:

          Recency: As humans, we are programmed to remember only the most recent things while the past becomes hazy. It is called the recency effect and it means that people tend to recall the most recent information about something above all else. When asked what customers think, we are most likely to only remember the customers of the past week and not remember past interactions well.

          Reinforcement: Another human trait is to remember facts well that reinforce our own beliefs and discount facts that contradict our beliefs. Called the confirmation bias, it causes us to listen and recall information that supports our pre-existing attitudes and beliefs while selectively forgetting the uncomfortable information that challenges us. For example, if a store associate believes that the reason sales are down is because the prices in the store are too high, they are likely to retain all of the comments from customers complaining about the prices and not recall comments about trouble finding parking.

          For those reasons, store managers need to put tools into place that can actively inquire about customer experiences and objectively report the findings.

          Next Post: Net Promoter – the Most Common Retail Listening Tool

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