Fade to Black

I am watching the retail auto industry with great fascination. It reminds me of the title of a book by Kurt Vonnegut: “Slaughter House Five: A Duty Dance with Death.” Based on what I saw happen last year and again this year, the US automakers are dancing as fast as they can.

The current “death dance” began in earnest the summer of 2005 when the Big Three all launched marketing campaigns pushing price discounts to drive sales. The “Employee Discount” program launched by General Motors was quickly followed with similar programs launched by Ford and Chrysler. The Big Three spent millions of dollars advertising their discount programs and unit sales increased dramatically. By the end of the summer all three companies succeeded in their goal to increase the number of units sold. They all set new volume records.

By the end of the year all three companies were in deep financial trouble and the business news stories were full of “bankruptcy” predictions. By the second quarter of 2006 GM was giving employees up to six figures to quit. Ford was laying off 30,000 to 45,000 people; closing factories and shifting a lot of manufacturing to other countries. This year looks like it is going to be a more vigorous dance than last year based on the ad campaigns for summer of 2006.

On the other hand, the foreign manufacturers didn’t play the discount game and saw a bigger increase in sales than the Big Three during the summer. More importantly, their increased sales were at full retail pricing. Toyota is now the Number two retailer jumping over Ford and their stock value is ten times that of GM. Nissan is talking about buying up to 25% of GM. Honda made so much money they don’t know what to do with it all so they are branching out in airplane manufacturing.

Why didn’t sales fall for the foreign manufacturers in the face of such a massive discount sale by the Big Three? The foreign manufacturers knew something that the Big Three didn’t know. They knew today’s car buyers are now more focused on the process of buying a car than they are on the price of the car.

It doesn’t mean that price was unimportant – it just means price wasn’t the primary decision factor for most of their buyers.

I got off on this whole car-buying tangent because I just noticed that one of the local car dealers is the latest “Death Dancer.” He has just finished his “LIQUIDATION SALE.” The doors have closed and rumor has it the site will soon be turned into another pharmacy to match the ones on the other three corners.

I never bought a vehicle from my local car dealer. Having heard horror stories from those who did caused me to stay away. I mention this because apparently there were enough horror stories out there enough people went out of their way and bought cars in Reno (86 miles east) or Sacramento (79 miles west) rather than shop at the local dealer.

Although I never shopped there, I did go there on several occasions and it was easy for me to see what the problem was: “conflictive staffing.” It’s a new term and you read it here first. I use it to describe the conflict between the sales staff profile and customer demographic profile. In other words you had an older (baby boomer) customer base that never really clicked with the 20 something salespeople.

This area has an older population. According to Walgreen’s who purchased the site, they have been looking to move into this area for a while because 33% of the area’s population is 55 years or older (That explains why we will soon have a major pharmacy center on all four corners.) compared to 9% for the state of California as a whole.

Say what you want about the baby boomer generation, but as a retailer there is one thing you need to know, we have money, and we want respect. If not for ourselves, at least for our money.One thing I know that minimizes the enjoyment I get while shopping is the generational conflict. I am older; most of the salespeople I encounter are younger. Being younger is not a crime, unless they are in management positions in retail operations…and untrained.

Shopping is a feast of the senses. The more senses I (and other shoppers) engage, the better the experience and the more likely I (we) will buy. Realtors have been all over this for a while. I don’t think there is a home showing anywhere without the obligatory smell of fresh bread or cookies in the kitchen to engage the sense of smell. There also always seems to be fresh cut flowers on the table or in the living room while Yanni plays on the stereo engage the sense of hearing. Realtors are very careful to engage and pace themselves with the demographic profile of their customer. Too bad that doesn’t happen often in retail.

I went into a furniture store last week, and the music (and I can’t believe I am actually going to say something my father once told me) playing in the store was anything but music…to me. The music must have sounded good to the salespeople who were kind of moving to the beat (?) as they walked around in the store (mostly by themselves) but it drove me out of the store. It wasn’t just this store.

A week ago when a business trip got extended, I went into a men’s clothing store to buy shirts. The store was empty save for two young salespeople. One was on the computer. The other was on her cell phone. Both were too busy to help me. The music gave me a headache. Young, untrained salespeople badly managed, is the reason why car dealers, and many other retail stores are doing the “duty dance with death.”

Not feeling very appreciated is one thing. Not having my wallet appreciated is the opening bar of music calling more dancers to the floor. So I was treated in this clothing store pretty much the way friends of mine were treated in the now defunct dealership. Badly! So my wallet and I left, and since I’ve yet to learn to buy clothes over the Internet, I went to the mall. That is why all the strip malls have the same cookie cutter stores in mall after mall after mall. They are bland and boring, but least you have an idea what to expect.

It doesn’t take much to avoid joining the other "death dancers" on the conga line. If you are going to hire young salespeople train them. Train them to pay attention to customers. Train them to respect customers. Train them to serve customers. That’s all it takes to get me to shop in your store.