Q & A: Open Their Wallets
Tom Dowdy, 60, likes to get consumers to pull out their wallets and buy. As the former CEO of Sarasota-based retail services company National In-Store, he and his thousands of retail sleuths, trainers and sales staff influenced point-of-sale at Fortune 500s such as Wal-Mart, Walgreens, Publix and Sears for 10 years. The company grew to $47 million in annual revenues before selling to Omnicom Group in 2004. Dowdy’s non-compete clause with Omnicom has expired, and now he and his NIS co-founder and longtime partner, Ira Rosenkrantz, have started over again, launching TEAM TransActive, part of parent company MDC Partners, a Canadian-based global marketing company.
Q. Did you think you were retiring for good when you sold NIS?
I thought that would be the ticket, but it was too early to hang out. Plus, Ira and I have all this embedded knowledge, going from the experience of starting up a company like NIS and growing that through all the trials and tribulations, pain, suffering, success and failure. We’re going to do it again and use all those key learnings to accelerate the process with TEAM TransActive.
Q. What is TEAM TransActive?
It’s about using insights to deliver the right environment, the right products, the right packaging, right prices and communication to satisfy the shopper in a way that was not traditionally possible. It’s about creating a better customer experience. It’s reaching that shopper with all of those things at the moment of sale, so the shopper will say, “I’m going to buy this product over this product.” There are many ways to achieve that, and you have to do the back end research. Different shoppers have different motivations. Some are price shoppers, some are brand shoppers, some are buying for someone else.
Q. How will Team TransActive differ from NIS?
We’re going to have some of the same core competencies, the primary one being merchandising—putting products on shelves, making sure displays are properly located and stocked, and collecting data. But we’re going to add onto that experiential marketing, which is doing things outside of the store, such as brand events at sporting venues, entertainment venues, county fairs. We’re going to do mobile marketing where you have a traveling showroom in a 40-foot tractor trailer in the parking lot of an NFL game. For example, we might be inviting fans to come in and play a game of Madden NFL on an Xbox and provide them with information or a purchase incentive that they can take to a store or use online.
Q. What are the biggest shopping trends today?
Brick and mortar competing against the Internet. What drives a person to purchase on Amazon.com versus going into a department store? You have to enhance the retail experience, from customer service to well-stocked shelves to a bright, airy environment to great product selection to knowledgeable sales personnel to product adjacencies, value pricing and so on. Retailers also have to identify with the communities their stores are in, offering different product mixes, different sections in the stores depending on demographics. We’re being asked to create environments that are not corporate environments anymore.
Q. Anything else?
Retailers are looking at smaller footprints. They don’t need the big superstores anymore. Best Buy is in a conundrum because of legacy leases on huge stores. When they signed those leases they were still selling music and video, but Apple and the iPod took that business away. The rap against Best Buy now is that it’s a showroom for Amazon.com. Shoppers know what they want, they touch it and feel it and then go home and order from Amazon. Best Buy is now looking to downsize and get into more core product areas.
Kohl’s is going to carry fewer items. They’ve introduced kiosks in their stores, so they can expand their footprint by using the Internet. You look at a pair of New Balance shoes and you like them, but they don’t have them in black. You can go to the kiosk at the end of the aisle and say, “Here’s what I want.” They’ll be able to tell if it’s in the warehouse in your size 9, and they’ll ship it to your house for free. That way, they don’t lose your sale.
Q. Don’t all shoppers prefer beautiful, airy environments?
No. Wal-Mart over the last three years has gone full circle. They thought they needed to create a cleaner, better experience and they wanted to look more like Target. When they did that they lost sales because the Wal-Mart shopper loves those impulse items, those palette displays and clutter. Two years ago you walked into a Wal-Mart superstore and went to the checkout counters and you could land an airplane. It was that open. Now they’re adding all these products back in.
Q. What drives consumer habits today?
Q. What retailer is doing everything right?
Q. What shopping experience do you like?
I shop everywhere. I shop at Wal-Mart. I love Lowe’s. I like Nordstrom. I use Amazon and eBay for specific items so I don’t need to run all over town.
Tom Dowdy’s tips for local retailers.
Create a distinctive customer experience.
Borrow the best parts of your competitors, but have a unique
end result for your brand.
Step into your customers’ shoes.
Do they shop in your store for price, selection and service or all of the above? Remember there’s no customer like the one you already have.
Connect with your customers.
Circuit City had connections with their customers when they employed knowledgeable, commissioned sales people. When they fired those people to be more like Best Buy, they quickly went out of business.
Utilize all elements of theater.
Apple stores outperform all other retailers because they offer shoppers an interactive experience that entertains and sells.
Get employee buy-in.
Align hiring practices, compensation and incentives around the desired store experience you want.