Black Friday has come and gone. You and your team have worked all year for this weekend. You have tallied the numbers (revenue, margin, comparable sales, traffic counts, etc.) and you have asked yourself the big question, "Did we make plan?" This weekend sets the tone for the rest of the holiday season, and the holiday season makes or breaks your year. You know the game. You play it every year and you love it.
You will spend the next few weeks keeping a close eye on performance. You will keep your team fired up and focused on customers. But as a leader, you are already looking ahead to next year. What do you need to do over the next year to make sure next year's Black Friday is the most profitable ever?
What do we know about retail in the next twelve months? Overall, this Black Friday was a success for retail and it shows that the economy is beginning to get better. Sales were up from last year as shoppers took advantage of bargains and free shipping. It's encouraging to know that shoppers were back to buying items for themselves as well as gifts for others. In addition, they were buying higher-priced and higher-quality items compared with last year when they were just buying the basics. Customers were still cost conscious, but they were buying! Online sales were up 9% the day after Black Friday as well. All this points to a better season than last year, but it isn't enough to wipe out concerns for next year.
There are still over 15 million people out of work. The time it takes before new products become commoditized continues to shrink, slashing margins and opportunities for profit. New technology is consolidating products, which means fewer products to offer and fewer products to cover the square footage of the retail floor. For instance, cell phones, MP3 players, GPS, digital cameras, digital camcorders are all converging into one product. Who knows the influence iPads will have in the area of consolidation? An increased amount of retail web presence means that more people are shopping online and shopping less in stores, which crowds competition and makes creating the right customer experience more difficult.
You need to find new ways to grow your business and the days of riding the wave of new technology or moving into a new market are over.
So what do you do?
Consider diversity as a prominent element of your strategy.
Why diversity?
The face of the United States is changing. Your new customer base is primarily coming from three areas:
1. Women - Even though they aren't growing as a percentage of the population, they continue to increase their influence as they move into higher areas of leadership and start their own businesses in greater numbers. Retailers are also recognizing how much they influence purchasing decisions in the home.
2. Minority Ethnic and Racial Groups - In Los Angeles and other cities you can't even use the word minority anymore. Latinos are the fastest growing segment in the USA. 26% of children younger than 5 were Latino in 2009. That means by 2020, over ¼ of the people looking for jobs for your company will be Latino. ¼ of your possible customer base will be Latino. How much do you know about attracting and retaining Latinos as customers and employees?
3. Baby Boomers - The number of people over the age of 65 will jump to 54 million in just nine years (from 35 million in 2000). This will create a customer base often ignored in retail - the retiree. It will also impact the employee base as more people leave the workforce than ever before.
So how do you succeed in an environment that is changing right before your eyes? As you build your strategy and execute your plans, follow the Four R's of Diversity Business Development: Be Real, Be Relevant, Show Respect and Build Relationships.
Be Real - Your potential multicultural customers want to know if you really care about them as people or if you just want to make money off them. Do you care as much as they do about their children's education, about developing their small business, about helping them have fun with their hard-earned money? They will know your intentions by their shopping experience in the store and online.
Be Relevant - Most of your multicultural and diverse customers want what other customers want. They want the newest technology. They want clothes that are in fashion. However, they also want products that are culturally specific, as well as services and financing options that meet their unique needs and are written in a language they understand.
Show Respect - Show respect for the culture and for the individual. Understand where your diverse customers are similar to your other customers and where they are they different. Showing respect doesn't mean treating people the same nor does it mean to give some people preferential treatment. Showing respect means to give uniqueness equal value.
Build Relationships - It's essential to build real relationships with people in diverse communities. It's more than having a booth at your local Cinco de Mayo festival or putting an ad in a multicultural newspaper. Your multicultural community wants you to get to know them. Participate in their community by hiring them as employees, getting to know the issues that affect them and be seen as a true partner.
How do you practice the 4 R's of Diversity Business Management? Primarily, there are four items to focus on:
Change Management - To be successful in this space is to recognize that diversity is primarily a change management effort. It's not enough to just do skill training or have bilingual signs.
Management Development - It is essential to make your managers effective change agents and provide training and coaching so they have the skills to run a diversity-friendly business.
Rewards - Reward managers who grow their business by creating loyal, diverse customers.
Employee Training - Your employees need to know how to engage with diverse customers by adapting your company's desired customer experience to their needs.
Attracting a new customer base takes time, but if you begin to plan now you can experience some wins before next year's holiday season commences. It's a great opportunity to grow your business by showing a whole new population that you care.
Jim Langemo is the managing director of Enso Diversity Group and a proud friend of Monarch Leadership. The Four R's of Diversity Business Development are the copyright of Enso Diversity Group.
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