I apologize in advance for what I am about to do to you. The trend in television shows is to recap everything that has happened previously after each commercial break. I hate this editorial trend. About ten minutes of every half hour shows seems to be nothing be recapping what has happened before. So I am going to do that to you – sorry in advance.
Two weeks ago, I wrote about my experience shopping on Black Friday at Tysons Corner Mall. I recounted my experience jousting for a parking space with an Asian woman in the parking garage. I wrote about pedophile Santa Claus. I also wrote about the line outside Urban Outfitters waiting to enter the store. I wondered if the reason for the line was that people (women mostly) were waiting to dress and undress Keith Urban in the latest fashions. While not a Keith Urban fan, I could understand why people might wait in line for that. I also promised (seriously) to reveal the real reasons why Urban Outfitters was restricting entry to their store.
If you asked Richard Hayne, the chairman of the company, why the store forced people to wait in line outside a relatively empty store, he would give you two reasons. First, entry is limited to make certain the store doesn't get overcrowded. Second, he would tell you entry is restricted to make certain the sales staff can give the personal attention each patron deserves. At face value, these two reasons might seem reasonable. I agree that there are two reasons why entry to the store was restricted, but I absolutely disagree on the reasons.
I believe the first reason for the restricted entry is to create a sense of exclusivity. If people are forced to wait in line outside the store, the store must be really great. This is exactly the same reasoning used by exclusive New York and Hollywood night clubs. Making people wait in line makes the night clubs exclusive and, therefore, desirable. The branding of Urban Outfitters from its founding in Philadelphia in 1970 has been directed towards being fashionably quirky. In my opinion, there is more quirk than fashion in making people wait in line.
The second reason for restricting entry does involve the sales staff. The store wants to assign each customer a personal salesperson. This might seem like just a little harmless overkill in terms of customer service, but I don't see anything harmless about it. They don't want browsers and price shoppers in the store. They know that assigning a salesperson to a shopper almost guarantees sales. Customers don't want to feel they are wasting a salesperson's time and will buy something. A customer, by human nature, doesn't want to disappoint another human being. In addition, customers aren't likely to compare prices with other stores if they know they get to wait in line again if they return to the store.
I'm not really worried that the idea of making customers queue in front of stores will catch on. It is a classic treat your customers like fools concept, and these concepts never survive for long. Let's examine the two real reasons for restricting entry and see why the concept won't work.
Let's examine the assumption that restricting entry makes the store appear exclusive. The first piece of evidence against the concept was the length of the line. There were maybe fifteen people in front of the store. That doesn't make the store seem very exclusive to me. In a mall with stores packed to the point of violating occupancy laws, Urban Outfitters at 2 PM on Black Friday had at most twenty people in the store and fifteen people waiting in line. Most people obviously did what I did. I looked at the line in amusement and moved on. I was shopping for a Christmas gift for my wife. I went right by Urban Outfitters and went directly to xxxxxxxxx. The store name is a secret since my wife reads my blog. We know the concept of exclusivity doesn't work, because if it isn't working on Black Friday in Tysons Corner, it isn't going to work the rest of the year either.
Let's tackle the personal shopper idea. This idea actually works in the short run. People undoubtedly buy things they wouldn't otherwise. However, how would you feel after leaving the store feeling bullied into buying something just to please a salesperson? Will you ever return to the store? Even the prospect of undressing Keith Urban won't get you to return.
You may be thinking, “Frank, what the hell do you know about retail and marketing? Obviously, these stores run customer focus groups and thoroughly research their concepts. They know what they are doing.”
I have heard this argument many times before – usually when I am spouting off about my obvious business genius after a few Blue Moons. Here are a few names refuting your argument: Citibank, Wachovia, Merrill Lynch, Bear Stearns, and AIG. All of these were big companies full of smart people, and they failed nonetheless. Big companies screw up all the time. Entire retail chains go bust like K-Mart and Circuit City.
About fifteen years I was talking to the ex-boss of my now ex-wife. He was a client of my business partner, Paul. A year or so earlier, my ex-wife was working for him at a great little community bank, NVR Savings Bank. The bank was located in McLean, Virginia and catered to the rich little old ladies, who live in McLean. These women expected great customer service. They were accustomed to being greeted by top executives of the bank and expected to be able to walk into the president's office pretty much at will. The parent company of the bank was a real estate company in financial trouble. They sold the bank since it was the only valuable asset they could sell to raise cash.
SunTrust Bank was the buyer. SunTrust Bank is not a bank that caters to little old ladies by providing access to top executives. If you walk into a SunTrust branch, consider yourself lucky if you can talk to the branch manager. I am not criticizing. OK, maybe I am. Do you think this was a great match from a customer service culture standpoint? Of course not. SunTrust doesn't even let you undress Keith Urban after waiting in line.
I was explaining to my ex's ex-boss (that's a lot of ex's) why I thought the sale of the bank to SunTrust would fail. He told me I was full of crap. He was probably right about that. He then told me the SunTrust people had obviously taken into account the differences in customer service philosophies. To be more accurate, he said the SunTrust people were a lot smarter than I am about banking. A year later, the bank was gone and another bank had taken over the McLean branch. I don't know how much research the SunTrust people did, but it wasn't enough. And apparently they didn't know that much more about banking than I did. The rich little old ladies of McLean didn't like being treated like fools, and they took their dead husbands' millions elsewhere.
The moral of the Urban Outfitters story is that you should avoid creating policies under the guise of great customer service that really have the objective of exploiting customers. Treating customer like fools never works regardless of how much market research you do. Keith Urban told me that. OK, I really don't know Keith Urban any more than I know Jennifer Aniston except in that personal fantasy world of mine. It's a wonderful place.
I haven't done any market research about the concept of Jennifer Aniston Outfitters (see two blogs ago), but I know the concept is sound. We could extend the concept to Courtney Cox Outfitters and Lisa Kudrow Outfitters. Maybe we should just consolidate the names and call the chain, Female Friends Outfitters. I am looking for investors to take me away from the CPA gig and let me follow my dreams. I want to be my authentic self. Yes, I have been listening to Dr. Phil tapes. Pimping Jen and the gals is a lifelong dream. I am only $50 million away from opening. If you are a fool, operators are standing by. Call me. You have my number. Make my Christmas merry.
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