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Business Management

Retail Ruckus: Big Boxes Stores Bite the Dust!

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Golfsmith filed for bankruptcySports Authority and Sport Chalet both went out of business. The Big Box retailers are shutting down stores and cutting back staff at record rates. It isn’t just the sporting goods guys: Macy’s, J.C. Penny, Sears, K-Mart, The Limited, American Apparel, CVS and Victoria’s Secret are all pulling back brick and mortar expenditures to focus more on e-commerce ones. Why? Or perhaps more importantly, what does this paradigm shift mean to motorcycle and powersport dealers?

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The American consumer is now more time-constrained than ever, while technology has enabled them to “hunt and gather” from their couch, work or Starbucks. Internet-enabled smartphones have radically decreased the customer’s in-store shopping radius… but you already knew that! Time to get your act in gear, or go the way of the Big Box bad guys.

As a powersports industry sales trainer for nearly 30 years, I always asked the question of manufacturers and dealers: “Do you want to be in the “behavioral modification business” or the “sales business?” The former simply means you need to change the way a customer “thinks” before you can sell him your product.

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This high-brow tactic always takes much longer and costs more than the second option – simply selling the customer something he already wants or needs. Recall that many high-tech start-up businesses fail because they don’t read the (low-tech) market… and don’t have the time or money to “change, create or train customers” to buy their highly-advanced product. Similarly, your dealership doesn’t have the time or money to behaviorally modify the customer back to his old-fashioned shopping habits inside your brick and mortar store. Ain’t gonna happen!

So, what should your strategy be where the big guys fail? Remember, while shopping on an electronic device there is NOT a salesperson present, so there is no possibility to “change” the way a customer currently thinks. Ignorance is bliss, right? Consumers now see, hear and buy more of what they “think” they (and their social media peers) want or need because foreign input is algorithmically censored from their “favorites feeds.” Closed loop! They don’t know what they don’t know. Your store isn’t likely in their social circles to enlighten them… yet. Google (social media and the Internet) cannot give customers the answers to the questions they
don’t know to ask.

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But that’s about to change, too. “The future of mobile is video… and the future of video is mobile,” this was an October 2016 quote from Randall Stephenson, CEO of AT&T, during his $80 billion acquisition of the entertainment conglomerate Time-Warner. Let this revolutionary statement sink in! Mr. Stephenson knows what he is doing when he predicts future technologies synergizing to take over the world of communication, entertainment, news and commerce.

When you think of “video” in Stephenson’s quote, do NOT just think of a “talking head” on YouTube or a feature-laden walkaround of a used unit for your next CycleTrader ad. Instead think of live, 2-way, interactive video on smart phones like we use text  and “webchat” functions now. The social media services – Facebook, Instagram, Snapchat, etc. – are streaming live video. Soon we will no longer even have to type, just talk to our video-phones: “Siri, Google motorcycle dealership near me!” Envision Skype-like selling transactions mixed with text/chat functions… on everything from new units to apparel and accessories. Your “showrooms” and “closing rooms” won’t have to be “rooms” anymore at all.

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“Technology is the number one fundamental driver to our culture,” says Dr. Paul Leinberger. His insightful observations were made directly to the motorcycle industry at last year’s MIC Communications Symposium. Dr. Leinberger objectively delivers messages about how the rest of America is trending. Each year he speaks, he breaks up our micro-view of this recreationally-driven industry and places us on a level playing field with macro-trends and mega-industries. Here are a few of Paul’s quotes, statements and thoughts that jolted my thinking:

– “The future is already here – it’s just not very evenly  distributed.”– William Gibson, 1993. Look outside your local box to see what successful dealers are doing elsewhere.

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– “The future of content will be raw and unfiltered.” Everyone has the ability to publish their own words and videos without the media’s help (take the Trump tweets for example). Fewer customers trust the slick, polished advertising of corporate America anymore. Fake News!

– Invite input and feedback from customers. Even OEMs are doing it. The “BMW Contest For Better Ideas” is now an online public process rather than a secret one of the past. The side benefit is customers more fully engage in your specific challenges. More “light bulb” moments!

Fear not what technology can do to you, but embrace what technology can do for you. Stop following the racer in front of you – take some new lines. Open your eyes and leverage your strengths like never before while making it all more relevant to techno-carrying, social media-addicted customers. They have already changed their habits. Now it’s time to change your outdated retail recipes… and lead us into the next powersports ruckus.

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Be Strong! Be Focused! Be Different!

Unlike the recent example of Big Box sporting goods failures, brick and mortar retail is not going away in the motorcycle market any time soon, so play to your strengths. For the powersports retailer, these strengths include:

The Law
State law requires a motor vehicle to be sold through a state licensed dealer.

The Experiential
Customers continue to strive for unique retail experiences more than ever. Deliver them…uniquely!

The Specialized
If it’s so “niche” that Amazon won’t carry it, it’s going to require a human-to-human interaction inside your store. Play to your specialty and if you don’t have one, make one up!

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The Service
Your customers can’t UPS a motorcycle to a service center or change their oil via an Ethernet cable. Make it fun, but also make it convenient and fast!

The Law is a constant, but the other three are variables where you can do a terrific – or lousy – job moving forward. What’s it going to be? Stay the same while awaiting an agonizing death as Sports Authority suffered or start building an entirely new level of customer experience, specialization and service? Change or die… your choice!

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