Live from NRF: A.R.M.E.D. and Dangerous

Jan 18, 2007 3:09 AM  By

New York—When it comes to the ultra-competitive retail marketplace, says consultant Harold Lloyd, the great ones get armed for battle, and that’s why they win the war. During the Wednesday session “Leading Leaders: Getting A.R.M.E.D. for Battle” here at the National Retail Federation “Big Show,” Lloyd—who donned an army helmet and fatigues for his presentation—detailed the principles of his A.R.M.E.D. strategy: affiliate, renovate, motivate, educate, and differentiate.

Affiliate: Great companies affiliate with outside resources, Lloyd said: “You can’t do it alone.” That may mean working with the local chamber of commerce or the state, joining industry organizations such as the NRF, or participating in retailer share groups. Lloyd recalled when he ran a grocery store and had a problem with his meat prep room. He was part of a share group of 24 food-store owners/operators and mentioned his problem during a meeting, noting that he had a quote of $80,000 to fix it. Another member who had been in a similar situation had a solution that cost $25,000.

Renovate: Your store makes a first and lasting impression on your customers, Lloyd said, “so it needs to look fresh and clean and exciting, or you’re done!” As a rule, he noted, retailers should spend $7 per square foot every four to five years on minor “facelifts” to their stores, and $42 per square foot every eight to 10 years for major renovations. At the very least, he said, regularly paint the interior, replace the carpet, pressure-wash the exterior, and attend to any seemingly insignificant details such as that pothole in your parking lot. Your customers won’t care about saving a few bucks in your store if they break an axle when leaving.

Motivate: “You need your troops,” Lloyd said, so keeping them motivated is important. While good store help can be hard to find, he said, “retailers are to blame 80% of the time” when workers don’t do well. For employees to succeed, retailers must provide orientation and training, they have to communicate at all levels, they must provide discipline with fairness, they should recognize employees with sincere praise or compliments, and they must conduct performance evaluations once a year. Contrary to popular belief, “you don’t treat everyone the same,” Lloyd said. “Give employees what they need,” and recognize that not everyone has the same needs.

Educate: All things being equal, Lloyd said, “smart teams win.” Once you hire, keep reinvesting in that brainpower via training and encouraging self-development among workers. As a grocery retailer, Lloyd provided certification for employees, from the cashiers to the meat grinders, “which showed at least that the workers did something to get where they are.” Managers and owners should continuously educate themselves by reading—anything from popular novels to business books to trade magazines—and by periodically stepping into the trenches to work as a sales clerk, a waiter, or a cashier to understand how things work and where improvements can be made.

Differentiate: You have to make your business stand out from the competition. Most retailers know this, but doing it is another matter. “Have five great things you can do better than everybody else,” Lloyd advised. It might be the freshest food, the fastest checkout, the finest selection, the best prices, but retailers need alternative strategic points of differentiation, he said. “Pick your five, and own ‘em.”