Forrester Wave Report
Leslie Stretch, Medallia CEO, and Borge Hald, Medallia Founder, Reflect on Being Named A Leader by Forrester in The Forrester Wave™ Customer Feedback Management Platforms, Q4 2018 Elena:...
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Picture this: You’re looking for an outfit for tonight’s big party. The shop you’re in is gigantic. It’s organizational scheme seems designed by Escher — or no one. It’s as if a truck full of clothes exploded, and the clothes landed everywhere. The crowds hungrily move past you, searching for the best finds and elbowing you in the kidneys. Oh, and there’s one sales associate for every two hundred customers.
You wake up in a cold sweat. Thank god, it was just a nightmare. But it’s not. It’s called Loehmann’s — and it’s from a generation of retailers that are going the way of the Dodo.
By March of this year, Loehmann’s, a bargain luxury chain with a 94-year-old history, will be gone for good. Gina Bellafante of The New York Times eulogizes Loehmann’s and her younger years “wading” through its racks, which she did “with a sense of devotion and excitement.” She attributes the chain’s downfall to online retailers like Gilt and “our altered expectations of the retail experience” — specifically that, when we are buying something we perceive to be more expensive (or even luxurious), we want, “to engage the refinement of the person selling them to you.” To a certain degree this is true, and there has indeed been a shift in customer experience (in some places) toward the unbelievably hipster and haute, highly-tailored boutiques that she mentions.
But these experiences come at a price, and Gina is too quick to dismiss her instinct that “the hunger for discount” would be “eternal.” It is — as is that for instant gratification. Perhaps, the real reason Loehmann’s is going under isn’t the idea of Loehmann’s, but instead the execution:
“The sales staff at Loehmann’s was never ingratiating or particularly helpful. Salespeople couldn’t or wouldn’t guide you toward the Prada stewardess skirt you might have hoped to find or tell you anything about the collection it came from…”
Now that sounds like something that might grate against the more broadly held expectations of today’s consumers. You don’t need to be a smug hipster to solve this problem. You don’t need to sell eyeglasses, croissants, bicycles, and a razor shave alongside a discounted Gucci necktie in order for someone to buy it. You simply need to provide an experience — from sales associate knowledgeability and engagement to store layout and organization — that will help customers find what they want, in a more or less instantly-gratifiable fashion. Otherwise, there’s absolutely zero advantage over a search bar and an online checkout.
Loehmann’s is not the first of its kind (see: Filene’s Basement) in the greater department store world to perish, nor will it be the last. However, that doesn’t mean all such brick-and-mortar discounters are inevitably destined for extinction. Case in point: Nordstrom Rack. Though younger than Loehmann’s, it too was born in a basement in the 1970’s. It too sells “off-price” high-end clothing and accessories. It too is big and can be a bit overwhelming (a little “wading” required).
The big difference: Nordstrom. You wouldn’t imagine a company that is legendary for its customer service to make an exception, even with its downmarket brand, right? They don’t. They bring the same focus on the customer from their main stores to the Rack. They solicit feedback, they listen, and they act. And they’ve been successful, while others are failing. When the president of Nordstrom, Blake Nordstrom, spoke of this success, it’s as if he were speaking directly to Gina Bellafante: “Customers’ definition of service is changing, and our challenge as merchants is to evolve with that.” Loehmann’s didn’t.
94-year-old Loehmann’s didn’t die of old age. It died from an incapability to change. If it had picked the brains of shoppers and fans like Gina Bellafante for feedback and acted on it, then maybe Loehmann’s would have made it to its 100th Birthday. But it didn’t ask, and it didn’t listen. Just like the Dodo didn’t learn to fly.