June 30, 2011 - I recently spent some time in Indonesia and visited retailers. Some of those retailers were focused on selling to Westerns while others were focused on selling to the local residents.
There was a definite difference between both styles of retailing. Those retailers who were targeting consumers from western nations were placing signs in front of product to entice sales. Compare this with the retailers who were targeting locals and there are no signs next to product to generate sales.
When I asked these retailers why they did not use signs I got a curious look and the comment “Why do I need signs when I can talk to the customer?”
These retailers relied on a conversation to make the sale. When dealing with foreign guests I can understand the need for signage to overcome the language barrier, but when dealing with the local consumer I was challenged, why have signs?
According to these Indonesian retailers signage is a detriment to the sales as it starts to prevent the human interaction and hence the add on sale.
Why Do We Use Signs?
This begs the question why we use signs in western retailing. There is a fundamental difference. Many retailers have lost the art of retailing and now need a support system to help them make the sale. The Indonesians are right; they welcome the customer and hold a conversation with the consumer. They build a human bond and as a result the trust factor increases. In western retailing, we are using signage as a substitute to grow sales. Many retailers are investing less in product and sales training and as a result the human contact becomes less effective. As consumers we often discover sales staff who know less about the product than the consumer and cannot manage the conversation with the customer. The result is the consumer is shifting to online shopping and convenience shopping. Signage has replaced the salesperson rather than support the salesperson.
Every consumer is different. Some consumers want to engage with the salesperson whilst others want to shop “in their own world” and not have the same engagement with the retailer. The role of the retailer is to please both types of consumer. That means that to optimize sales we need to have both sales drivers, i.e. signage and proactive salespeople who are interested in people and their product and are passionate to make the sale.
In the ideal store that is maximizing sales per square metre, the retailer needs a combination of both effective signage and proactive salespeople. The key is always balance. Place too many signs in a store and the consumers focus moves away from the product and onto a sea of signs. Have salespeople who are too passionate about their job and they may be perceived as pressure salespeople.
It is difficult to recommend the right balance as every retail situation is different. In a farmers market or delicatessen the consumer would expect every product to be signed. In a more general store they may feel that having 10 per cent of products signed on a rotation system is more ideal.
When it comes to product knowledge the same is true. In a farmers market or delicatessen the consumer expects the product knowledge and personality selling to be of a higher standard that if they were shopping in a gift shop or variety store.
They key lesson I learned in Indonesia was in the west we are relying to heavily on signage and as we reduce costs in a difficult retail climate we are cutting the training costs of our teams at the detriment of sales. An Indonesian retailer would question our logic.
John Stanley is a retail business coach, speaker and author. His specialist areas are customer focused layout, customer focused merchandising, customer focused marketing and branding, and customer focused selling and service. Email John on
or visit his website www.johnstanley.com.au.
Why do we need signs?
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