4. In your most recent role as CEO of an independent jewelry chain in Chicago, you recognized the threat of out of market competition was imminent. You chose to use this as an opportunity to redefine the brand and streamline the internal processes. Describe what the business “looked like” when you began this process.
The business had evolved quite a bit since it was founding in 1964 as a rare coin and estate buying business. In the ‘80’s the business grew very quickly and went through several transformations.
In the early part of this decade, I took the management team through a self discovery process. We needed to figure out what we were passionate about, and what we do better than anyone else in our market.
Through this process the team realized that the passion was to “help people celebrate life’s special moments” and that what we sold were “symbols of love and success”. Once this was accomplished, we could look at the day to day things we were involved in and start stripping away the things that did not fit with our vision. One example is that we closed the coin department in three of our locations.
5. What was the biggest and/or scariest risk you made when starting this process?
The biggest change we made was closing two underperforming stores and opening two new stores within a 12 month period. The two locations that were closed were in areas that were good for estate buying (the old business model) and moved to areas that were better suited for luxury retail.
6. In all your years as a retail executive, what do you consider your finest achievement?
Executing the strategy listed above during a difficult economic time, funding the projects solely from the proceeds of store closing sales.
Showing posts with label Good to Great. Show all posts
Showing posts with label Good to Great. Show all posts
Thursday, May 22, 2008
Tuesday, May 20, 2008
Excerpts of Ryan Arnold Interview (part 1)
1. Retailers from all over the country seek your counsel and you’re paid very well for your advice. Without giving away any trade secrets what steps do you recommend retailers take to remain competitive and guarantee they do not take lose market share to competitors?
Retailers need to remain very focused, always keeping in mind what their unique selling proposition is. The mass retailers are getting stronger, and the only way for specialty stores to survive is to serve the niche that they are strong in, and to keep aware of any threats to the niche.
As an example, Sharper Image’s niche was selling interesting gadgets for men. One of their biggest products was their air filter; at one time it represented 40% of their sales. When sales of this product started to decline, they failed to update it or replace it. Best Buy and Apple have replaced Sharper Image in this category.
2. The current retail climate stinks like Bourbon Street after Mardi gras. It’s forced some retailers to act a bit more shrewdly; taking business they may have otherwise turned away in better economic times. What are your thoughts on the benefits and potential pitfalls of changing your strategy? Is it possible to stray too far from your original business strategy that you can’t recover?
You need to have a clear vision of who you are and what makes you unique in the marketplace. In “Good to Great” Jim Collins talks about the “Hedgehog Concept”, which is figuring out what you can be the best in the world (or your market) at. Once you figure this out, you need to base all of your decisions on whether or not they are in alignment with your Hedgehog Concept.
If your strategy stops working, you need to look at your business in the context of the market and figure out what has changed. Things are always changing, businesses need to be constantly improving and becoming more efficient.
3. The New York Times recently wrote of the steady decline in luxury goods sales: “More than 1,000 respondents said that online advertising was the most influential in encouraging luxury goods purchase. Of the premium luxury consumers, 72 per cent purchased goods as a result of seeing an Internet advert, followed closely by magazines (70 per cent) and television (62 per cent), emphasizing the need for further integration in luxury goods campaigns.” How do you reply to that?
The Internet needs to be part of any specialty retailers marketing plan. This can be implemented in many ways: ad words, banners, websites, blogs, and eBay. The new wave of social networking sites will have a profound impact on retail; how to utilize these sites is the $100,000 question!
Retailers need to remain very focused, always keeping in mind what their unique selling proposition is. The mass retailers are getting stronger, and the only way for specialty stores to survive is to serve the niche that they are strong in, and to keep aware of any threats to the niche.
As an example, Sharper Image’s niche was selling interesting gadgets for men. One of their biggest products was their air filter; at one time it represented 40% of their sales. When sales of this product started to decline, they failed to update it or replace it. Best Buy and Apple have replaced Sharper Image in this category.
2. The current retail climate stinks like Bourbon Street after Mardi gras. It’s forced some retailers to act a bit more shrewdly; taking business they may have otherwise turned away in better economic times. What are your thoughts on the benefits and potential pitfalls of changing your strategy? Is it possible to stray too far from your original business strategy that you can’t recover?
You need to have a clear vision of who you are and what makes you unique in the marketplace. In “Good to Great” Jim Collins talks about the “Hedgehog Concept”, which is figuring out what you can be the best in the world (or your market) at. Once you figure this out, you need to base all of your decisions on whether or not they are in alignment with your Hedgehog Concept.
If your strategy stops working, you need to look at your business in the context of the market and figure out what has changed. Things are always changing, businesses need to be constantly improving and becoming more efficient.
3. The New York Times recently wrote of the steady decline in luxury goods sales: “More than 1,000 respondents said that online advertising was the most influential in encouraging luxury goods purchase. Of the premium luxury consumers, 72 per cent purchased goods as a result of seeing an Internet advert, followed closely by magazines (70 per cent) and television (62 per cent), emphasizing the need for further integration in luxury goods campaigns.” How do you reply to that?
The Internet needs to be part of any specialty retailers marketing plan. This can be implemented in many ways: ad words, banners, websites, blogs, and eBay. The new wave of social networking sites will have a profound impact on retail; how to utilize these sites is the $100,000 question!
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