Businesses exist not to be measurable, but to serve the consumer.
That was one of the ideas Gary Hoover, founder of book superstore BookStop and business information firm Hoover’s Inc. shared with attendees here yesterday in a keynote address.
Cars are made to transport people, not to solely get good mileage. Likewise, businesses exist not just to make money, but also to serve a need.
As an example, he pointed to retailing in the 1970s. Stock analysts – including Hoover – didn’t think regional discounters like Wal-Mart had a chance against titans like Sears.
Sears had the higher paid executives, the better locations, a booming catalog operations and a strong brand identity. Nothing seemed to be on Wal-Mart’s side, except the fact that Wal-Mart was incredibly focused on their customer.
This has carried Wal-Mart far, noted Hoover, but they won’t stay on top forever. He predicted strong competition from Target, another retailer that is succeeding because they differentiated themselves from Wal-Mart by putting an eye not only on service but style.
“Target is not trying to copy Wal-Mart,” he said, noting home improvement store Lowes got a foothold against Home Depot in much the same way.
Be sure you know what the soul of your operation is, he said. “Once you find your rhythm, it dictates everything.”
Toys R’ Us succeeded where other large toy retailers failed because it knew its rhythm was a love of the customer and a love of toys.
That passion translates down to the store level, where top managers are rewarded not with a trip to the Bahamas but a trip to New York in February to attend Toy Fair, a weeklong trade show.
Catalogers looking to find the rhythm of their audience should observe their customers. He suggested looking up what your top geographic sales areas are and then going there to look at their lifestyles – what they are wearing, what they drive and where they live. Likewise, business-to-business catalogers could do the same, going into office supply stores, Rotary Club meetings and (if possible) office cafeterias to find out what concerns their customers.
Hoover noted that if he were to start a catalog himself, it would be in a niche appealing to aging baby boomers, a demographic he said he gets a glimpse of every time he looks in the mirror.
As they age, boomers are going to become more and more interested in nostalgia and their past, a factor evidenced by things like the success of collectibles sales on eBay, Classmates.com, Antiques Roadshow, museums celebrating American pop icons like Coca Cola and Spam, and anything to do with genealogy.
The challenge, he said, “is how you maximize that and make it interesting.”
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