Well there you have it; the head of our largest retailer declaring that they only have one weapon in their marketing armory and they’ve fired it. May as well pack up and go home.

They used to tell us in marketing school that there was Product, Price, Packaging and Distribution. Turns out there’s just Price.

Retail is in some trouble. Much angst about the feelthy internet gobbling up THEIR sales.

Do this for me: open a newspaper and look at the retail ads.

Page after page. Photos of products with the price next to them. I forgive your thinking that nothing has changed in forty years of retail advertising.

Here’s a clue, Bernie. If it’s not working, try something different. Try putting QR codes in your ads linking to videos that explain why I need your product.

Supermarkets: I know what your product range is. I know where your chain sits on the price spectrum. I know about loss leaders. I’m not running in to your store because you have tomatoes on special. If price is my key criteria, I’ve already made the decision. You offer me no extra information in your advertising and no reason to visit. Supermarkets and liquor stores treat their customers like idiots.

Car sellers: instead of a page full of empty cars photographed in a car yard, link to a video of a salesman pitching the virtues of each car. Isn’t that their job?

Myer and David Jones hope that their photo of competitively priced manchester triggers my realisation that I need a new set. But I don’t buy manchester on price.

If I have a pressing need to buy something and I see it advertised at a discounted price, I’m probably interested. But at any one time there are DOZENS of things I’ve imagined I need. I ruined my pressure cooker. I want new lighting (I always want new lighting). Need to get bloody birthday presents. But the thought of visiting your store is just completely uninspiring.

Will I be surprised by what you’re selling? [Oh wow, David Jones is selling dancing lessons]. Will I be entertained by an in-store demonstration? [So here’s how you cook buffalo in a pressure cooker]. Will someone lead me by the hand to the various departments and save me 50% of shopping time? No. No. No.

Price is a trigger but only in some circumstances – there are other factors at play. Presence, inspiration and salesmanship are at the core of discretionary purchases.

In another universe, here’s what Bernie said about the failure of the January stocktaking sales:

“If we continue to rely on discounting, we’re toast. We need to get people in to our stores. We need to rejuvenate the shopping experience. We need to train our staff better. Luckily, we’re blessed with visionary staff and diligent management. Bring it on”.

In the 1950s, new products were new. Those days are gone. Learn a new trick. Give me a reason. Show some imagination. Tell me a story. Engage me, you tired old conservative has-beens.

Publisher Henry Rosenbloom and bookseller Mark Rubbo on Late Night Live talked about the fragile state of the industry and blamed the Internet, the Aussie dollar, the GST and the e-book.

And these are real factors. But what has the industry done to re-structure the retail offering to compete in this new environment? Precious little, gentle reader.

I did the bulk of my Christmas shopping in bookshops and it was the same as it was 20 years ago.

I’d add that there are good independent bookshops in Perth that choose their books carefully and are run by knowledgeable and helpful people. Here’s a roll call:

The Lane Bookshop, the Bookcaffe, New Edition and Planet Books.

But follow any of those links to understand why Amazon is doing well. (Particularly the Lane; it’s a pearler).

Maybe unfair to expect much innovation from small, independent booksellers but the bookselling chains do have resources and their lack of innovation is shameful.

I was in Borders. They have an ‘on-line catalogue’ you can use to look up a book. “2 copies in stock”. So I find a guy who helpfully looks in the various possible locations and reports back: out of stock. Get this: the database only updates every 48 hours. If only they had computers! So there’s the first tip for bookshops: implement real time inventory tracking.

I was in Dymocks. The sales person there does the look-up for you. Maybe it’s too complicated for customers … Their database searches every Dymocks store in the state. The title; a popular 2010 book, was out of stock everywhere. What’s meant to happen at this point is the sales person says to you, “we don’t have THAT but have you read THIS?”. Nope. He suggested I try Angus & Robertsons. Tip #2: The customer wants to buy a book NOW. Help the customer to buy a book NOW.

I was in Angus & Robertson’s. That really is a bumhole of a store. Books on the wrong shelves; old titles; the staff going through the motions. But here’s an idea that applies to all three chains: instead of sticking every book in one motherfuckingly huge section, put paper signs in between the books to show where the different letters of the alphabet start. I have thoughtfully illustrated this for you. See above.

But. Why classify by alphabetic order of author anyway? You’re not a bloody library. Tip #4: display books in order of popularity, not by author’s name. I know what you’re thinking. How will I find the book I want if I know the author’s name? See Tip #5.

Tip #5: Put a barcode and a shelf number on every shelf. Scan the book and the shelf barcode when you put it on the shelf so the computer knows exactly where the book is. When people use the catalogue (which could also be an app they download to their phone) it tells you the shelf-number AND shows you a picture of the spine of the book so you can eye-ball it quickly. If it’s out of stock it shows you the location of other books by the same author.

A contemporary book store should be about saving you time, helping you select and delivering a pleasant experience in a physical space. Remaining tips relate to that experience.

New Edition often plays Chopin in the Northbridge shop. Music, atmosphere: here – take my money.

I’d love to see a Recommendation Table. Customers are invited to pull one book off the shelf and put it on the Table. (Yeah I know this screws up the inventory system but it gives the customer a stake). I’d like to see some books OPENED so I can read half a page.

I’d like to do the store’s personality test. 10 multiple choice questions and the store computer generates a reading list which the staff member then turns into a pile of books to peruse.

Or it’s a list of single sentences from the 20 most recent new releases and I pick my favourite three.

If your business is under environmental pressure it doesn’t work to keep doing what you’ve always done. That path leads to extinction. Retail has to aggressively use technology and it has to develop more compelling experiences that differentiate it from online shopping.

Here are some suggestions, without the benefit of any market research information.

1. Use social software and market research to solicit the best ideas from the shop floor. Coles employees skew young and are comfortable with this technology already but they are not engaged with the challenge. Every store has people with good ideas who (I suspect) have never been asked their opinion. Let staff rate each others’ ideas and reward the best ones. You have the biggest workforce in Australia. If they want you to succeed, you will.

2. My hunch is that Coles should be re-positioned as LOCAL, generating pride at store level as to their separate identity; re-stating COLES as COLES ARMADALE, COLES MOSMAN PARK etc. Stores would source and promote locally grown produce and provide opportunities for in-store community advocacy. There will be substantial goodwill in ‘giving Coles back to the community’. It’s more about the people than shiny new stores and stock levels.

3. Coles Fruit & Veg should lead a deep restructuring of the farming industry; explaining food quality and wastage issues to consumers. Conspicuous, closer links with farmers.

4. Run a high-profile campaign in the short term called ‘Turning Coles Around’ in which you promote your desire for public feedback. Suggestion boxes on every checkout. Create www.turningcolesaround.com.au, publishing staff and customer suggestions. Making Coles an underdog is a strategy that will work very well in Australian culture.

Today, after asking some questions about her clientele, I gave her some unsolicited marketing advice on how to improve business.

1. Remove ugly signage

2. Work your strengths

The strongest area is the side path along the left hand side of the building; dappled light, intimate but barely noticeable from the street. There are about 8 tables for two behind the two front ones.

I suggested she needs to draw attention to this area by creating a bamboo wall (say) from the front of the house to the street, so that the path is the same width all the way. Re-orient the tables and chairs so they face the same way as the ones down the back; that will exaggerate the visual connection.

3. Garden full of furniture; house full of plants

We should visually join the inside of the premises (which are quite friendly) to the outdoor area. Because of the tinted window it’s not clear that there is seating in there. So remove the tinting.

4. Atmosphere is not necessarily expensive

The predominant view walking past the premises is this white wall. Note ugly pipes:

But look closer; there are colourful flowers on the ground:

These need to be put on blocks so that they are eye level or at least cover the pipes. This and an understated wall feature higher up will do the trick. The owner likes gardening. I told her to go crazy. Tiny vase on each table. Visible flowers in that front area will add massive appeal at practically no cost.

I’ll update via the comments if she implements and advise of the results.

The fourth best thing about Japan, after Japanese ladies, Cupie Mayonnaise and the kotatsu is the attitude to customer service. Americans can give good service, but it’s different: it’s good because they want you to tip them. Not so much a service as a transaction. Australian service is better than it used to be, but people still confuse being of service with being subservient. Grudging niceness. Convict heritage.

The Japanese seem to understand better than most cultures that people like to be made to feel special. Attention to detail, extraordinary packaging and an unmatched willingness to correct any defect or problem in their product.

There is a tradition in Japanese retail of greeting the customer when they walk into your shop. The greeting Irrashaimase or its more casual form Irrashai rings out a million times a minute across the land. Such a simple thing to do. Acknowledge the customer the second they walk in your door. It carries more than one message: ‘I know you’re here. Thank you for coming. I’ll be with you as soon as I can’. Part of our unwillingness to do this in Western cultures I think stems from the ‘rude to shout’ value system – the staff are usually not next to the entrance. But if I had any retail clients, I’d be recommending public greetings as Standard Operating Procedure.

Businesses in Australia seem to be under the impression that once you’ve arrived in their store they’ve made a sale. Maybe so, but that doesn’t mean they’ve made you a customer. Every time I go to a coffee shop or restaurant I am re-assessing their worth; will I go back there or not? I think most people work on that principal.

Location is important, of course. But I don’t shop regularly for groceries at the closest supermarket. Nor do I regularly use the closest bottle shop. Because I don’t like those stores and I have a choice. My local coffee shop has my business because I am recognised when I go there. The little Indonesian girl sings out my name in greeting when I arrive and farewells me by name when I leave. And I have a rapport of some sort with the pretty girl that doesn’t smile enough and the shy ethnic ladies who work in food prep.

My third visit to a nearby Dome Coffee House earlier today will be my last. Blank-faced processing by the guy behind the counter. Not a single extra word taking my order or delivering my coffee. I realise there is a skills shortage but I don’t think it’s as serious as the training shortage.

I don’t need to tell you that a visit to a supermarket is a de-humanising experience. To this day I avoid the supermarket as much as I can, despite the obvious convenience of single stop shopping.

Supermarkets are not very innovative businesses. The last success in supermarket marketing happened when Woolworths clobbered the competition with the “Fresh Food” positioning in the 1980s.

I find myself shopping at boutique supermarkets these days; I drive past my closest supermarket to get to Fresh Provisions in Mount Lawley where the fruit/veg is better, where there is a quality selection of cheese, scrummy mueslis, rich chocolates, be right back just going to get a snack …

I know it costs me more to shop here but I don’t feel like I’m being processed. Some of the people who work there TALK to me for god’s sake.

Mainstream supermarkets don’t bother competing in this segment and I think that is a mistake. I am a profitable customer; I buy premium quality food products. And they would get a decent hunk of my business if they had a section of local, gourmet food products. This could be a new marketing push for a chain.

I would brand it as Coles’ Local, making it a new section which promoted direct-delivered product from small suppliers and constantly showcased NEW and seasonal products. It would require more management than other sections but it would be high margin and it could deliver one of the chains something they undervalue at present; point of difference.

Many restaurant owners have forgotten the importance of relationship. It’s not just about food and location, it’s about service, relationship and personality. That is the advantage restaurants should have over fast food chains.

Often, but not always, the person who takes your money asks you if you enjoyed your meal. Usually the answer is “yes”. It’s the perfect moment to create a relationship. If I don’t have a relationship, I may as well try a new place next time! Anyway, so when I’m paying and I have answered “yes”, I always wait for them to ask me the question that never comes. “Will you come back soon?” I’m a polite person, I’m probably going to say “yes” again. And in doing so I have created some small obligation on myself to return to that restaurant.

Why has no-one ever asked me that question? Do I not tip enough?

In SL I was shopping with Kate; I’d asked her to show me around. We (her avatar and mine) were walking around a virtual shopping mall and we were using chat software (IM) to communicate. The only significant changes I’ve made to the actual text of our communication is to change names and to substitute the word “paintings” for what we were actually looking for (never you mind).

Me: i need to get some paintings.
Kate Jones: Ayate has Ovid set up his shop here again? [Kate has IM'd a friend for info]
Ayate Morowa: hmmm one sec. let me look
Kate Jones: i think his last name is Kane.
Kate Jones: ok
Kate Jones: he has paintings
Ayate Morowa: yes
Ayate Morowa: second floor
Kate Jones: ok upstairs?
Kate Jones: ty [ty=thank you]
Me: thanks Ayate
Kate Jones: would you like to go have a look?
Me: yes please
Ayate Morowa: over this way on the second floor. the direction I am facing.
Kate Jones: k follow me
Kate Jones: ty Ayate

To sum up, my character/avatar is walking around a store with Kate. She IM’s another person who has more knowledge about the subject. That person directs us to exactly the right spot. (If I’d had questions about the art she could have IM’d the artist). Kate then takes me to the exact place and I buy the goods. This all happens within a virtual world, where labour rates are minimal, where all the people are beautiful and I am getting personal service. I don’t need to leave home and I am in complete control of the transaction.

For high ticket items like cars, electronics, jewellery and clothing, people will use SL to buy on-line or select on-line then attend a shop front to complete the transaction. The difference between this and a web site is the level of involvement. In Second Life, you are there inside the transaction. And so is a salesperson.

Although there are good savings to be made, it smacks of compromise at a time when people want to demonstrate a commitment. Most of us are stupid enough to believe that this means spending more than we can really afford.

A jewellery purchase is usually a symbol of love or commitment. These sorts of decisions are made in the limbic system of the brain. Rational decisions like saving money and notions of societal norms reside in the neocortex. For most people, a business proposition like the Secrets shhh one is going to cause cognitive dissonance. Equals purchase resistance.

It’s kind of the opposite to what you try to do in marketing. You want to align your business proposition with what the customers already believe. Then you try to inextricably link your brand name with the proposition.

Normal consumer purchase behaviour is to show off when you score a bargain. People are subconsciously seeking respect and relationship with others by offering someone what they perceive to be valuable information. “I have valuable knowledge. I am clever. I am willing to share my knowledge with you”.

Probably the best example of this in recent times is the eBay story. Initially some highly sought-after goods (mostly electronic goods) were sold very cheaply and “word-of-mouse” did the rest.

Word-of-mouth is critical. Secrets shhh do not have this working in their favour. An important component in word-of-mouth is making yourself look good. Few women will tell their friends about this store. If their husband funded the purchase they would make their husband look bad. If they funded it themselves they are proud of the bargain and they devalue their cleverness by making the bargain more common. Their closest friends may be told. Maybe.

After my relative and I discussed the purchase and the concept of the store I asked her if she would tell anyone about the store. “No,” she said. “No way.”

It’s an interesting case study. I think they’ve got it wrong. I don’t think that anymore, having read the comments. Thanks commenters for fascinating input.