Circuit City's failure of service a lesson for mattress retailers
David Perry, Executive editor -- Furniture Today, July 13, 2009
The grass is long and disheveled on the medians that frame the store site. Broken beer bottles litter the pavement at one end of the deserted parking lot. My neighborhood Circuit City store in High Point stands empty, a desolate tombstone on the retail landscape, and one that can teach us a lesson or two.
Steve Stagner, Mattress Firm's president, sparked my thoughts on Circuit City with his comments about the failed retailer at our recent Bedding Conference. His impressive presentation included a challenge for our industry to make itself better by not resting on its laurels.
Stagner warned against the twin dangers of arrogance and ignorance. He cited some telling examples, including the failed assumptions (no need to worry about imports) that ultimately led General Motors into bankruptcy and the poor leadership at Circuit City. That retailer's leaders took their company down with poor store site selection, poor inventory management and lousy customer service, he said.
Did they mean to destroy their company? Of course not. But they took their eye off the things that really mattered, like customer service. In 2007, Circuit City fired 3,400 employees and replaced them with lower-compensated workers to cut costs. Yes, that move cut costs but it also reduced something that is precious: Service.
Let's compare that approach to service to that offered in Apple stores. Need help with your fancy Apple electronics? Step right up to the Genius Bar, where “friendly, expert advice” awaits you, Apple says. The Genius Bar is a stroke of genius. What a smart idea to stress the high level of competence of your employees. What a stupid idea to fire your most skilled ones.
Now I can already hear the critics saying that we don't have enough geniuses in the mattress industry to take this kind of approach. Well, there is room for improvement. But that takes us back to Steve Stagner's challenge to our industry. We must keep getting better. We will do that by measuring our performance (it's amazing how many retailers don't know the basic metrics of their business), setting challenging goals, and striving to improve every day.
We were impressed with the Xtreme Retail Makeover that Leggett & Platt recently implemented at Alabama retailer Bedzzz Express. A team of L&P experts redesigned key elements of Keith Krininger's sleep shop chain, unveiling a softer, more emotional and lifestyle-oriented look that put more emphasis on better beds and sleep accessories. Krininger, a bedding veteran, had the courage to let Mark Quinn and his team introduce significant changes in the business.
As we seek to improve our industry, we need a healthy dose of that courage. Change is not easy to accept, but change is going to happen whether we like it or not.
That empty Circuit City store reminds us that the consequences of failed leadership are steep. Memo to mattress retailers everywhere: Good employees don't cost you money, they make you money.
Contact David Perry at dperry@reedbusiness.com
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