Do Retailer CEOs Need to Get Out More?

Discussion
Sep 13, 2013

It’s a strongly held belief within retailing that if you want to be a successful leader of a brick & mortar retail chain, you need to get out of the office and into stores. A RetailWire poll in 2011 found that 95 percent agreed that store visits were very (78 percent) or somewhat (17 percent) important to being a successful CEO of a retail company. The logical next question then becomes, are retailer CEOs getting out to stores frequently enough, particularly in light of the current challenges facing their businesses?

Many retailers continue to face an uphill battle to increase same-store sales and profits as consumers are either cash strapped or spending on big-ticket purchases such as cars and homes.

Count Macy’s among the retailers being challenged. Last month, the department store reported same-store sales fell 0.8 percent. The company also cut its outlook for the year.

Bloomberg News reported yesterday that Macy’s CEO Terry Lundgren spends 40 weeks a year visiting the company’s stores. The visits are typically a surprise with Mr. Lundgren calling managers about 10 minutes out to let them know he’s on the way. According to the report, Mr. Lundgren’s visits "have taken on added urgency."

How often do top retail executives need to be in stores to make a difference? What do they need to do when they are in stores to make the most of the trip?

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31 Comments on "Do Retailer CEOs Need to Get Out More?"


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David Livingston
Guest
8 years 8 months ago

Of course it varies among CEOs. From my experience, CEOs visit the fun stores they like the best and ignore the step children stores. It’s best to arrive unannounced and don’t come in wearing a suit. I always think it’s nice when I see someone bagging groceries and an employee points out its the CEO.

One of the most annoying things I’ve had a CEO do is look down at my name tag and say “Hi David, how are you?” as if he knows me.

My suggestion to the CEO is go into the bathroom. The condition of the men’s room is usually a good indication of how well the store is run.

Dick Seesel
Guest
8 years 8 months ago

While I doubt that Mr. Lundgren spends forty full weeks visiting stores – after all, he has a few other things to do – even forty trips to markets or individual branches are well worthwhile. And doing this without advance warning is a great idea; anybody who has worked in retail knows about the “state visit” syndrome when everyone knows that the boss is on his or her way.

If I were in a CEO’s chair, I would focus on three things: The merchandise content; the service standards; and, the presentation and housekeeping standards. That’s a pretty all-encompassing list, but a stealth visit could be very eye-opening.

Max Goldberg
Guest
8 years 8 months ago

Retail executives should be in their stores every week, with most of those visits being unannounced or announced at the last minute. They need to view the store as a consumer. How do the aisles look? How easily can items be found? Check status of in-stock vs. out of stock and if pricing is clear. Most of all, they need to probe customer service at all levels of the store.

Unless a retail executive understands his/her stores from a consumer’s point of view, he or she is doing a disservice to the company and its shareholders.

Zel Bianco
Guest
8 years 8 months ago

Retailers need to visit stores often, both announced and unannounced, because the experience they’re having is the same one customers receive. They should be observing everything from inventory positions to aisles, how customers are being treated, and the overall flow in the stores.

Announced trips to say hello are also good for employee morale and letting staff know management is accessible. Also, spending time in the stores to watch and learn how tasks are performed helps administration to understand the challenges their employees face and help them find solutions and better synergy across the board.

Ryan Mathews
Guest
8 years 8 months ago

There’s being in the store and being in the store.

I advise my CEO clients to visit their stores as often as possible — without pre-announcements or an entourage. Of course, sometimes this isn’t good for the ego.

I was once on an unscheduled tour of a store with a client. The place was a mess, the staff indifferent and the service non-existent. Finally, having enough of being ignored my client went up to an associate lounging by a counter.

“Good morning,” he said. “My name is _________.”

“How nice for you,” she responded, never looking up. “I’m Betty.”

He couldn’t understand his experience since every other time he had conducted a (scheduled) store visit the units had been immaculate and the staff were falling all over each other to take care of every customer that walked in the door.

So, my strong advice is dress down, shop like a customer, sneak in and prepare to be shocked.

Gene Hoffman
Guest
Gene Hoffman
8 years 8 months ago

The effectiveness of a CEO making store visits is in direct proportion to the clarity the CEO’s business vision and how clearly it is understood and supported daily by store associates.

When those conditions are clearly met, the CEO and the associates can equally interact during store visits in discussing how the store is contributing — or not — to the company’s mission. Otherwise you might hear an associate whisper, “Cheese it, here come the big stupid boss.”

Thus, the frequency and effectiveness of a CEO’s store visits is dependent on how well the CEO has created a foundation — and a goal — for his or her store visits.

Mark Burr
Guest
8 years 8 months ago
How often do CEOs need to visit their stores? They should be in stores at least as often as a typical customer visits a store. In the supermarket world, that average is about 2.5 times per week. I would think that heuristic holds true for every type of retail segment. There is an average and they know what it is for their segment. Follow the same frequency as their own customers and they’ll do just fine. Visiting stores should always be a routine, not a secondary activity. What do they need to do while they are there? A couple of tips: Take off your suit jacket. Turn up your cuffs. Keep you hands out of your pockets. Bring in a shopping cart from the parking lot. Keep your hands outreached to your associates and your customers. Greet both genuinely. Thank the customer genuinely. Pick up a piece of paper off the floor. Straighten a few things on the shelves and displays. Use your eyes as if you were a customer. Look for your own favorite… Read more »
David Zahn
Guest
8 years 8 months ago

In addition to visiting one’s OWN stores, a CEO should also be checking online (their stores and competition), checking competitors’ stores, and talking to SHOPPERS, not “just” employees.

The suggestions above are all good, I just think they are incomplete and create a “bubble” that may not reflect the shoppers’ reality.

The executive should actually shop their stores…not just pose for photos or glad hand associates. Can they find what is on “their list?” Do they get frustrated at different points in their shopping journey?

And, to a point that was made — don’t just go to the stores near home or near the corporate office — get out and see stores near and far.

Cathy Hotka
Guest
8 years 8 months ago

Most of the executives I know make it a point to visit stores on a regular basis. It gives them unfettered access to associates and helps them to compare new stores to older ones. Executives who really want to get a sense of the store should enter with the intention to buy a specific item in a specific size. Prepare to be disappointed….

Ed Rosenbaum
Guest
8 years 8 months ago

There are many stories about the CEO who dresses down to visit a store and comes away with more than he bargained for in terms of the “ivory tower” perception and reality. If the “Big 3” automakers had done more of this in the ’60s and ’70s, there would be more American built cars on the road today. Many times the CEO is not told the real truth about what is happening in the stores. He gets a version of it, but not the full story. Nothing is better than seeing and hearing for yourself. No matter how hard the truth may be, the CEO has to be aware of it.

John Hyman
Guest
8 years 8 months ago

I have found that department store senior execs tend to get into the stores more frequently than other retail chains do. Depending on their preference of behavior, these visits can be motivating or they can inflict terror.

But, yes, it is crucial for CEOs and other senior level execs to visit their stores. They learn the true “state of the company” and they can share upcoming changes, events, and facts that drive loyalty and engagement at the store level.

Greg Callahan
Guest
Greg Callahan
8 years 8 months ago

When Sam Walton was alive, he was an expert at this. He knew long-time associates by name. Sometimes stores had advance notice and sometimes it was just a phone call to have someone pick up Sam at the airport. Associates loved it when Sam came to town.

Shep Hyken
Guest
8 years 8 months ago

Visiting the stores is important to stay in touch with reality: the customer. When leadership visits the stores – and the employees – it gives the employees a sense of pride.

An interesting spin on just visiting a store is to actually do the job of a front-line employee. Imagine the CEO of Macy’s spending an hour or two at the cash register, ringing up sales and thanking customers. Sounds a little like the TV show “Undercover Boss,” but the point is for the executive to have a real experience. The customer doesn’t need to know the man or woman taking care of him or her is the CEO or owner.

Kenneth Leung
Guest
8 years 8 months ago

Retail executives should take a chance to visit stores anytime they can. I remember my first job out of college working at retail technology company, the first thing I was sent to do is to work cart return as one of the customer’s stores. You can learn a lot about how the business is doing by observing the cashiers and customers and the interaction/traffic in the store.

All the metrics report gives you is numeric information, the feel of the store must be experienced in person. And I agree with the previous comment from David Livingston, definitely check the bathrooms! 🙂

Paula Rosenblum
Guest
8 years 8 months ago

I think the consensus here is correct. A store visit is best done without notice, but also without fanfare. A roll-up-your-sleeves and help attitude is far more helpful than a royal entourage.

Most of the places I was a CIO, the CEO didn’t just visit, he’d actually work in stores in busy seasons. In my mind, that’s the most valuable thing a CEO can do on those visits – feel the store associates pain, and understand the issues.

Of course, there are those who’d argue that in the largest retailers, the CEOs are like rock stars who would distract employees and customers alike. To that I say, it’s well worth the distraction for EVERYONE to see that the CEO cares.

Lee Kent
Guest
8 years 8 months ago

CEOs should definitely make it part of their routine to visit stores often and not just the fun and favorite stores. They need to visit old, new, small town, urban…you get the picture.

I too agree that these visits need to be working visits. They should lend a hand to get a feel for what is going on on the stores. They should walk the store and yes, inspect the bathrooms and break rooms.

During one of my stints within retail, I worked for a retailer that required corporate execs to adopt a store close to their home and attend store meetings on a monthly basis. It was well worth it and eye opening!

James Tenser
Guest
8 years 8 months ago
The short answer is every week; on weekdays and weekends; both announced and un-announced; in own stores, competitor stores and other stores of special interest; wearing a suit sometimes and a pair of jeans at other times. That’s a tall order for a busy CEO, but that’s why you have a smart phone, an iPad, an assistant or two, a car and driver, and maybe a jet share. If you’re running a retail chain from inside an office, you may want to reexamine your approach. Why this is essential: It’s the first line of defense against the corrosive paradox of scale, in which the larger a chain gets, the greater the physical and psychic distance between headquarters and the stores. To appreciate your shoppers’ experiences, it is crucial to do some shopping when visiting under cover (donate the items to charity if you don’t need them yourself). When making announced visits, don’t miss the opportunity to assure associates that headquarters really is watching; that store performance really does matter; and ask their opinions about how… Read more »
Maggie Vanderburg
Guest
Maggie Vanderburg
8 years 8 months ago

A CEO should visit their stores at least once a year, unannounced. They should have a executive of the region also visit at least each quarter. These visits should be positive, pleasant and they should greet employees and introduce themselves. Positive behavior does wonders.

Dan Kasper
Guest
Dan Kasper
8 years 8 months ago

I think spending time in a store is invaluable to a CEO, but it has to be balanced with other needs. I think the example of Terry Lundgren is a bit extreme. For retailers with a large number of locations, once a year should be enough. There are lots of tools for executives and general managers to have virtual eyes and ears in a store through real-time info gathering via mobile devices.

Chris Petersen, PhD
Guest
8 years 8 months ago

I can’t say enough good things about CEOs, and other members of the C-Suite, getting out to visit stores. They will learn far more if their visits are a “surprise” for the stores, than if they are a planned event which creates artificial store prep.

But to be really successful and valuable, members of the C-Suite need to not just “look at stores” from a layout and merchandising perspective, they need to observe how their consumers are actually shopping. They won’t understand consumer behavior that by meeting with store managers.

To understand today’s Omni-channel consumer, CEOs need to be also interviewing consumers in the stores they visit … and watching how they navigate the store environment.

Martin Amadio
Guest
Martin Amadio
8 years 8 months ago

Some very good comments here. Especially about the remark about the bathrooms.

Retail happens out in the world, not in the office. The head office is there to support the retail stores, not the other way around. Too often, retail executives have their focus on the wrong metric. Too many policies and decisions get “pushed down” to the store level without a true understanding of what it really means at store level.

In my experience, the store environment and the personnel who interact with the customers make the biggest difference in the shopping experience. Sure back office management is important, but there is no substitute for being in the store.

Execs should unceremoniously visit as many stores as often they can. The store is where it all happens.

Craig Sundstrom
Guest
8 years 8 months ago

“According to the report, Mr. Lundgren’s visits ‘have taken on added urgency.'”
Why, exactly? Are we to assume he imparts some genius or inspiration that will increase each store’s sales 0.9% after he leaves? Or maybe the employees misbehave without adult supervision? If either of these is true, the company has bigger problems than a fractional sales decrease (any company; I don’t mean to single out Macy’s).

I’m going to be the holdout for endorsing this idea – or at least no endorsement without caveats. Yes, a visit might inspire employees or show “I care,” but it’s also likely to be seen as intimidating, patronizing or headline grabbing. As for intelligence gathering, I doubt that even the premise of a surprise attack is sufficient: a spouse, or trusted friend would be more apt to get “the true picture”…and I hear Paul Drake’s men work wonders.

Robert DiPietro
Guest
8 years 8 months ago

They should visit the stores at least two times month to get a front row view of what’s going on. At least one of the trips has to be a surprise visit to really see what the customers experience when shopping in the stores. It does no good to see a store that just spent double the normal payroll to prep for the CEO visit.

Key things to do – talking to associates and customers.

Verlin Youd
Guest
8 years 8 months ago

Great comments already. MBWA (management by walking around) is still very effective, especially when approach in genuine and sincere and when the executive does things that help, i.e. bring in carts, straighten shelves, pick up trash when seen, and maybe most important – buy something and help the store personnel with their daily sales goals!

Fabien Tiburce
Guest
Fabien Tiburce
8 years 8 months ago

When I worked in the merchandising department of Canada’s largest supermarket chain, the head office happened to be above a store. Really, I can’t think of a better setup. It was very common for us analysts but also Directors, VPs and yes, the CEO, to be in the store once, twice or more per day. It’s not just about checking that the standards are met (although that’s huge and to scale this you need retail audit software capable of handling photo attachments), it’s also important to “feel” the store, to view each category on the shelf, in three dimensions not just in a two-dimensional planogram. I think retail CEOs should live and breathe the store environment, just like everybody in the organization.

Dave Wendland
Guest
8 years 8 months ago

This is a difficult question and my esteemed colleagues have done a wonderful job describing their observances.

My answer is a bit different. Absolutely every retail employee, from the corner office to the stocking clerk, are CEOs. Chief Experience Officers. And effectively attracting, retaining, and providing value to shoppers is a full team effort.

Martin Mehalchin
Guest
Martin Mehalchin
8 years 8 months ago

Of course the CEO needs to visit stores frequently, but I’ve rarely found that to be a problem. The level that tends to get disconnected and live in an HQ bubble is a couple of tiers down from the executive suite: the VPs and Directors in functions like Merchandising and IT.

Also, it’s not enough to just visit your stores, you have to visit competitor and peer stores too and also keep living the life of your core consumer. Say you’re running a home improvement chain: it’s important to do the occasional DIY project around the house so that you stay connected to the reality of the consumer’s reason to be a customer of your store. Grocery execs should buy their own food and cook for themselves once in a while, etc., etc.

Tony Orlando
Guest
8 years 8 months ago

Even though I own one store, as the CEO, it is crucial that my employees reflect my vision on customer service, and quality of goods we produce. I feel lucky to have a very friendly and loyal staff, so it is important that I take care of them as best I can. Working side by side in the departments is a lot of fun, and when I am not here, they do a great job of taking care of the customers.

Are there problems? Of course, but they are handled quickly, and we move on. CEOs come in many forms, from single stores to multiple stores, but they must learn the business from the ground up, and stay humble, but focused, as to what you expect from your employees.
By the way, I agree with the clean bathroom statement above. Lot of great comments in this blog today.

Alan Cooper
Guest
Alan Cooper
8 years 8 months ago

Leaders and key personnel from many corporate departments need to make unannounced or even undercover visits. Too often, announced visits have the effect of Buckingham Palace guards, as everyone perks up, staffs up and overacts to ordinary circumstances.

I’ve also watched a few YouTube videos from Undercover Boss. Quite enlightening. CEOs often encounter the reality of everyday happenstance – leadership or the lack thereof, varying levels of operational effectiveness and efficiency, adherence to HR policies or the lack thereof and the team culture in relation to the company mission. Of the episodes I’ve seen, the takeaways and galvanizing effects on the company, employees and leadership outweigh the TV drama aspect.

Kate Blake
Guest
Kate Blake
8 years 8 months ago

They should spend one Saturday a month running a register, unloading stock and handling customer complaints, without his or her handlers stepping in. He should get a thirty minute break, have his cellphone confiscated and his bags checked.

Generals make bad decisions and lose the respect of the infantry when they don’t show up on the field of battle.

William Passodelis
Guest
8 years 7 months ago

There should be as many visits as possible, by as many management personel as possible, and the more non-descript, the better. They should see the stores as their customers do, so that any issues are revealed and can be addressed.

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