Companies such as Best Buy, Circuit City, Food Lion, Hannaford Bros. and H.E. Butt are proving that a consumer-centric strategy can build customer loyalty and increase bottom-line profits. And the industry grows more interested in this concept as more retail companies try their hand at this innovative culture change.
While attending the A.G. Edwards Retailing 2007 conference in Coral Gables, Fla., in January, I came upon one of retail’s newest consumer-centric brands—Commerce Bancorp, Cherry Hill, N.J.
I know what many of you are thinking: Commerce Bank is not a retailer, let alone a consumer-centric one. I had a similar opinion. After listening to a presentation delivered by Vernon Hill, Commerce Bank’s chairman and president, however, I changed my mind.
According to Hill, a powerhouse retailer has many attributes to live up to. This retailer re-defines service delivery, and successfully changes the customer experience. It constantly crushes its competition, and it consistently produces predictable financial results. Interestingly, Commerce Bank embodies all of these attributes.
Yet Hill doesn’t take all of the credit. Rather, Hill openly admitted that he created “a growth company in a no-growth business” by modeling his format around those of successful retailers.
“These companies build loyalty by providing a superior customer experience, not low prices,” he said at the conference. “We followed the same approach. It turns out our core customers are interested in the best experience, not the best rate.”
And Commerce Bank successfully fulfills its consumer-centric strategy by always keeping the needs of its “shopper” top of mind. Targeting the time-starved consumer, Commerce Bank is open seven days a week, and shoppers can bank up until 8 p.m. in some locations.
Each “store” offers self-service technology such as a coin-counting kiosk (free to consumers and non- consumers alike), and online banking. And in keeping with its consumer-centric strategy, “in-store” associates cater to shoppers with children by handing out crayons, coloring books, toy banks and lollipops.
If some readers are still questioning how they can twist this model into their own retail operation, here is a hint: Dig into Hill’s core philosophy and build a brand based on the customer’s needs.
“Creating memorable experiences, tapping emotions and delivering on your business promise is what creates fans and builds legendary brands,” he said.
If you are still not convinced, consider this: Hill opened his first location in 1973. By focusing on this retail-inspired business model, Vernon had 30 “stores” in 1990. Today, the fast-growing business has 440 stores across metropolitan markets, including New York, Philadelphia and Washington D.C., and southeast Florida, and has more than $45 billion in assets. (This unorthodox chain is also on target to have 900 locations by 2011.)
What if more retailers took a lesson from Hill? To me, the worst-case scenario is they would create a brand that delivers merchandise, customer-facing technologies and experiences that create satisfied, loyal customers.
If Commerce Bank’s unprecedented successes are any indication, the worst-case scenario doesn’t seem so bad. Any takers?