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Back To Basics Vs. Focus On Technology: 2 Retail Transformation Stories

Tuesday Morning and Bridgestone Firestone both have been around for many years. The home décor retailer Tuesday Morning was founded in 1974, while Bridgestone and Firestone launched as separate businesses in the early 1900s.

Despite (or perhaps because of) their long histories, both companies recently have been facing challenges around appealing to today’s demanding, digital-empowered consumers. To secure long-term business success, these historically traditional brick-and-mortar retailers have taken dissimilar paths, but with a common destination: putting their customer back at the center of their operations.

Tuesday Morning is in a complete turnaround, seeking to get back to the “heritage of the brand” that its most loyal customers are looking for, according to Melissa Phillips, President and COO. The retailer is pushing several traditional “levers,” including store location and design, inventory optimization and supply chain modernization.

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Bridgestone Firestone, other the other hand, is working to use new technology and data analytics to become “ranked among the best customer service companies,” noted Amy Bonder, VP of Sales. “We want to be like Nordstrom.” The retailer isn’t ignoring store design elements, however; it’s testing a “Starbucks-esque environment” in its newly established retail lab stores.

The bottom line for both companies is a focus on implementing successful strategies that create long-term revenue and loyalty, with the customer as the center. Executives from both companies shared their transformation journeys during the 2016 Texas A&M Retailing Summit in Dallas.

Tuesday Morning Re-Evaluates Locations, Store Design

After several tumultuous years of C-level changes and falling sales, Phillips was charged with a full-fledged turnaround. The retailer conducted shopper focus groups and assessed its Net Promoter score, uncovering insights that led to a multi-part turnaround.

One of the key pillars of the turnaround was focused on real estate. “We discovered that more than 40% of our stores were in the wrong location,” said Phillips. In most cases, by moving to a better location, often quite nearby, the retailer saw sales spike. “In one case we moved across town and saw 50% comp store sales increases,” Phillips reported.

Another key pillar is around store design, focused on the experience the brand’s loyal shoppers are comfortable with. At one point, Tuesday Morning introduced a test store design that looked like a “boutique,” said Phillips. When shoppers entered the store “their perception was that we raised our prices. Now we are introducing an updated prototype – with concrete, paint, reclaimed wood and galvanized metal – a warehouse look. We’re adding some new signage but not a ton. We found out that it’s the product that speaks to her [our loyal consumer].”

Since the turnaround effort was launched, “we have grown $100 million in four years,” Phillips said. Other elements of the turnaround include:

  • Expansion of specialty brands and “unique treasures”;
  • Refined closeout strategy;
  • Inventory optimization
  • Significant supply chain improvements. “This has been a massive undertaking,” noted Phillips. “We had a lack of investment. We are under invested and inefficient.” For starters, the retailer recently opened a new DC on the west coast.

What’s next for Tuesday Morning? They’re taking it slow…holding off on trying to attract younger shoppers and introducing mobile components until the basics are improved. As of Q3 2016, Tuesday Morning store updates are being completed on 100 stores per year – one every three days.

Tuesday morning currently operates more than 700 stores in 41 states.

Bridgestone Firestone Seeks To Differentiate In A Competitive Marketplace

Like Tuesday Morning, Bridgestone Firestone sought to learn more about what the customer wants through focus groups and a brand perception study. “What we learned is that nobody is doing it great,” noted Bonder, and that “Trust is most important for our customers.”

The research also uncovered that Bridgestone Firestone is in a “sea of sameness” and needs to answer the question, “How do we break out?”

One way to break out, noted Bonder, is to “understand the value of customer data. We had been more transactional, but if we can keep customers coming back they are 8X more valuable to us over time.” And the most loyal customers are 60X more valuable, she added.

Bonder and her team put together a strategy called Vision 2020, designed to transform Bridgestone Firestone into “the most trusted car care provider in every neighborhood. Our aspiration is to change an industry that few people trust.”

A multi-part industry, automotive care caters both to consumer and business customers. “We also need to be able to classify customers who will be crossing the B2C and B2B lines,” said Bonder.

The company’s transformation strategy kicked off in 2014. It will be refined through 2017, and will be focused on growth through 2020.

With Starbucks in mind as a model, Bridgestone Firestone has opened seven retail lab stores, featuring seats in the middle. “It’s a Starbucks-esque environment,” Bond explained. “We conduct service right next to the customer. They can clearly see the pricing.” The new stores also feature shopper-friendly retail components, offering batteries, flash lights, even golf balls. “And we moved the intimidating big wall of tires down to knee level.”

The company also is using predictive analytics to let customers know when they will need service in the future. “Technology is revolutionizing our industry,” Bonder added. “We need to build an ecosystem around the customer experience, and technology can predict care failure.”

With an additional focus on employee motivation, Bridgestone introduced “new uniforms, higher teammate engagement and a focus on investing in the company,” Bonder explained.

Bridgestone Firestone currently operates 2,200 stores nationwide.

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