Talking shop: wonder what makes shoppers tick? 5 retail superstars reveal how to please customers and, more important, how to keep them coming back for more

Entrepreneur, Sept, 2003 by Elizabeth Goodgold

Is it a trend or a fad? Will it sell or wind up on the clearance rack? Will it turn my customers on or off? These are questions retailers face ever day. Make the wrong decision, and witness a sales dive. Make the right decision, and become a retail hero.

Assembled here are a diverse group of retailers: ESPN Zone, Hot Topic, Starbucks, Anthropologie and Build-A-Bear Workshop. Each one is succeeding because it has discovered an innovative solution to a unique retail problem. Read closely to find out how to target a fickle customer, develop an enduring brand, create a destination, sell a lifestyle and build a relationship with your clientele.

ESPN ZONE THE POWER OF THE BRAND

When yon step foot into any of ESPN Zone's eight locations, you know you've entered a place like no other. Huge HDTV screens broadcast nonstop sports, an enormous glacier wall tempts you to climb to the top, and interactive sports games urge you to compete.

This is a world where the ESPN brand is king, and you never forget it. From live ESPN TV and radio broadcasts from the restaurant to its aptly named Season Ticket Holder frequent dining card, the establishment is a veritable shrine to the sports-frenzied fan.

ESPN Zone understands the connection it has with its core audience of males between the ages of 25 and 39. Its menu boasts the ESPN Burger, the Zone Cheese-steak and a full pound of chicken wings. Visitors, of course, have ample opportunity to purchase branded merchandise, allowing them to become walking billboards.

In essence, ESPN and ESPN Zone are one, or, as George Whalin, a retail expert with Retail Management Consultants in San Marcos, California, explains, "ESPN Zone has created great synergy between the franchises."

If the ultimate goal of branding is to create an emotional relationship with your customers, then ESPN Zone has succeeded admirably. It presents a case study of how you, too, can create a retail environment where your brand is reinforced through all five of the senses: Ensure that within all lines of sight your brand name and colors are prominently displayed, choose music appropriate for your target demographics, tempt your customers to touch the merchandise, encourage sampling in a food-based establishment and (if applicable) infuse the environment with a compelling scent.

The never-ending sports coverage at ESPN Zone "[keeps] the wallpaper changing every day," says John Pierce, the company's director of marketing and creative content. "Our coverage gives customers something new to talk about every day." The entire experience encourages diners to linger an average of about 90 minutes. And the longer they stay, the more they spend.

HOT TOPIC KNOWING ITS TARGET TO A T

It's 9 p.m. Do you know where your teenager is? If she's into punk or goth (short for gothic), she's probably hanging out at Hot Topic, the retailer for this fickle market. "Come in or you suck" challenges a welcome sign that lets you know you've entered a world targeted toward 12-to-22-year-olds. Surrounded by brands such as Morbid Threads and Vamp, excruciatingly loud music, racks upon racks of body jewelry and tons of insulting T-shirts (like "Wow, you're ugly" and "I know how you feel, I just dealt care"), the stores exude attitude. More important, Hot Topic rings up big sales.

With 418 stores, annual sales of $443 million and consistent double-digit quarterly growth, clearly this chain has discovered a key retailing secret: Know your target better than anyone else. How does Hot Topic do it? By encouraging employees to report on trends, paying buyers to attend teen venues and events/religiously responding to the 1,400 e-mails it receives each week, and stuffing a Report Card (comment card) into every shopping bag. All managers, including CEO Betsy McLaughlin, read the scores and comments and make adjustments to the merchandise accordingly.

Since the teen scene is so heavily influenced by music, Hot Topic also sells CDs and patrols concert halls to discover the band of the moment. By working with U.S.-based suppliers, it can jump in and out of fads quickly.

One of this retailer's greatest strengths is its low markdown rate--less than 10 percent of sales. It's achieved, of course, by understanding its consumer. Teenagers are often spending someone else's money and are therefore less price-sensitive. Management smartly encourages the sale of gift cards in lieu of merchandise and has introduced licensed gift cards featuring images such as SpongeBob SquarePants and the rock group Korn. The cards act as collectibles, so the unredeemed rate surpasses the industry average of 5 to 10 percent, further contributing to profitability.

STARBUCKS CREATING A DESTINATION POINT

Starbucks CEO Howard Schultz often recalls the moment in Milan, Italy, when he knew he could turn his dream of great coffee within a cafe environment into a destination point selling $3 cups of java. He has created a brand so desirable and a customer base so loyal that the average Starbucks consumer visits a location 18 times per month! But how does Starbucks keep what it internally refers to as "enthusiastically satisfied customers"?