The Retail Leadership Symposium class at SoHE welcomed speakers from Ross stores on November 15, 2017. These presenters included University of Wisconsin-Madison alum Aaron Glasser, Divisional Merchandise Manager, and Bert Stewart, College Recruiter. They both shared insights of working within an off-price retailer. Ross’ focus is not so much discount as it is value, so here are some of the tips we took away on how to provide the value that customers are looking for.
Who is Ross?
In 1982, two young entrepreneurs created Ross and opened six stores in the San Francisco area. Currently, this fortune 500 company boasts over 1700 stores and is the largest off-price retailer in the country with more than twelve billion in sales.
When it comes to retail statistics, Ross absolutely crushes the competition. Ross sells through 70-90% of its inventory every week, compared to an average of 8-11% from almost every other retail name in the industry. The average basket size is $30 with a single item being around $9.99. These factors combine to give Ross a huge advantage in the entire retail sector and are some of the key factors as to how they are so successful today.
Aside from their main marketing slogan “Dress for Less”, the company holds true to its business motto, which states “our strategy has been the same since the first day the company was founded – delivering branded bargains to the customer at great value”. Digging a little deeper, some key points the company focuses on includes:
- They’re big – as the nation’s largest off-price retail chain, they have a great deal of purchasing power
- They’re savvy – Ross’ buyers search the globe for the best brands and lasts styles; plus, they work directly with manufacturers
- They believe in “no frills” – there are no window displays, mannequins, fancy fixtures or decorations in Ross stores so they can pass more savings onto their customers
Bert emphasized the importance of having a good company culture to provide the best experience for employees and consumers. The most important qualities to note are as follows:
- Deliver value – one must figure out what customers are willing to spend money on
- Be humble – remaining self-critical to maintain the highest level of excellence within the company
The Art of Understanding the Customer
The typical Ross customer is a suburban mother of two who shops for herself or other family members. They shop on a budget and the experience of shopping at Ross is finding great brand products at the right price point. Ross understands that their customer isn’t there for what other retailers offer: fancy displays, sales associates pushing sales, etc. The Ross customer experience is all about “the treasure hunt”. When a customer walks into Ross and sees something they love, they don’t wait a second to reconsider. With amazing products at even more amazing prices, it creates an exciting shopping trip unlike anywhere else. The customer can feel incredibly good about a piece that is uniquely theirs, without it emptying their wallets.
Ross’s buying team also know the business and watch trends while trying to catch them early. They use different methods to monitor trends and are flexible. Ross buyers know the value of products and they know what products their customers will value as well.
No Frill Zone
Ross aims to turn the customer’s attention to the product, nothing else. The interior design and layout of the store is extremely simplified with no mannequins, window displays, fancy fixtures or decorations within the store. All that exists is the product itself along with clean signs addressing each section of clothing within the store.
The sole purpose for this design: cut costs to provide the most value to the customer as possible. Store design and layout can be a costly expense for some retailers out there when trying to appeal to the customer’s’ senses. By stripping the store of all its frills, customers may not have the best aesthetic experience, but they know that product matters and that Ross means business.
Oftentimes, in off-price retail the product is seen as “last season” or “outdated.” However, this idea is entirely untrue for Ross. The relationships that their buyers have with their vendors allows them to carry new products and be the first call. Another way in which they acquire new product from a large brand name is by buying only a small amount from the vendor. They then distribute this small number of items throughout all of their stores, making it hard to find. This concept satisfies their vendor because their high-end product isn’t associated with off-price retail, and Ross is building a trusting relationship while carrying trendy product. To stay on top of trends, when first building a relationship with large vendors sometimes they take cuts in the first few deals. Buyers will do this in hopes of profiting from future deals if this is product that customers are searching for.
The DOs and DON’Ts of Vendor Relationships
DO ask questions! Get to know your vendors outside of the business. Learn about your vendors from a personal perspective. It will pay off in the long run!
DO understand that it is acceptable to say “no” to vendor. Not every relationship is the right fit, so it is important to say no to a particular deal.
DO be face-to-face when negotiating and completing business deals. It shows the vendor you are committed to making the best deal.
DON’T make any promises that you do not think you can uphold. Once you make a promise, you give someone your word and your credibility as a retailer and a person.
DON’T want to boast and brag about deals. Ross prides themselves in being humble and therefore self-critical to promote growth!
DON’T try to nickel and dime your vendors. You do not want to give too much information to potential vendors as well as you do not want to give them the minimum amount of money. The main goal behind this statement is to stay fair with your vendors when completing negotiations.
Overall, we are so grateful for Ross’s visit to the Retail Leadership Symposium. We cannot wait to see what Ross does in the industry landscape in the near future, as well as the opportunities and fulfilling careers that they can provide to our students and alumni!
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