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Cleanup In Aisle 5? Messy Stores, Not E-Commerce, Are Killing Bricks And Mortar
Joan Verdon Contributor
Tom Buiocchi has long believed that cleanliness is a key measurement in determining whether a retail chain will thrive or die.
Now he has research to back that up.
Buiocchi, the CEO of facilities management platform ServiceChannel, has seen it happen time and again: Retailers cut back on store maintenance and improvements and end up on the fast track to bankruptcy, while those who invest in store improvements and upkeep are succeeding and expanding.
A study commissioned by ServiceChannel suggests that struggling retailers who neglect stores to cut costs hasten their demise by turning off shoppers.
In a survey of 1,521 consumers, 70% said they recently have had a negative experience with a messy store, ranging from dirty bathrooms and broken toilets, to disorganized shelves and burned-out light bulbs.
Over two-thirds said they have walked out of stores because they were messy or disorganized.
Four out of five shoppers said they would rather have a clean store than ones with the newest tech, and two-thirds said retailers are forgetting the basics—like clean floors and well-stocked shelves—in the rush to add tech.
Amen to that, said Buiocchi.
“The vast majority of purchases are still being done by people walking into a location. And their experience of that location has never been more important,” he said in an interview.
Buiocchi is in the business of selling software and services that allow retailers to manage store maintenance, connect with and pay contractors, and track invoices, so it’s no surprise that he is touting a survey that concludes store cleanliness is crucial. But he has a point that is often overlooked by retailers.
Messy stores can be a deal-breaker, more so today than ever before.
Today, with so many other shopping options, consumers want to be rewarded when they make the effort to walk into a store. A dirty, disorganized store says the retailer doesn’t care—about the store or the shopper.
Store maintenance used to be considered “a non-sexy part of the business,” Buiocchi said, “but now it directly affects the high expectation for an in-store experience. And facilities managers all have a role at the table now.”
“If you look at folks like Allbirds or Warby Parker, Bonobos or Soul Cycle or Shake Shack, their locations are so comfortable and well laid out and so well maintained. You would never walk into a Warby Parker or a Shake Shack and say ‘Man this place is messy.’ Or the lights are dim or it’s too cold in here. They just don’t let that happen,” he said.
ServiceChannel was founded in 1999 as a software provider to help retailers manage maintenance and repair jobs. The Gap was the first large retailer to sign on as client 18 years ago. It handles work orders for over 500 retail, restaurant and service brands, covering over 300,000 brick-and-mortar locations, and processes 14.4 million work orders a year. The privately held company does not release financial information. Buiocchi said revenues have grown at 40% to 50% annually over the past five year and are “well on the way” to $100 million.
Clients include retail giants such as CVS Health, restaurant chains like Chipotle, and roughly 40% of the tenants of a typical U.S. mall. It also is adding a growing number of retail disruptors that are opening physical stores, including Glossier, Warby Paker and Allbirds.
The company’s offerings have evolved to the point where facilities managers can now call up the platform on a mobile phone and use it to find a contractor, read performance reviews, book a job, track the job, and pay the contractor.
“Much like when you get an Uber or Lyft ride and the entire ride is digitally recorded, the transaction is digitally recorded so someone 3,000 miles away can go fix a toilet for you at a Banana Republic and you will know based on the GPS coordinates when that person got there, how long they stayed, whether they showed up on time, and they can send you a picture,” Buiocchi said.
Retailers pay ServiceChannel based on number of store locations, so store closings are bad news for the company. But it is seeing that many of the new online brands that are opening stores are quick to recognize the value of rigorous maintenance and are signing up as customers.
“There are the people that get it, and there are the people that don’t get it,” Buiocchi said. “Five years from now what are the chances that the people who don’t get it are going to be in business?”
Buiocchi believes reports of a retail apocalypse are overrated. As stores close, new retail disruptors are opening locations and expanding.
“Good progressive retail is investing in their brick-and-mortar experiences and enjoying the benefits of that,” he said. “Bad retail is not and they’re unfortunately being penalized for that.”
So keep those stores clean and the toilets flushing—or it will cost you customers.