Re-Inventing Retail

From the Co-Founders of The Retail Owners Institute.
Tips | Tactics | Insights on the Business of Retailing.

Timeless - and "Towering" - Lessons Bookmark

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At one time Tower Records was the "superstore hangout for music lovers," a $1-billion worldwide chain of 200 stores in fifteen countries, and the nation's largest privately-held music retailer. We're reminded of Tower Records as its founder, Russ Solomon, passed away in March at age 92.

Reading about Solomon, we were struck by the relevance for today's specialty retailers of many of his basic concepts.

Tower Records superstores were distinguished by their size (20,000 - 40,000 square feet), their expansive selection (up to 125,000 titles from all music genres), and discount prices.

The "theatre of retail" was deftly applied. As Solomon once explained, "We stacked hot-selling items on the floor, to encourage impulse buying and to suggest plentiful supplies."

Extended hours: open all year from 9 a.m. to midnight. 

Popular bands and singers sometimes held in-store performances.

But, according to Solomon, the most important innovations were "hiring a staff so well-versed in the local music scene that the store could order its own inventory [for its own market.] We wanted [local] people in the store to run the [local] store – they're your strength."

Yes, Tower Records checked off a lot of today's "best practices":

empowered and knowledgeable staff;

a "Wow!" effect in visual merchandising;

in-store events;

de-centralized buying customized to each market;

very competitive pricing.

And what went wrong? That too offers a lesson for today's retailers.

Too much debt. Rather than selling stock in the stores to fund expansion, he borrowed to finance more stores. And that led to Tower Records' demise. "I was over-extended. I was swamped by the debt," Solomon admitted.

Towering lessons indeed. RIP, Russ Solomon and Tower Records.

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About The Co-Founders

Pat Johnson and Dick Outcalt, The Co-Founders of The Retail Owners Institute®, have been called "The Zen masters of retail finance!"

Since 1999, they have been assembling  their proprietary content into a unique self-help website. The Retail Owners Institute is an unmatched resource that assists retailers worldwide with basic financial training, assistance and easy-to-use tools.

Their engaging and empowering how-to resources about the financial levers in retailing are informative, fun(!), and retailer-friendly. Their promise: "Everyone will 'get it'!"

Pat and Dick are recognized experts in strategic retailing. Working only as a team – Outcalt & Johnson: Retail Strategists, LLC – they have been consulting, publishing, and speaking professionally throughout North America since 1990.

They focus exclusively on retail, or wherever retail is involved. They work with CEOs, CFOs, boards and owners of retail operations, as well as manufacturers or wholesalers expanding into retail. And they also are Retail Turnaround Experts.

Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"