The End of Retail Business

Going Out of BusinessIs the retail industry dying?

Stores that I grew up with, like Toys R Us, Sears, K-Mart, and Radio Shack are either in bankruptcy or out-of-business. Other retailers are reducing the number of locations to become more profitable to their investors.

The local retailer finds themselves even more challenged to deal with the likes of Walmart and Amazon.

Radio Lives on Local

The prescription for the radio business is to focus their programming on their local community of license. In other words, be VERY local in everything they do.

If the radio station you listen to could be transplanted into another city without changing a single thing about their programming, other than their weather forecasts and traffic reports, then that radio station isn’t really local.

If, on the other hand, you drive into a community and you have no idea what the people on the air are talking about or who the people they’re talking about are, then you have come upon a LOCAL radio station that is serving the people of their listening area.

Local Retailers

In the smaller markets I’ve managed radio stations in, we didn’t really do much business with those big box retailers. Sadly, in most cases, after the grand opening schedule and remote broadcast, they pretty much stayed away from local radio.

The local businesses that lined the main street, or were located in a strip mall or populated the surrounding small towns, were the life-blood of a local radio station.

As Walmart and Amazon strip away the ability for these small merchants to make a living, radio’s business base is likewise being decimated.

21st Century Retailing

Retailing is being disrupted. While some retailers are closing, we also see companies like Apple, Amazon and even Coca Cola investing in building new brick and mortar locations.

The change that’s occurring according to Greg Satell is that “the primary function of a physical store is not to drive transactions, but to service and support customers.”

In other words, retailing is being reimagined.

Radio Reimagined

Radio is giving up its major strength by not having live, local personalities on the air 24/7. Successful small retailers are winning because they engaged in their community and are part of the community’s fabric. They are owned and staffed by dedicated people who believe in super-serving their customer base.

We are living in a time of too much automation and algorithms.

The moves being made by the Apples, Amazons and Cokes to get closer to their customer base by having local people serve their local community is an indication that the pendulum is starting to swing in the opposite direction.

Radio cannot ignore this change in the wind.

Radio needs to unlock the enormous potential of people serving people.

Radio’s Why

A couple of weeks ago, I got a lot of people talking when I asked “What’s Radio’s Why?” What it can’t be any longer is, “we’re #1” or “we have the most listeners.” Nobody cares.

There are more radio stations on-the-air in America, than at any time in the history of radio. Ironically, there’s less choice of formats to listen to and there are less people working per station today as well.

It’s time for radio stations to define an audience for each station and then super-serve that audience. The radio stations who’s audiences are the most dedicated and passionate will be the winners, not the ones with possibly a larger, but passive audience.

Just as each station’s audience is clearly defined and targeted, businesses that are seeking those same people will become just as defined, and a win-win business relationship can be built and sustained.

As I lived through the consolidation of radio and the automation of tasks, I felt that the radio industry applied technology to many of the wrong areas of the business. The air staffs were the first folks to be eliminated in favor of voice-tracking and automation. The main radio station phone line, the listener’s first point of contact, was automated instead of having a live person to greet the caller.

The radio industry eliminated, through technology, the very points where the “rubber meets the road.” The people serving people point.

The Human Connection

I own a lot of Apple gear. I didn’t buy any of it at an Apple store. I bought it online. My iPhones from Verizon. My other gear online from Apple.

What the Apple stores mean to me is a chance to go in and play with the equipment, to ask questions and, like when my MacBook Air crashed, to have a place I can go and have it repaired, almost overnight.

The Apple stores are my human connection to Apple.

The radio industry was built on the human connection. Radio’s air personalities were constantly promoted, in print, on billboard, on television and they were always out and about in the community being highly visible. During consolidation, radio lost its way due to non-radio investors who only saw the money-making benefits of cutting costs to widen margins. Once this “Best Practice” type of thinking wormed its way through the whole broadcast industry, those benefits were quickly marginalized.

Values Shift, Not Disappear

“The businesses that thrive over the long-term,

not only see where value is shifting from

but where value is shifting to and race to get there.”

-Greg Satell

This is radio’s wake-up call.

Is anybody listening?

23 Comments

Filed under Education, Mentor, Radio, Sales

23 responses to “The End of Retail Business

  1. Mike Buxser

    At most stations today, The lights are on, but nobodies home.

    Like

  2. Bob Harlan

    Dick, I know local radio is imperative to survival, but I would like to explore what the radio station of the near and far future should look like. What will drive the millennial generation to tune in to local radio on the traditional radio or online or on an Alexa style device? What do the millennials want?

    Liked by 1 person

  3. Build it right and they will come. Stand up & Stand Out!

    Like

  4. Hal Widsten

    I think one answer to what Bob Harlan is asking is “Human Contact.” Live people on the air 24/7 who make the connection with the audience person by person. That is an economic difficulty in small er markets but a necessity in large ones. We must make the connection with each listener on some level.

    Liked by 1 person

    • Agreed Hal. I think people know GREAT RADIO when they hear it. And the “Human Connection” is vital as we are creatures that grave human contact.
      -DT

      Like

    • Joe Jindra

      Hal,

      We were down in your neck of the woods just over a week ago. Our son-in-law is in the USAF and stationed at one of the area bases. During our time there and while in the car, we listened to KONO-AM, “almost” my kind of music! With modern technology making it so easy to voice-track without a lot of time commitment, I don’t understand why stations choose to do imaging only and not seize the opportunity to have “human contact.” Voice-tracking can work and work very well if done with some forethought but yet not require a whole lot of time. If we could do it successfully in our former rural market, why can’t the big boys?

      Liked by 1 person

  5. Les Bagley

    The challenge for most truly local stations today is the death of local retailers to support them. As more big box stores edge out the mom and pop businesses, the local ad dollar gets edged out too. Maybe an Apple Store comes in, but as a national retailer they also rely on national advertising. Apple in particular relies on online promotion, pretty much shutting local radio out. And it all began with the ‘’Mallification” of America, which cut out local buys from even the local stores there, with policies that said, “Mall Advertisers must spend X% of their gross sales for advertising ‘in Mall-approved publications.’” The X was usually so high that it pretty much precluded any additional advertising for the little guy, and the word “publications” pretty much eliminated the local time salesman from consideration.

    As local downtowns are shuttered, so are local advertising outlets. Empty storefronts, and multiple storefront antique and craft malls and second hand “thrift” stores are not a particularly good or consistent advertising base. And even if your downtown is “revived,” how many t-shirt shops, coffee kiosks and “art galleries” will have to buy to replace the revenue lost when your local groceries, haberdashers, shoe stores, garden centers and dress shops all gave up the fight against a single Wal-Mart?

    Radio is not alone in this dilemma. Local newspapers which once ran 3 or 4 sections today are just a few sheets folded together. It’s not because there is any less news, but because there are fewer local advertisers to fill those pages. And with fewer advertisers, they have less revenue to staff the place with redundant reporters to cover “lesser stories” and features, so maybe they are forced to cover less news.

    If you don’t still have the revenue, your radio station can’t pay to have multiple dedicated broadcast news people, 6 local full-time jocks and a plethora of part-timers, a promotions staff and half a dozen sales people. So you cut back and automate to just try to stay on the air. One guy now tries to do the work of a dozen. But no matter how talented he is, how dedicated, and how many hours he puts in, he’s still just one guy. And the creative synergy of jocks trying to one-up each other, trying to our report other news people, or write the funniest spot is lost. And that hurts more than any bean-counter can understand. And competition is lost too. Now that one owner controls all three AM-FM stations in the same county, and the same 4 people run them, there’s no reason to try to be better beyond simple lip-service. Why knock yourself out and waste the promotional budget trying to make yourself number one, when all you’re really doing is making your already number 1 station fall back to number 2?

    The umbrella from major markets affects every station as well, not just those adjacent to big cities. Agency buyers figure they can cover 80 to 90% of the population by buying only major markets, and they can get the rest with ads on network and satellite or cable channels. It’s too time consuming for them to fiddle with a little station that might reach 6,000 people out in the wilds of West Flognart, especially when to reach any kind of saturation, you have to buy 200 of them. “And I can reach that many people with just ONE buy on W—-!”

    Radio salesmen face multiple challenges. But loss of advertisers isn’t just the fault of the station not serving their local audience. It’s primarily the dwindling size of the pool of local advertisers to sell to. Until we understand that business consolidations HAVE to mean business consolidations for everyone, including broadcasters, we’ll keep knocking our heads against the wall, trying to fight the consolidation tide. And as the tide continues to sweep, we’ll all be the poorer for it.

    Liked by 1 person

    • Les, WOW! Thank you for your well-written and thought out comment. I hope that gets others thinking and commenting.

      One of the things you mentioned in terms of consolidation of retailing is that there are less local businesses to support radio through local advertising.

      But concurrently, the number of local stations in small markets has exploded through the use of HD Radio signals feeding translators.

      Less local advertisers and triple the radio stations is a recipe for each radio station to have less revenue to fund a solid, live/local, 24/7 radio operation.

      Sears didn’t get killed by Amazon but by a thousand little cuts — most self-inflicted.

      Radio likewise has been it’s own worst enemy by the decisions the industry has made.

      Thank You for your contribution to this discussion.
      -DT

      Like

    • Joe Jindra

      While it’s true that there are far fewer retailers than 30 years ago, there was not cellular business and hospitals didn’t advertise. Those were two big categories at our former stations.

      Liked by 1 person

  6. Maynard Meyer

    I couldn’t agree more. I love your definition of local radio early on in that piece. Too many radio stations can easily be “transplanted” anywhere. You have to offer something no one else has and it should be local in nature. At our station we think it’s great when we hear comments from listeners that they enjoy listening because we’re unique. The consultants would probably call it “hokey” but they’re not the audience we’re after.

    Liked by 1 person

  7. Dick….I concur with a great deal in this piece. I would say that which I agree the most is that radio definitely needs to go through a serious ‘re-imagining’ process so that it can re-evaluate new and re-purposed ways to ‘serve’.

    Having worked a large chunk of my early years for a station in Mansfield, Ohio, I do have to say, though, that there were consultants, even as far back as the late 80’s, who, perhaps indirectly, did contribute towards removing some of the local ‘flavor’ of our stations by trying to nudge us in the direction of sounding ‘like the big boys’. While it may have certainly been an attempt to groom us to hopefully sound as ‘polished’, I do feel, thinking back on it, that it was also a way to ‘steal’ some of the organic texture by utilizing the same jingle packages, station image-voices, production-libraries, hour-clocks,etc, as stations in surrounding larger markets. In fact, it was a badge of honor to say ‘we sound big market’. That trend, I think, did rattle loose, at least a little bit, some of the local flavor, for fear of sounding like a smaller-market outlet.

    But, most of your points are well-taken. As someone who provides audio content, voice and ‘produced’, for stations around the country, I can attest to the fact that our industry has had a tendency to approach promos and imaging in much the same way that we have since I got in to the business in 1987. This ‘we’re number 1’ or ‘we were the first to tell you about…’ mentality is still really prevalent.

    I’d like to see more veteran radio folks put on their thinking caps and be involved in this ‘re-imagination’ process, rather than continually reeling off the statistics about radio’s imminent demise, or pointing to their smart phones and saying ‘this is what did it’. I think we know what Radio is up against. The question is what can it continue to offer…and how does it offer it….amidst all of this competing media.

    And I keep coming back to LOCAL. I heard someone on one of Akron’s local AM stations say, “Trust us when severe weather hits”. Yes, I still do turn to this station for local information when really ugly clouds are moving in from the east and blowing the trees in my lawn sideways.

    But what about once that storm passes? What will you offer me then, besides Michael Savage and Dave Ramsey?

    Last thought: I was cleaning my garage a couple of weeks ago and I took Alexa out (I know, Alexa…..right?) so I could tune in to one of my client stations out west. I listened for about 90 minutes The stop-sets were INTERMINABLE! In fact, at one point, after, like, the 9th unit, I went and grabbed my wife and said, “Come listen to this station and count the all these commercials!” I mean, I was flabbergasted!

    Later that week, after getting a small order from them, I mentioned that I had a chance to tune in. “Wow, ” I wrote, “some of those commercial sets were pretty lengthy.” And the reply was, “It’s pretty much standard procedure here.”

    True, we’ve been dealing with ‘how to camouflage the stopset’ since…well, since KDKA. (a station I spent 5 years at, by the way!) But this ‘re-imagining’ has to include this dilemma near the top of the list, I think.

    Great topic, Dick. Thanks for letting me contribute….

    Matt

    Liked by 1 person

    • Thank YOU Matt !!!

      I hope others read all you wrote, because you said a mouthful. All spot on!

      Programming consultants came into existence due to the payola/plugola scandals is my understanding. Companies wanted to be sure their local air personalities or program directors weren’t taking bribes to play certain records. They probably pre-date the concept of “Best Practices” which also led to every radio station sounding the same.

      I loved WABC in NYC, but when Rick Sklar took over programming WLS in Chicago too, I wasn’t pleased as this unique “Rock of Chicago” radio station was now a baby WABC.

      I just came through a major market and visited a former PD of mine who’s on the air there. I listened to spot-sets that ran 12 to 15 units in length and when I made mention of this, I was told — like you — that’s pretty much S.O.P. around here (S.O.P. = Standard Operating Procedure).

      So many of the staple services of radio are now better executed by other means. Example: School Closings and Delays. Any student or teacher now gets these things in a text message, email and/or website notice and is not waiting by their radio to hear this type of announcement.

      So the radio industry really needs to not just put on their thinking caps but ask the radio listeners (and people who’ve left) what they NEED, WANT & would ENJOY hearing over their radio.

      Thank YOU again for all the time and effort you put into this topic.
      -DT

      Like

  8. ds52

    WOW! I don’t have any solutions but I am totally in agreement with everything written. As we travel the country the first thing I look for when we arrive in a new location is local radio. The industry, just like the outskirts of cities are cookie-cutter these days. When possible, I use the Internet to go on-line and listen to my ‘home’ stations. (I am currently at the Grand Canyon listening to WAMC Albany). More NPR Stations need to add local talk programming to their format.

    Liked by 1 person

  9. Joe Jindra

    Dick, I agree with much of what you say but unfortunately I wonder if we’re in the minority. Before selling our small town radio stations last year, our internal motto was “give ’em what they can’t get anywhere else” and that was hometown content-hometown content-hometown content and serve it up consistently in steroid proportions. Our stations were a dying breed, a mom-and-pop with an AM, AM translator, and FM. For many years we used satellite to fill the gaps between local elements and still maintained a strong hometown identity. However with consolidation and bankruptcy filings by national syndicators, the quality slipped and we ended up taking both stations off the bird. Contrary to your philosophy, we successfully voice-tracked our 100KW regional station with three downsized satellite radio talent victims by having them talk hometown each break. One time a restaurant client delivered a chicken fried steak sandwich to the radio station after our Dallas based voice-tracker did a shout out to him on the air the previous day. Voice-tracking does work and out-of-town voice-trackers worked for us but they talked hometown all the time instead of generic lifestyle topics. Later we took our AM/translator off the bird with the final straw being some blue humor by a satellite jock on a Sunday morning of all times. In both instances we expanded the music list, not every title under the sun but far beyond the traditional 500 titles that had led to listener fatigue. On our AM/translator we did a combination of live and voice-tracks again emphasizing our hometown in each break. With a limited staff, I had our voice-trackers using their time gathering hometown content from doing local news interviews, scheduling hometown folks to be on our daily talk shows, recording hometown highlight promos from previous aired talk shows, etc. Other than CBS News on our AM/translator, all content was local “giving them what they couldn’t get anywhere else,” consistent hometown content and opinion.

    Liked by 1 person

    • Joe, Thank You for pointing out that satellite programming and/or voice tracking can work well when it’s attended to with the same attention to local detail as the rest of the programming.

      I ran a smooth jazz station that was satellite fed. We brought the air talent to town for the big smooth jazz festival and meet & greets.

      But we focused our local talent on news and information and local artists to make our station unique to its market.

      If you don’t just “plug it in and walk away” you can make this type of programming very effective.

      We did it so well, the network PD flew to our market to see first-hand how we did it.
      -DT

      Like

      • Joe Jindra

        Dick,

        We too brought network air talent to our market multiple times, made some good dollars, plus locked in annual dollars. It was a big thing for listeners with excellent response.

        Liked by 1 person

  10. Dick, Nice post!
    I don’t think retail business will end. In fact its time to reimagine the retail business like your said with technology. Like Alibaba and amazon doing it.

    Liked by 1 person

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