Four ways to find success in the world of retail, according to Target Australia’s new boss Guy Russo

“Kmart is a ‘bottom of the food chain’ business”: Kmart boss Guy Russo tells it as it is

The world of retail might be more complex and challenging than ever before, but businesses still need to get the basics right if they are to flourish, according to the new boss of Target Australia.

Guy Russo, the former managing director of Kmart, has stepped into a new role this week that gives him not only responsibility for managing Kmart, but its sister business Target as well.

Russo is renowned for having transformed Kmart from a retailer that was on the brink of collapse to a thriving department store chain.

Last year, Kmart recorded annual revenue of $4.6 billion.

Speaking at a breakfast hosted by the Retail Doctor Group in Melbourne this morning, Russo said he turned Kmart around by getting back to basics.

The department store executive also sounded a warning to his competitors now he is in charge of both Kmart and Target.

“If you are a competitor of mine, you are in trouble,” he told the crowd.

Here are Russo’s four tips for retail success.

1. Always smile at the customer

Russo says he has spent a lot of time and energy making sure staff treat customers well.

“Just get the logo to face the customer, get them to smile at the customer,” Russo says.

“Love them. Because they don’t need to buy one thing in Chadstone. I know you all shop at shopping centres, but I’m telling you – you don’t need anything that we sell. So if someone walks in, smile at them and while we’re a self-service business see if there’s a way we can help them.”

2. Accept you don’t know everything

At the breakfast, Russo told a story about how a few days into his job at Kmart he was asked to meet with the women’s team in order to sign off on a new line of underwear.

This involved having to touch the fabric and comment on whether it was suitable for consumers.

“In my first 100 days I really thought, ‘what the hell have I got involved in’,” Russo says, pointing out he can barely dress himself let alone decide what the women of Australia should be wearing under their clothes.

However, it was simply longstanding protocol.

“I needed leaders with no egos who would say to the women’s team, ‘no, that is not my area’,” he says.

3. Empower your staff to come up with their own solutions

Russo says he is not a huge fan of using consultants.

The people with the solutions to a business’s woes, he says, are the ones that work in-store.

“I had all the consultants I wanted,” Russo says.

“They were in the building, they were in the stores. When I asked what was wrong – with customers, suppliers – my team knew what was wrong.

“It was about giving space to allow them to come up and say what’s really wrong.”

4. Increase volumes so you can reduce prices

Russo says retailers need to get a basic formula right and not stray from it.

His number one tip for boosting profits? Buy in volume.

“It allows you to lower cost,” Russo says.

“And if you can lower cost, it allows you to drop prices. I’m happy for every retailer in this room who is my competitor to know that’s the formula. It ain’t that complex. Buy volume.”

As a result of these changes, Russo said Kmart sold 860 million products to 3 million people last year – up from 300 million items to 1.5 million customers when Russo first came onboard in 2008.


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