Specialty Retail Blog

I just got off the phone talking to new business owner.  She told me, “ I
want  to make the right decisions from the start.”  The importance of making
key decisions correctly to get the new business off the ground is never more
important than in the months BEFORE the store opens. Many new retailers buy
way too much of the wrong merchandise and never get out of the hole they
create.  I have even seen the grand opening marketing paint a different
external perception than was evident in the merchandise and operation.
Enthusiastic customers were quickly turned off.  Everything must be focused
and consistent as you never again have the chance to make a first impression
on as many people as you do your first month. The mistakes you make early
can linger for a long time.  Having a well defined direction and strategy is
critical for success.

I’ve even talked to a number of experienced retailers whose efforts to
improve their business are lacking a well defined strategy. They lack a
methodology for defining their goals, measuring improvement and then
gathering feedback on what they attempt. That approach introduces waste into
their efforts to grow their business and blurs their successes into their
failures. Consider the toll a lack of strategy places on marketing efforts.
Questions like “Who is the target of a campaign?” “What is the message?” and
“What are the definitive goals?” are frequently never addressed or
understood before spending $1000 on an ad in the Sunday paper. Too often the
importance and  value relative to the cost for social networking and email
contact are significantly underestimated. The result of this lack of
information is, ultimately, lost opportunities and a correspondingly
diminished ability to adapt and improve.

Without a solid understanding of the target customer, the desired image they
should have of the business and ideal merchandising and sales techniques to
solidify that image and close the deal, what could be profit is squandered
shooting at a target that isn’t clearly visible. Effectiveness is diminished
across the business. Nearly all aspects of the business are impacted
negatively; assortment planning lacks a consistent theme, choosing the right
goods is not focused on the target customer and identifying  what skills and
traits are needed as part of the process of hiring a new employee is
neglected, leaving a weak staff. The list of actions that can benefit from
decisions based on  a clear direction and strategy is long.

In Management One there is a strong underlying theme that growing a business
is paramount. Growing a business means getting the most return on the
investment in inventory WR (Winning@Retail), people WB (Winning@Business)
and cash WF (Winnning@Finance).

We start with W@R for retail clients because it is easier and the return is
faster. Owners can identify with it. The reason for starting on merchandise
planning and Winning@Retail before W@B is that it allows us the chance to
pick some low hanging fruit while helping businesses ramp up for the slower
yet critical process of changing culture and practices.

When a retailer has only one eye to watch his business, strategically
focusing that eye on continuously improving the bottom line is critical.

You are set apart by “how” you conduct yourself. Today whatever product you make or service you offer can quickly and easily be copied and sold by everyone anywhere.  But HOW you do your business and how you keep your promises and how you relate to customers, colleagues, suppliers and the communities in which you operate are much more difficult to copy if you are doing them well. That creates an opportunity for sustainable differentiation”  Hot, Flat and Crowded by Thomas Friedman page 322

As this year draws to a close and the holidays are upon us, it is a time for introspection and analysis.The New Year brings new challenges, opportunities and a different playing field.  The New Year is not only a time for resolutions but also a time to rethink strategy and what you mean to your customers, colleagues, employees and community.  That will define what you mean to yourself.

This paragraph from Thomas Friedman, quoting from a book by Dov Seidman, captures a core value that we have built our business upon. We deal with entrepreneurs and independent businesses. We are entrepreneurs running an independent business like our affiliates and clients. The relationships we have with our affiliates, our clients and our community are what define not only our business, but also us as people. Truly compassion has been as important in our decisions as cash for the past 20 years. Fairness has always been more important than profit.

Our focus on independent retailers allows us to work with people that define themselves by the service and relationships they bring to customers.  When they are successful they can retire, send kids to college and provide for their family so the results are very meaningful to us and to them.  Our business has always been based on dealing fairly and honestly with all our affiliates and clients and we focus on their success rather than ours.  When we help people grow their business and manage it effectively, we don’t have to worry about our cash flow or profits. We have always operated that way for the past 20 years.

Thomas Friedman clearly defines that as a sustainable competitive advantage.  Developing solid relationships and proving time and again that you will treat everyone fairly is not easily copied. It takes years of sincerity and consistency.  It requires compassion that is not easily manufactured.  The one saying that we have always followed is that No one cares how much you know until they know how much you care.

As we enter the New Year, take the time to evaluate what you mean to your staff and customers. Re-focus your efforts in the direction that you want to achieve and work every day to get there.  You will not only make this a better world, you will make a better life for you and others.

Happy Holidays and all the best wishes for a healthy happy New Year.