Specialty Retail Blog

As retailers head down the stretch to the finish line of the calendar year, it is important they focus on the fundamentals of retail. Many retailers hire new part-timers for the holiday and at that time, many of the regular staff can get so burned out as to forget some of the key fundamentals. Make sure your staff is asking the right questions, i.e. is the shopper looking for a gift or a personal item? Have your staff members find out all they can about the person who will be receiving the gift so that they can find the right gift and the add-ons that make the customer experience better and the sales greater!

Do not forget about training the staff in the features and benefits of the merchandise. Make sure the staff is linking the benefits to the needs of the shopper or the recipient of the gift. Do not forget to record what you are learning!

Remember that the holidays bring new shoppers to the store and this is your opportunity to make new “customers for life”. Thank you notes and personal calls to follow up the sale are both as important now than ever. You are never too busy to develop new long term customers!

This Letter from Dan Jablons, Management One affiliate in Southern California expresses the holiday wishes we have for all of our clients and specialty retailers.

Dear Specialty Retailer

As the Holiday Season approaches, every retailer out there does something special or unique to attract customers to their store.  Some use incredible decorations, others have wild promotions.  There are also tons of in-store events that happen now.

Certainly our customers do plenty of this, and I am always awe-struck at the creativity and ingenuity that the specialty retailer musters up at times like this.  It’s not easy running a specialty retail business – the unending details alone can be maddening – but when our customers find new and exciting ways to promote their stores, generate excitement in the marketplace, and help their vendors promote their brands, it’s a revelation to me.

It reminds me of why I work in this particular market space.   Yes, I’ve worked with much larger retailers in the past.  And I could just as easily work there again.  But it would not nearly be as much fun as working with the smaller guys.

They make the experience unique, special, and fun.  They treat their customers like gold (which they are).  They fight for every dollar, work harder than anyone else I know, and do more to create joy during the holiday season than their neighbors, who appear to be just “going through the motions.”

So this is my toast to you, my specialty retail friends.  May this holiday season be the best you’ve ever had.  May you continue to grow, flourish, and prosper.  And may your creativity and joy know no boundaries.

All the best,

Dan Jablons
Retail Smart Guys

By Evan Wise

Managing Director- Management One

Every store has good times and bad. When the tide is rising it is easy to be lulled into the belief that you are really doing the right things and making the right decisions. Too often that leads to complacency that translates into a lack of vision, creativity and experimentation with new ideas.  After many years of a great retail environment, many retailers began to suffer from that rising tide mentality. The recession brought a new reality to retailers and forced them to rethink their business on many fronts. Customers are tired of the same thinking, designs, promotions and shopping experience and with fewer dollars to spend, are being more critical about where they spend them.   The time is ripe for a new creative and exciting retail idea.  Where is that idea?

Actually it is locked in the minds of your staff. It is up to you as the leader of your business to create the environment that allows that creativity to surface.  Unfortunately, most organizations stifle creativity due to competition, hierarchy and a fear of being wrong.  Ask any kindergarten class of 30 five-year-olds for a show of hands if you can dance and 30 hands go up.  Ask 100 adults in a group who can dance and 5 hands go up!  What happened to the willingness to have fun, take risks and just dance?

Now is the time to try new things and create new options. Now is the time to hold that promotion that is way out there. A furniture store in Chicago had a promotion that said if the Bears were shut out the next weekend, all purchases during the previous week would be free. Sales soared! The Bears were skunked. The insurance company the retailer got to insure the venture paid off big time. The publicity shot the store to the top of the mind of many new furniture shoppers.  What have you done differently and creatively in the past 60 days?

Management One^® affiliates brainstorm ways to find new ideas. The difference between excuses and reasons is the difference between success and mediocrity. Unfortunately too many retailers find excuses:

• The weather was too cold or too hot
• The snow kept people in the mall
• The price of gas keeps people from shopping
• The fears about the economy are hurting business
• And my latest favorite; the water in the ocean is too cold so surfers are not shopping

What makes these excuses instead of reasons is that there is nothing that YOU can do to control the weather, the economy, the water temperature or the price of gas.  REASONS are things that are within your control.  You can do something to make them better.  Training, creative thinking, aggressive promotions, buying with more style and better management are all part of taking responsibility, planning for success and making success happen in your business.

Customers are desperate for a new and exciting shopping experience. They are anxious to find new and exciting merchandise.  They want to find a relationship and a comfortable place to call home with an environment that is unique and inspiring.  All you have to do is provide it, get the word out, and motivate them to come in and see for themselves!  Management One affiliates help stoke creative thinking  but however you accomplish it, your success depends on it.

The secret I will share is to make sure your staff is having flops and making mistakes.  Without the ability to do that, they become so conservative and cautious that they simply will not get out on the floor and dance!  Your customers want to dance and if they can’t do it with your staff, they will find the retailer that is playing the music they like!

The holiday season is upon us and as retailers scurry around to make the most of the traffic and shoppers while they are there, I thought back to what the holiday season was like when I was young. The memories may remind us of what we’ve lost and maybe what we might regain.My father had a men’s store called Art’s Men’s Shop in a small town. Everyone in the family pitched in on the floor during the holidays but my father especially spent long hours completely engrossed in the business. That dedication was key. His focus and drive was the motivation for everyone at the store to put in long hours and work harder to make the holiday season a success.

Holiday shopping was about seeing decorations, walking around to take in the Christmas tree in the town center, the lights and the attractions like Santa, elves and carolers. The windows were full of creativity with each one being more fun than the next. Shopping was a part of the season’s excitement and fun as the total experience was created. It was not about discounts and promotions as that never occurred until after the 25th.

During the holidays, it got dark early, the skies were always overcast and the temperatures were cold in the suburb of Cleveland where I lived. Even so, people had smiles on their faces, they had extra patience and a cheery attitude to match the season.

As we all work hard to make this season successful, let’s not forget the little things we do each day to enliven our staff, offer shopping fun to our customers and create a holiday season full of excitement and joy.

Retailers are entering the fourth quarter with many significant and important questions. The way they respond to these inquiries and respond to the circumstances will dictate their success. Three of the most fundamental questions I see are:

1. What will traffic be in the store?
2. What will sales be?
3. What will margins be?

Let’s apply some logic to see if we can find some likely answers. Many people have lost their jobs (~10%) and even more are underemployed (~17%) which means they are making less money than they did a year ago. All these people will not be taking vacations or spending a lot of money on entertainment like they did before. We are talking about one out of six people; the losses cut across all income brackets from laborers up to executives.

Even with lower credit card limits, tighter credit and less home equity as financial supports, for the most part, these people will not ignore the holidays and will be shopping for gifts. The probability is that they will be looking for less expensive items and bargains this year in addition to the special gifts they buy at regular prices. The best news is there is a form of entertainment that they can still afford and that is shopping. Look for the store traffic to increase this holiday season which is good news for retailers. Keep in mind that now, more than ever before, the more entertaining you are, the more traffic will be searching you out.

Those who have less discretionary income are joined by many others in worrying about what lies ahead. On the positive side, the stock market has run up nicely to about where it was at the beginning of the year. That has released some pent up demand among the 73% of the population who are fully employed. That means there will be a demand for full price goods but also a pull for discount, off price and lower price point goods as well. Balancing the inventory mix will be tricky. No one knows when discounting will begin and how brutal it will be. That means this season your inventory planning, balance and flow is as critical as enhanced selling skills will be to determine your success. With traffic up, conversion rates could be the main dashboard components on which to focus!
Margins are the big unknown this year. It is a question mark whether the chains will pull the trigger on markdowns early again or whether they took a big enough beating themselves last year to buy more prudently and be able to hold the line on discounts. We have been working hard to find ways for clients to boost margins in the face of uncertainty and the moves are working. Certainly the Margin Buying Service is a great key for women’s boutiques to boost IMU to 70% and increase turns at the same time. The holiday suit promotion was a similar opportunity for men’s. More prudent markdown strategies are needed this year to keep up the MMU. There are opportunities out there but retailers must be aggressive to grab them.

There are a lot of other situations and circumstances that will affect retailers – from the scarcity of certain goods to a scarcity of credit available to buy them – but these three stand out as critical. The unknown factor is again extremely significant this year so be adaptable, flexible and keep listening to your market and to your affiliate. These will be the keys to your success.

Happy holidays and good luck!