Specialty Retail Blog

Messengers of doom and gloom are dominating the air space and permeating conversations in businesses large and small. They say the economy is reeling and many business owners are in a state of panic. Change is occurring. Management One® has always professed that in order for businesses to flourish, management needs to respond to change by focusing on what you can control and utilizing your assets and resources to their fullest advantage.

True, the changes that are presently taking place are huge and sudden, but that just means that the measures to deal with them need to be well thought out and effective. Now, more than ever, it pays to not be buffeted about by circumstances but to take charge and grapple with the situation and the future with the help of the experts of change, the team of Management One® affiliates.

This situation promises to exist for years and as such, hunkering down to weather the storm won’t work.  You must take definitive action to position your store as the leader for the future.  For example, James Hallman has been sending out positive e-mails and ideas to his clients in addition to the challenges he presents to them at their monthly meetings to stay aggressive. A passage from one of James’s messages makes a poignant point:

“I know that, like me, you feel fortunate that none of our friends, neighbors and countrymen will ever be satisfied with a cave for shelter, an animal hide for clothing and a hunk of raw meat for food. As long as that is true — we will do business.”

Ed Cloeter (Detroit) also relays his years of experience and retail wisdom to his clients with continued messages. He recently relayed a tale to them that he recalled from when the country was undergoing a drastic economic downturn in the past:

A little fellow parked himself on a busy intersection and began selling hot dogs. Sales grew so he ordered more hot dogs and buns. The little man had a son who came home from college for a holiday break. The son was studying for his B.S. in Business. The bright lad saw all that his dad was ordering.

Astounded, he barked, ‘Dad, don’t you know how bad the economy is? You’d better cut back!’

The little old man hung his head and listened to his son. His son was, after all, echoing the gloom and doom of the day. The dad cut back his orders and, sure enough, sales dropped. Occasionally cars would stop but would pull away when they found there were no more hot dogs. The man scaled back more. Soon the man, the cart and the hot dog business were gone from the corner. The son was right.

It’s clear from the simple tale to see that faulty logic can lead to unacceptable conclusions. Instead of panic and retreat, business owners need to remember that there is still a market out there. Those who have the know-how to maintain the connection and the attraction to their business will be able to keep their heads above water. Your store, your customer and your situation may all change but you need the right strategy to succeed with the new dynamic!

The Management One® affiliation of consultants and clients has been sharing ideas and actions that have succeeded in overcoming the recent obstacles. In addition, M1 is armed with valuable knowledge of what is working through its giant network of hundreds of retail clients across the United States, Ireland, England and other countries. Information, motivation and accurate forecasts of the market are key elements to remain in today’s marketplace. Advantages available to M1 clients, such as Margin Buying Service, are a great help in providing an edge to success and even survival. For those who simply try to “ride out the storm”, there will be fallout and many carts and businesses may disappear from the corner.

What is your strategy? Remember — hope is not a strategy. Take control and take action! The strategy and subsequent tactics you employ today may mean the difference of whether you will survive this economic environment or be one of the casualties.

Discuss your situation with your Management One® affiliate. If you are not already a client, contact Management One® today for a no-obligation meeting with an affiliate in your area to see how your business can take action to survive and to thrive: www.management-one.com.

 A great article about the strong performance of Urban Outfitters

When you started in business everything was new and exciting. Problems were challenges to be overcome.  Everything worked just fine on paper. Everything worked just fine on paper. 80 hour weeks were necessary but fun. You called the shots and managed every crisis that came along.  Then the business grew and customers multiplied. So did the challenges.

You soon found that planning was not the only key to success. Business is not always fair so regardless of the fact you worked the hardest and had your money invested, it was you who went without a paycheck when there was no money. You found that as owner, sweeping the floor and emptying wastebaskets was not beneath your status or dignity.  Now that you have some experience, the challenges have turned to battles to be won. Big ones and little ones, easy ones and tough ones, everyone wants something.

In order to get some insight into how to win these battles, there is no better group to model in battle than the U.S. Marine Corps. They are arguably the premier fighting force in the world. They train constantly for the day when they are thrust into battle. What have they learned about winning the battles from which you can benefit in your daily business battles?  Here are a few of the most valuable lessons.

The foremost lesson is to identify your target and develop a plan and strategy. That allows you to get all of your assets in place before you start firing randomly. A plan lets you assess the skills needed through training, reorganization or hiring staff or a consultant or expert. The marines know the objective in clear terms before they hit the ground. Marines know they are there to take a hill, capture a city or squelch an uprising. You should know your target too!

Another lesson is to decentralize. The marines realized that targets must be set and plans established but the field officers need the flexibility to make decisions that achieve those targets.  Officers measure effectiveness and results.  They don’t try to manage from the top.  By the time a tank commander can gather situation data, send it to headquarters for analysis and a decision, receive the orders back and then take action, the opportunity to win the battle is lost. There is too much that happens spontaneously to manage from the top. The same situation exists in most businesses. There is so much happening with customers, inventory, equipment etc that employees need to know the target but be free to make the best decisions on the spot in order to with the battle.  Even a small business needs to decentralize!

Thirdly, you don’t win the battle without acting. Don’t let paralysis by analysis keep you from developing action plans and taking action to implement them.  Often timing is more critical than planning.  Staying focused on what you want to accomplish lets you decide which battles, opportunities and options can move you in the right direction.

Next, use experts and intelligence to gather the best direction and information available. The marines consult with locals and military experts. They use consultants to help them draw from a broad perspective of ideas. You must make the final decision about your business but don’t ignore the wealth of options and intelligence that can help you make the right decision. Two lessons here,

1.      Don’t be too proud to seek outside advice

2.      Get the information and advice to the whole organization

Know the exit strategy before you go into battle. The marines identify exit routes and extraction procedures before they enter a situation.  Search and rescue is as much a part of battle as attack plans. When you evaluate an option, evaluate what happens if the unexpected happens. Know the way out. Know the downside as well as the upside.

Finally, focus on critical not urgent items. An outside consultant, board of directors or knowledgeable mentor can keep your efforts directed toward winning the war, not just firing your weapons! We us a process called Winning@Business™  to help owners win the business battles.   Winning the war and winning in business have many parallels.  In the end, however, you can bounce back from a failed business.  Too often a failed battle does not give one that option.

Hopefully all the stress and worry has not taken all the fun out of your business. One of the more challenging aspects of retail is that there are always payables. It is also a great motivator to drive business. This creates constant pressure to generate revenue and thus the stress to excel.

When looking at how our business performs; we look at product, people, presentation and marketing. One thing I rarely hear is “Are we having Fun Yet?” When I walk in to a store I get a feel for the atmosphere. Is it too quiet? is the music upbeat, soft, too loud, etc. I also get a feel for the energy in the store. If that energy is positive, it can be contagious.
That can translate into dollars as customers become more willing to spend time and shop.

That energy also translates into how sales associates perform. A positive attitude goes a long way to influencing potential clients into getting involved with your product. People buy from people they like, and when you are up and happy you put yourself in a position to win. When you are negative, dour or depressed your performance level is going to diminish.

One of the morning talk shows recently had a psychologist on and she said that research showed that the average person has 60,000 individual thoughts per day and that in a high percentage of people, 80% of those thoughts are negative. That was a staggering statistic. It seems like the deck is stacked against us from the beginning. However replacing a positive thought when you feel a negative thought appear can be the beginning of making a difference.

We have a choice to be positive. When a situation occurs, like a return, we can smile and recognize this is an opportunity or we can be depressed and make the customer, those around you and your self miserable. The opportunity is that the return is still traffic in the store. Take it back with a smile and maybe you will resell something else or make a customer for life. A retailer in Texas recently shared this example. A person brought in a shirt that she had purchased at another store. The retailer did not carry that brand but had a similar product. It was not even a customer that had ever shopped with him in the past. He took the return and made her into a customer, FOR LIFE! After that return this customer has become a client and has spent over $18,000. Imagine the goodwill he generated and how many potential positive stories from that customer were repeated to her friends. We all know the best advertising in the world is word of mouth.

Here are some ideas to injecting some fun into your business:

• Start each day by setting the tone of the day. Huddle with your staff and share success stories. Start the day with positive self talk. We are going to have a great day.
• At the huddle, challenge each other. Have a little contest, the first person to sell xxx, gets an extra half hour lunch break, or a candy bar, or something fun.
  Play games, Get the customers involved.
• Break up displays and redo them, share ideas, create some excitement in the front of the store.
• Before the store opens crank up the loud speakers with music that gets you moving. Music can be a great motivator.
• If you have XM or Sirrus or some comedy CD’s play them while you get the store ready to open, and start laughing.
• Brainstorm your own list of fun things to do.
• Hire people who like to be with people and who like to have fun. Let go of the downers because they bring everyone to their level and lower everyone’s expectations.

I realize that retail is serious business but life is worth living and for the amount of time you spend in those 4 walls there is no law that says it can’t be fun!

Let the good times roll…………

Marc

Is there any good news out there? The Press has been pounding us for months now about the impending recession, the collapse of the real estate market, a stock market that is playing a game of yo yo everyday and the price of oil that continues to rise. Oh and the dollar continues to shrink in value.

The converse of this bad news is that the drop in the real estate market has opened the door for first time homeowners. In Missouri for example, in 2007 the state provided over 300 million dollars to help over 3,000 first time homeowners. When there is a bull market and inflated real estate values, the savings rate drops. As the market has begun to adjust and real estate values have fallen, the savings rate in the U. S. has actually started to increase from .04% of disposable income last year to .08% this year and that number is expected to rise. The drop in the dollar improves our ability to export our goods and services and tourism from outside the United States increases and they are happy shoppers. Higher oil prices are responsible for an increase in the sale of fuel- efficient cars, and that translates into an improvement in global warming and investments in new technologies.

The point is that that there are 2 sides to every issue and more importantly, if we believe the pessimism we read then we might as well put a fork in our business and call it a day.

Maybe the aspirational customer, the ones who reached beyond their station in life to buy luxury items has diminished, but there are new customers out there and good core customers that can be developed. Generate a list of clients that purchased over a specific amount for 2007 and compare to the same criteria for 2006. Who spent more, who spent less? This is a great way to begin 2008. Get to know the customers who really support your business. Now. develop a strategy and tactics for each one. Think about how they can help you grow your business in 2008.

Think outside the box. In retail that means think outside the 4 walls. That does not mean your business is going to be saved by e commerce. That is a topic for another article. However, it does mean that there is a lot more business out there if you move out of your comfort zone.

What events do you have planned for 2008? What are you doing to energize your staff? What are you doing to excite your customers and keep them involved? Do you have Game days? Fun days? In store seminars? How does your referral program work? Do you measure your marketing against the traffic it drives into your doors?

Remember the excitement you felt when you first conceived of having your own store? Remember all the reasons you wanted to be in business? Write those down in bullet points and see if you are measuring up to those early expectations. Renew your vows with yourself.

The New Year can be as great as you want to make it. However, if you read the papers and believe the doomsday pundits you will start to create your own retail demise. There are buyers and sellers. If you buy into the bad news then you lose control and allow outside influences to impact your thinking and that in turn will negatively effect your results. If you are a seller then sell yourself, your staff, your community and your customers on the opportunities that still surround you. As in Acres of Diamonds, the real gems are in your own backyard. Go dig `em out!

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By Marc Weiss