Specialty Retail Blog

Have you ever read about pivotal moments in history where people say, “This was the best time to buy” because a market had bottomed out and was starting to rebound.

In the past few years, this advice has frequently been given regarding real estate.  But I think it also extends to retail.  And I believe that RIGHT NOW is the time to map out a growth strategy.

Many stores have closed their doors.  Others have contracted, leaving market segments or territories open for those who can capitalize on the opportunity.

A retail establishment grows  via one or more of the following methods;

1. Gaining additional market share
2. Gaining additional territories
3. Adding Product Lines

We are advising all of our accounts to review the above methods and decide on areas where they can grow their business.  Sure, things are still tough out there.  Yes, I believe Spring 2010 is going to be a challenge.  But if an outlet can get through that (which we are helping our clients do via better marketing, improved cash flow and great open-to-buy planning), then they will  be able to grow an amazing business from the seed of the present opportunity.

This economy has had us all worrying, contracting, suffering, weeping, struggling, and enslaved for far too long.  The time is ideal to do something proactive, something spectacular, something bold, and something that will carve a mark in the memory of customers and competitors.

Dan Jablons
Retail Smart Guys

Affiliate Cathy Wagner (Chicago), president of Retail Mavens, has been invited, along with other industry experts, to present a seminar at the upcoming ASD/AMD Las Vegas retail show March 2. Cathy will speak on “The 3 Secrets to Increasing Retail Sales and Profits in the next 30 Days”.

Alan Roseman (San Diego), president of Strategic Results, is leading the Surf Expo Merchandising Course, along with Marc and Evan, at ASR in San Diego on February 2. The daylong agenda will include training in planning, finances and other issues critical to retailers. This is the same format that was presented for the Board Retailers Association by Neal Esserman (Jacksonville, FL), president of Retail Consulting & Planning, and M1 last year.

The biggest challenge in your business is listening. Being skilled in effective listening can boost your business and personal success. When owners learn the technique of effective listening and use it every day, they open themselves up to new ideas and realizations that would never have surfaced had their minds been shut to other voices. The members of your staff are on the front line of your business and have their own ideas of what is working and what is not. Their input gives you a clearer picture of how your methods are working. Completely new and innovative paths may also be discovered that may not have occurred to you.

Not only is it important to listen to the people who help support the business and make it thrive, it is essential to listen to your customers. There are more ways of listening them than just having conversations. What they buy, what they don’t buy and when they make particular purchases is vital information they are conveying to you. Knowing how to glean, organize and analyze that intricate data is the next step. You should be sure to keep an open line of communication with your customers, both the satisfied and the unsatisfied.Their message is often not verbal. So do chat directly but also perhaps find other creative ways to hear your client base.

“Your most unhappy customers are your greatest source of learning.” - Bill Gates, founder of Microsoft

Adapting will continue in subsequent Informer issues with various topics of how the recent changes in the market, economy and retail world are affecting your business. This is the second of the series by Evan Wise.

The hub of retail is moving out of the malls and into the streets. The recession has caused unemployment but the shoppers tend to be those who are employed, retired or otherwise minimally unaffected. However, even these shoppers can be more hurried and harried as the recession has caused most businesses to cut staff to the bone which puts more pressure on the rest to spend more hours, be more productive and work harder than ever before.

We value what is scarce and, because of the recession, it seems time is among our scarcest of possessions. The scarcity of time has put a greater value on convenience, availability and simplicity in shopping. A strip mall where a woman can take the dry cleaning to be done or have her nails manicured and can buy items for her wardrobe within 50 yards can be a huge convenience.

Other retailers have found ways to use their stores as bases and then move their sales influence beyond the physical location. Everything from bringing a wardrobe selection into an office to internet sales can move the boundaries to a much wider circumference and can make the shopping experience faster and more convenient. E-mail, social networking and even the phone extends your boundaries to expand your business. Now is the time to brainstorm ways you can make your store more available and easier to shop.

I was amazed while reading some statistics that 63% of Americans are concerned about the swine flu but  over 60% say they haven’t received the vaccine and do not plan to get it(ABC NEWS POLL).   That means 23 % of the Americans are worried about their health being jeopardized by a pandemic disease yet they don’t plan to be bothered to get a vaccine that costs $18 to prevent that disease.  Another 37% are not concerned about a disease that the best and brightest scientists have identified as a potential pandemic and threat to a significant number of Americans (according the CDC, to date 50 million Americans have contracted the swine flu virus and nearly 10,000 have died).

Since we deal with independent retailers, I obviously thought about the huge implications that statistic has for those retailers to whom we provide merchandise planning and OTB budgets for each month. Understanding this new retail environment is truly an enigma wrapped in a conundrum as Dennis Levine, one of our affiliates would say.  The statistics above prove that point.

The big challenge a retailer faces every season is finding the right lines and items that their customers will be motivated to buy.  If 20% of the people are not motivated to spend $18 on their own health and well being even if they believe it could be in jeopardy, and another 40% are not motivated by what many would argue are the obvious facts, the ability  to motivate customers  to buy the merchandise they pick  is an enormous task.  Fortunately the buyer usually has some great sales people to close the deal but that hardly absolves the buyer of significant responsibility for success.

The research that a buyer must do to accurately and profitably invest the company’s funds and make a profit is daunting. The two aspects of knowledge with which every buyer must enter the market are what will the customer buy and how much will he buy. Even the government only needed to predict demand in ordering flu vaccines!

Merchandise planning always begins with accurate forecasts of demand for each classification of merchandise in the store. Sales will happen when that demand is met with desirable merchandise and an effective sales force.  Once you know the demand (or, with the government example, how many people will want the flu shot) you can then determine how much inventory you have, how much of it is effective, how much additional inventory  you will need and what you can spend on it.  That gives your OTB budget.

The buyer must then be adept at assortment planning. This is where a good POS system can help document the lines, sku’s , colors and fashions that have been selling.  Just like your stock broker tells you, “Past performance is not necessarily an indicator of future sales!”,  a good buyer must be on top of the market, fashions and trends. That means hanging out where your customers hang out and watching what people are wearing.  Predicting the next trend is always a gamble but understanding your customers taste levels is a necessity.

I guess a buyer that gets the best merchandise planning along with OTB information and does the best trend analysis and assortment planning should be able to satisfy as much as 40% of his market. After all, that is the portion of the market that is motivated to get a simple shot to prevent a life threatening disease from attacking his body. That really makes it clear how little room retailers have for error in the current retail market and how important getting the right information on which to base decisions will be.

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.

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.

Adapting to a New Reality will continue in subsequent Informer issues with various topics of how the recent changes in the market, economy and retail world are affecting your business. This is the first of the series by Evan Wise.The recession has had a profound impact on your customers, your vendors, your employees and the entire business community. Your success will depend on your ability to read these changes and adapt to the new reality quickly, creatively and effectively. The first requirement is to be able to identify the new emerging trends. Over the next several issues, I will try to point out the various trends that are being impacted and propelled by the many recent changes. Prudent retailers will be able to assess how these trends have affected their business and more importantly, how they will assess their own situation and decide how to take advantage of the changes. Your comments will not only be welcome, but they will be important feedback during this time of considerable flux.

The independent retailers’ great advantage has always been that they are closer to their customers, and thus better able to understand them than the chains and big box stores. That advantage is more important now than ever. With the understanding of the sales pulse of his clientele, a successful retailer can take that knowledge to market and find merchandise that attracts his customers and keeps them coming back. Chains and big box stores count solely on megatrends to compete and cannot match the independent’s ability to surgically target the market. That precise approach is why independents command higher price points but they lose the battle of markdowns and promotions.

The recession has spawned a trend for customers to be more skeptical which means that the trust that existed in the past and was a key to independent retail success may be questioned. New trust will be more difficult to achieve. Customers are more willing to explore different shopping venues. Trust and loyalty both are more tenuous when the customer is fearful about his own future. The need to develop trust and strong relationships has always been the cornerstone of independent retail. It presents itself now as a fierce challenge but its importance has never been stronger. Trust must be the foundation for everything from marketing communication with customers, dealing with employees, creditors and local vendors.

As an independent retailer you must be more creative in providing the right price, selection, service, policies and experience for your particular niche in the market. What are you doing to demonstrate your values, the trust you place in your customers and how they see that in the shopping experience?

James Hallman’s (Atlanta, GA) client, Sole Shoes & Accessories inAtlanta was named 2009 Best Shoe Boutique by Atlanta Magazine. Cathy Wagner’s (Chicago, IL) client, My Favorite Toy Store, was on NBC Nightly News and her client G Boutique was featured on Oprah.