Retail Makeover: Barbara reviews product mix in Debbie's store

Hello all!

I am new to this website, but wanted to introduce myself and my company.  My name is Dan Jablons, and my company is Retail Smart Guys.  Here's our website: http://www.retailsmartguys.com.  We provide incredible open to buy planning for retail stores, and we are already working with many gift and home stores.  We'd love to help more stores with what we're doing, as we're already getting incredible results.  Our customers are getting sales increases, better gross margins, and faster turns.

If anyone is interested in this, we will proceed by giving a free analysis.  We'll analyze your inventory, sales, receiving, etc., to determine how much cash could be generated if you were on our open to buy platform.  One of the most basic principles of our system is this: we make sure we pay for ourselves three times over each month.  So we want to make sure we are able to generate that in your business before we even start!

Open-to-Buy is great for businesses with vendors who ship quickly and can pinpoint delivery with consistent terms.  It works great for businesses whose monthly/weekly/daily sales are predictable.  It is a super system for companies who can give the system full-time attention.

In other words, for the Independent Retailer, Open-to-Buy sucks!

I've looked at a half-dozen OTB methods, none that I could ever get to apply to my business without spending more time on that than I spend writing actual orders.  Too many vendors with different terms, different minimums, different seasonal needs, different availabilities.  If I tried to run LEGO on an OTB, we'd be OOB (out of business).  I sell it all in December, but if I don't order it to arrive in August, LEGO will be sold out and I'll get nothing.

Instead of an OTB, we followed these three simple principles this past year that gave us the results we wanted.

Great Back-Stories Makes Buying Fun

 Great Back-Stories make buying fun.  What's a Back-Story?  It's the story behind an object or product.  In your home it's the objects that family and friends are drawn to.  The objects that stimulate questions as to their origin.  And, you immediately begin relaying the story behind the item . . . its history, who gave it to you, where you purchased it.  Did you find it on vacation?  These Back-Stories then become the Front-Story.

I usually advise retailers looking for merchandising to imagine their typical customer walking through the front door of the shop.  Is the shopper male or female? Under 20, over 40, or perhaps over 60?  What income level does the customer fit into?

This exercise helps you select items that have the right sense of style, and the right range of prices, for your target demographic. It also helps you select the background music for the store, and where you advertise. We would not, for example, play hip hop in our shop (although I do enjoy the rhyme) or advertise regularly in the student newspapers here in Madison.

The economy is improving! The economy is improving!

You know, I believe that. The LA Times business page reports that there is a trend back to brand name buying. Of course, they're talking about the likes of Kellogg's Frosted Flakes vs. Safeway's Soggy Flakes but there's a lesson those of us who are retailing something other than oatmeal and toothpaste can draw from this.

And here it is. Don't swing too far to the generic, the mundane, and the cheapy products that appeal to the bargain hunters and bottom feeders. When the economy really starts ticking up you won't want to have given up your market share for Yankee Candles (as opposed to paraffin blobby stuff). You'll also want to send the message that, although you are offering specials and new budget-conscious services, you still believe in and stand up for the products you've always recommended. Not because they are expensive (or inexpensive) but because they give value. Always have. Always will.

I know this post is short but sometimes that's the length of the sweetest messages. Right!

PS: That upward trend news is based on earning reports of big companies that specialize in brand names like Proctor & Gamble and Colgate-Palmolive.

-------

Now that the last trick-or-treaters have long since headed home, with visions of candy corn dancing through their heads, it’s time for visions of sugarplums to start taking their place.  For many specialty retailers, the start of November means the start of the holiday season.  

You need to be thinking of the holidays now even if you are not going to put your Christmas merchandise on display yet (and customer do complain that it comes out earlier every year, even though the timing for most stores hasn’t changed much over the past decade or so).   Here is a check-list you may find helpful:

You've heard the usual doom and gloom.  The economy is in the dumps.  Dun-dun-dun.  Womp womp. 

But economists are changing their collective tune as of late.  Retail sales dropped by 1.5% in September after a 2.7% sales surge in August (inspired by the Cash for Clunkers program) took place (cnn.com).  At first glance this sales drop seems negative, but the silver lining is in the numbers.  The sales drop following the previous month's rise in sales was relatively low in comparison to other post-surge months during the recession.  Could it be over?  Is the sunshine finally burning through the clouds?

If it is, it won't happen quickly.  According to iStockAnalyst.com, "federal debt and unemployment will hamper the nation's recovery."  The National Association for Business Economics recently released the findings of its October 2009 Outlook Survey:

Tough economic times often call for tough decisions.  Independent book seller Jan Loveland has experienced this firsthand.  She's closing her small bookstore, Cranesbill Books, at the end of the year.  ''I think that the small ... bookstore/gift shop is going to be a rarer and rarer thing to find,'' Loveland said.

Barbara Crowhurst
Retail Makeover Industry Expert

Latest CD and e-BOOK Download