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January 2010
Are we seeing an economic rebound?
In the final weeks of 2009 some retailers enjoyed a real boost.
Consumers streamed through their doors and actually spent
money. No, it wasn't a tidal wave of customers, but it was far
better than retailers experienced in the final weeks of the
previous year. With effective inventory management and improved
pricing strategies, there were retailers who even saw bottom-line
profits.
Although high unemployment and other economic issues persist, it is
likely retailers will see positive sales numbers in the coming months.
The National Retail Federation predicts a sales increase of 2.5 percent for
2010, markedly better than the dismal 2.5 percent sales decline in 2009.
WHO WILL BENEFIT?
The question is, which retailers will get the most benefit from
these expected small improvements in the economy and consumer
spending? I believe the retailers who will benefit most are
those who stop trying to protect their businesses from the
downturn and adopt a more aggressive approach to advertising and
promoting their stores and the merchandise they sell.
For the past 18 to 24 months, a good many retailers have been in a
"hunkering down" mode, cutting back on their advertising, marketing,
and special events--simply trying to weather the storm. Two things have
driven retailers to this way of thinking since the start of the
recession. First, in many retail specialties fewer competitors exist as
a result of store closures and bankruptcies during this period. This
means some categories of specialty retailing have become at least a
little less competitive. Second, retailers have learned they cannot
profitably operate their businesses on discounts of 50% to 70% off and
more.
With modest sales growth expected this year, savvy retailers will go
after the business with everything they have in their arsenal of
marketing and promotional tools. Those retailers who continue to be
overly cautious when it comes to marketing will not attract enough
customers to take advantage of the opportunities in 2010.
Retailers who expect to grow their businesses in 2010 must not be
timid. They should be willing and able to try new things and make
changes in what they did in the past to attract customers. The
so-called "tried and true" ways of advertising and marketing very
likely won't work as they did just a couple of years ago.
Shop and Buy Local Community Initiatives
One of the marketing initiatives a number of cities and towns across
the country have embraced in the last few years is to encourage their
citizens to shop locally. The impetus behind these initiatives comes
from the growing use of the Internet to shop for a wide variety of
goods and services as well as the growth of large national chains in
nearby communities. The primary beneficiaries of these initiatives are
the community's smaller retailers. Several communities around the
country saw measurable sales increases this past holiday season as a
result of their buy local initiatives.
There is some question of whether these programs will be effective long
term. But no doubt these marketing efforts have helped independent
retailers increase sales and survive this recession. Helping local
independent retailers survive and do more business has always been beneficial
to communities. These businesses create jobs and generate sales tax
revenues, so everyone wins.
Over the years I've visited dozens of smaller towns and communities
that do absolutely nothing to help their local independent retailers;
clearly evident by the empty store fronts, vacant office space, and
lack of visitors to formerly vibrant downtowns. In those towns where
the leaders take a proactive approach to maintaining a vital downtown
by helping their independent retailers and small businesses, the
community is thriving. I've always wondered why a town or community
would do anything other than actively support their local businesses.
Smart Business Practices
Several months ago I wrote about how Ukrop's, the Richmond,
Virginia-based supermarket chain that was struggling to survive, was
about to be sold. In my view its problems directly related to its
refusal to open on Sunday, sell liquor in the stores, and generally
make an attempt to serve the needs of all the people in its
communities. Some of these policies were in place because the family
who owned the business had religious beliefs that dictated such
practices. With Ahold, the new owners, about to take over, you can be
sure there will be changes made.
I received my first lessons in retailing from Maury Silverman, a devout
Jew, who always went to the Synagogue on Friday evenings, and on
Saturdays, his Sabbath, never came to work. He didn't inconvenience his
customers who weren't Jewish by closing the store Friday evenings and
Saturdays. His goal was to serve all the customers in our community. I
certainly respect everyone's religious belief's, but from the day you
open a business you have a responsibility to your employees, your
vendors, and the community to do the best you can to serve the needs of
all of these people.
A TURNAROUND AT STARBUCKS!
In the early months of the recession, Starbucks reported
significant downturns in both store traffic and sales. For some
reason many in the media predicted the end for Starbucks.
The reporting was all about doom and gloom for Starbucks. As a
long time admirer of the company and its enigmatic CEO, I
believed they would not only survive but once again thrive.
One of the factors in this turnaround was that Howard Schultz came back
to run the company. He admitted , "We had lost our way." He went on to
say, "We went back to start-up mode, hand-to-hand combat every day to
find it. And with the kind of discussion and focus that we had not had
as a company since the early days--fear of failure, the hunger to win."
I wonder how many other retailers have lost that fear of failure and
hunger to win? Has yours?
REPORT FROM NRF'S 2010 BIG SHOW
 One would never know the retail industry had just gone through one of
the toughest years ever if you attended this year's NRF Convention in
New York City. The trade show floor was jam-packed with both exhibitors
and visitors. And the day devoted to independent retailers relayed some
great ideas independent retailers could use to innovate and grow their
businesses.
As the closing speaker for Independent's Day, I invited two of the
retailers profiled in my book Retail Superstars to join me and tell the
audience about their amazing stores. Marta Benson, President of Gump's
in San Francisco, told about how the Gump family established this
wonderful store back in 1861. She described the iconic brand Gump's had
become selling the finest home furnishings, tabletop, jewelry, books,
and art.
Pam Majors, owner of Junkman's Daughter in Atlanta, told the story of
how her quirky store came to be. She shared how it had grown to become
a destination for shoppers looking for unique merchandise and a truly
unusual shopping experience.
Tom Peters, one of the
world's most respected and best-known business gurus and
best-selling author named my new book, Retail Superstars: Inside
The 25 Best Independent Stores in America, Best Business Book
of 2009.
As you know there are thousands of business books published
every year. For Tom Peters to recognize a book on retail as the best
book of the year is great for our industry. I am deeply honored
by this endorsement.
On the Road Again in 2010
I have some great opportunities to speak to some wonderful
audiences in all kinds of retail segments:
FEBRUARY
World Market Center Las Vegas, Nevada
Topic: "Becoming a Retail Superstar"
Texas Association, Directors of Volunteer Services Houston, Texas
Topics: "Retail Success" and
"Strategies for a Changing Retail World"
Toy Industry Association, Toy Fair 2010 New York, New York
Opening Keynote: "The Post-Recession Consumer: Will Retail Ever Be the Same?"
Independent Jewelers Organization Dallas, Texas
Topics: "Retail Success" and
"Strategies for a Changing Retail World"
Photo Marketing Association Anaheim, California
Topic: "Becoming a Retail Superstar"
MARCH
ASD Trade Show in Las Vegas
Topic: "Strategies for a Changing Retail World"
The NATSO Show 2010 in Las Vegas
Topic: "Becoming a Retail Superstar"
I'd love to speak for your organization. If you're planning a
convention, trade show, or corporate conference, give us a call at
800-766-1908.
Until next month...
George Whalin's Newest Presentation...
It is always a challenge for independent retailers when
consumers cut back and limit their spending as they do during a
recession. Yet, in the middle of one of the most severe economic
downturns in memory, there are independent retailers who are not
just surviving but thriving. Any retailer who wants to build a
more successful business can learn some extraordinary lessons
from these superstar independents.
George Whalin's new book Retail Superstars: Inside the 25 Best
Independent Stores in America tells the story of 25 stores that
are redefining what independent retailers can do in a highly
competitive environment. These amazing retailers are growing and
prospering alongside national chains and big box stores of all
kinds.
This unique presentation is jam-packed with the strategies,
ideas, and business-building tools employed by the independent
retailers profiled in the book. Whether just starting out or
eager to take their business to the next level, retailers can
learn what has worked for the best in the business even in tough
economic times.
Participants will learn how...
--Independent retailers stand-out and thrive against much larger competitors including national chain stores.
--Innovative store design can be used to attract more customers and build a more successful business.
--The right merchandise mix and selection can be the most powerful competitive edge.
--Even the smallest stores can use creative marketing ideas and tools to attract customers and keep them coming back again and again.
--Customer relationship building has become retail's most important and powerful business strategy.
And much, much more!
This is a program retailers won't want to miss!
Whether you're planning a convention, trade show, corporate
conference, or managers' meeting, a presentation by George
Whalin will add value for your attendees. Check out George's other
presentation topics at whalinonretail.com.
If you have an opinion or thoughts about any of the topics
posted, I invite you to comment at retailerblog.com It's easy to
do. And if you have a topic you would like to see addressed on the blog, send me an e-mail at george@whalinonretail.com.
We encourage you to pass this publication along to
your associates and colleagues. If all or any portion of this
newsletter is reproduced in another publication, attribution
should read as follows: Copyright 2010. Reprinted with
permission from George Whalin's Retail Management E-Letter. To occasionally reprint portions of this newsletter one time, no
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please contact us at 800-766-1908 or info@whalinonretail.com.
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