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July 2009
How Long Will It Last?
The cover of the current issue of Newsweek proclaims The
recession is over. There is, of course, an asterisk at the end
of the headline directing the reader to smaller type at the
bottom of the page questioning whether any of us will survive
the recovery.
I suppose in the eyes of some economists the recession is
technically over. This must be based on the idea we have somehow
found the bottom of our economic problems and at some point
will begin a rebound. While I am certainly not an economist, it
seems to me we have a long way to go before anyone in the
retail business will believe there's been a turnaround in the
economy.
I'm sure the millions of American workers who have lost their
jobs might disagree the recession is over. And those people who
face the serious threat of home foreclosure probably feel
the same. Let's not forget the retailers who are either
currently working to reorganize under bankruptcy laws or are
barely hanging on trying to avoid the same fate.
By all estimates back-to-school sales will be down from last
year. The National Retail Federation predicts a 7.7 percent
decrease in overall back-to-school sales from 2008. It's still a
little too early to start making predictions for the upcoming
holiday shopping season, but a good many retailers have
exercised caution when ordering merchandise for this
all-important season.
IS THERE ANY GOOD NEWS?
When sales began to decline last September, smart, on-the-ball
retailers cut costs, reevaluated every expense, and fine-tuned
all aspects of their businesses. As a result, they are now able
to generate real profits on substantially lower sales volumes.
Another change that has taken place in recent months is a
renewed interest in improving the customer experience in stores.
This includes an emphasis on associate training and development;
improving signage, lighting, and store layouts; better displays;
and anything that encourages customers to come back again and
again. After all, with fewer customer coming through the doors,
every customer becomes even more important.
I don't know when the economy will rebound but I do know that
retailers who pare down their costs and focus their efforts on
providing customers with the most pleasant experience possible
stand the best chance of staying profitable in this economic
climate.
Successful Nichemanship!
Okay, "nichemanship" isn't in the dictionary, but it should be.
And one of the definitions would be: The ability of innovative
retailers to find amazing ways to create successful businesses
in the narrowest of niches.
In my new book, Retail Superstars, I introduce readers to
several retailers worthy of this description. Kevin Pipes, owner
of Smoky Mountain Knife Works in Tennessee, enjoys an extremely
successful business selling knives and swords. The Arbutine
family in Florida has built The Silver Queen into a highly
successful store and online business serving the needs of people
who want to buy items made of silver. And the Bronner family
continues to operate the world's largest Christmas business in
Michigan. While there are other Christmas stores, Wayne Bronner
and his siblings run Bronner's Christmas Wonderland, a nearly
100,000-square-foot store, an extremely successful catalog and
internet business, and a wholesale business with customers
around the world.
Each of these businesses achieved success by being very, very
good in a well-defined niche. Recently I had the opportunity to
visit another niche business. Jack Bernstein owns Jack's Eyewear
on La Brea Avenue in Los Angeles. Yes, lots of stores sell
eyewear around the country, snowballing in part to the explosive
popularity of fashion-oriented sunglasses in the latter years of
the last century .
Even with the great interest in fashionable sunglasses, few real
experts or stores selling vintage and collectable eyewear exist.
Jack Bernstein changes all that with his store. In fact he has
become something of a celebrity in Los Angeles himself with his
encyclopedic knowledge of everything pertaining to the most
desirable sunglass styles and brands.
As "the" expert, Jack's clientele, a who's who of movie, TV, and
music stars, include Beyonce, Matt Dillon, Mary J. Blige, Goldie
Hawn, Brad Pitt, John Travolta, Kevin Spacey, Sharon Stone, and
many, many more. Part of the appeal can be attributed to the
massive selection of vintage and rare sunglasses from the early
1920s to today's hip styles including such brands as Dior,
Cazals, Alpina, Ray-Ban, Porsche, Dunhill, and classic Italian
Persols offered in the store.
As a licensed dispensing optician Jack has earned a national
reputation not only for offering a huge selection of sunglasses
but also for his ability to repair and enhance sunglasses for
those who want a little more "bling" for the sunglass bucks. Hip
hop artists regularly frequent Jack's Eyewear looking to add
some diamonds to their sunglasses or to have Jack reshape a
favorite pair.
There may be plenty of places to buy sunglasses in Southern
California, but none offer the expertise of Jack Bernstein.
Jack's Eyeware epitomizes successful nichemanship.
BELIEVE IT OR NOT!
Even in this economic environment there are retailers moving
forward with aggressive expansion plans. According to the latest
survey by RBC Capital Markets and Retail Lease Trac of 2,000
retailers in their databases, 64,926 new stores will be opened
over the next 24 months. Some of the additions will be by
fast-food restaurants such as Quiznos Subs, Submarina, and
Dunkin' Donuts, but a wide variety of other retailers are also
planning thousands of new stores. Gamestop will open nearly a
thousand itself. With the success of dollar stores during this
recession, such chains as Dollar Tree and Dollar General each
plan to open as many as 500 new stores. Others with expansions
in the works include AutoZone, Blockbuster, CVS, and 7-Eleven.
NEWS FROM MICROSOFT
As Microsoft readies the introduction of its new Windows 7
operating system scheduled for October 22, it also is getting
ready to open Microsoft stores in malls and other
high-visibility locations around the country. Some of these
stores are expected to be near or even next door to Apple
stores. According to an announcement this week, the first two
stores will open in Scottsdale, Arizona, and Mission Viejo,
California. Microsoft has hired a team of experienced folks to
find the right locations and run the new stores. This will be
quite interesting to watch.
YOU MUST BE KIDDING!
I don't like to be cynical but sometimes you read something that
is almost beyond belief. According to online publication The
Consumerist, in a recent meeting where participants were
discussing the problems in the designer apparel business, Anna
Wintour, editor-in-chief of American Vogue magazine, asked
"Could someone lead a committee that would make ground rules for
retailers of when the discounting starts, and then all the
retailers can agree to it?" When designer Diane Von Furstenberg
said it was illegal for big department stores to have
any such agreement as it would be considered price-fixing and
collusion, Ms. Wintour countered with, "Is that something we can
change? We have friends in the White House now."
My New Book!
I'm delighted to tell you about my new book Retail Superstars: Inside
the 25 Best Independent Stores in America has received rave
reviews and is selling better than expected. Selling lots of
books is the kind of thing that warms the heart of an old
retailer.
I encourage you to visit the web site retailsuperstars.com
to see photos of the stores profiled in the book, a couple of
videos, read some of the reviews, and order a copy for yourself.
The book is jam-packed with insights, ideas, and business-building
strategies independent retailers are using to thrive in
this economy.
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.
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