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March 2008

Are You Prepared?

Every day in stores all around the world, a retail ritual takes place--unlocking the doors and opening for business. Even though your store is 100 percent prepared to provide customers with a selection of merchandise that is sure to meet their wants, needs, and expectations. Even though your store has been thoroughly cleaned and merchandised so that every item is well presented, every sign is in place, every burned out light bulb replaced, and is inviting to the customers. Even with all these factors taken care of, customers will walk out of your store without buying!

Why does this happen?

Before I address why, I want to point out that it happens in all kinds of stores from small neighborhood boutiques to large national chains. It occurs in general merchandise, specialty, and discount stores. It's happening every day, far more frequently than anyone in retail cares to admit.

Managing Performance

It occurs for a number of reasons. Decision makers in many retail businesses do not prioritize managing the performance of their stores and their people. Whether it's a single-store or national chain, those in charge spend time and energy on everything from opening new stores, adopting the latest technological tools, adding new vendors, or some other big-picture issue. Larger organizations usually employ a VP of Retail or Director of Stores whose job it is to focus on performance. Yet people holding these positions often get sidetracked with some of the issues mentioned above as well as inane corporate politics.

The problem is more straight-forward for single store or small chain retailers. There isn't enough time to handle all the business factors they face every day. As you may know, I'm finishing up writing a new book about 25 extraordinarily successful stores and their owners. One of the common characteristics I found in researching this book is the tremendous number of hours these retailers work. It takes a lot of time to effectively manage the performance of their stores.

Managing performance always is important, but is even more so in tough economic times when we experience decreased customer traffic and declining sales. Slow or non-existent growth is a painful reality these days. For many retailers, the solution lies in taking charge of the key performance factors in their businesses.

Is your average sale increasing, staying the same, or decreasing?

If your average sale numbers are flat or down, look at the factors that impact this? For example, say you sell such higher ticket merchandise as furniture, tires, jewelry, better apparel, or musical instruments. Are your salespeople solely selling advertised merchandise, or are they showing customers step-up items? After they've made the initial sale, are they suggesting additional items that would be appropriate for the customer?

Do you and your sales associates begin every day with a discussion about what you want them to focus on that day? Does this discussion detail what you have in stock and what accessory items should be shown? Does your training focus on improving and fine-tuning the skills and abilities of your sales associates? Are you helping even your experienced sales associates improve their skills?

According to a recent study, the Verde Group and Baker Retail Initiative at the University of Pennsylvania found that often salespeople are more of a hindrance than a help to customers. Lost business and negative word-of-mouth results from this occurrence more than any other shopping problem. If this is happening in your stores, now more than ever you should take steps to rectify the situation.

One of the questions I often ask my speech audiences is, "If you had only one customer come through your doors today, what would you do to ensure that customer got the best help and best service you could provide?" In today's tough economy, shouldn't every customer get the best help and best service possible from you and your associates?

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Haggling Makes a Comeback!

Tough times often influence changes in the way retailers do business. But it looks as though some retailers are reverting back to the days when customers would haggle with salespeople to get a better deal. According to the NEW YORK TIMES, retailers including Circuit City, Best Buy, and Home Depot now allow associates to negotiate prices with customers. The writer cited the automobile and jewelry industries in which this practice was "once largely confined." That TIMES reporter may be too young to remember how things were just a few years ago when haggling was a way of life in the furniture, musical instrument, consumer electronics, and other higher-ticket retail segments.

The customer may feel gratified after getting a few dollars off an individual purchase, but there is real danger when one puts the pricing decision in the hands of sales associates. Having spent a good deal of my retail career in segments where price negotiations were an integral part of the day-to-day operation of the business, I strongly encourage any retailer to avoid allowing associates to negotiate pricing based on their own discretion unless it is absolutely necessary. Even automobile dealers don't give salespeople the authority to make pricing decisions. The ultimate decision lies in the hands of a manager.

CHILDREN'S PLACE AND DISNEY STORES!
This ranks among the strangest and most puzzling retail stories ever. In 2004, The Walt Disney Company got out of the retail business because its stores located in shopping malls all across the country never made a profit. Hoop Holdings, a division of Children's Place Retail Stores, a company that actually knows how to operate a retail business, obtained the licence. The agreement covered the design, production, and sale of Disney branded products in the stores. Now, four years later, Disney wants back in. Hoop has filed a bankruptcy petition with the stated intention of selling the license back to Disney. Do you suppose the folks at Disney have learned how to operate a profitable retail business in the last four years?

FRESH & EASY TAKES A TIME OUT!
This week Tesco announced it would stop opening Fresh & Easy convenience stores in the U.S. for three months. This is being done in order to review the performance of the 59 stores opened since last fall. Anyone, including Tesco, who believes it's easy to open an entirely new concept in the U.S. is living in a dream world.

THE SINKING MEDIUM!
According to the Newspaper Association of America, 2007 was an extremely bad year for newspaper advertising. The largest decline in more than 50 years occurred with revenue down 9.4 percent from 2006. In today's fragmented information environment, fewer Americans read a daily newspaper instead getting their news from TV, radio, and the Internet. Even newspaper web sites experienced declines in revenue.

The newspaper business may be struggling, but direct mail advertising grew. The U.S. Postal Service reports a 6.8 percent increase in commercial mail volume for 2007. Direct mail continues to be a viable medium for businesses to reach customers because it is cost-effective and it works!

RECORD STORE DAY!

On April 19, 2008, hundreds of independently owned record stores all across America will celebrate Record Store Day. Having grown up near the original Tower Records in Sacramento, California, I have a soft spot in my heart for great record stores. A couple of my favorite independents include Waterloo Records in Austin, Texas, and Amoeba Records in Los Angeles. For more information; to read quotes about these stores from Paul McCartney, Bruce Springsteen, and others; and to find a list of participating stores, go to www.recordstoreday.com.

DOWN TO THE WIRE...

Why not, it already sells everything else! Walgreen's is in the process of rolling out a new line of clothing priced from $6.99 to $14.99.

Tough times at Starbucks? They must be kidding! In the fiscal year that ended last September, Starbucks Corp. generated sales of $9,411.5 billion (Yes, that's Billion) with a net income of $672.6 million. These numbers represent an annual sales increase of 20.9 percent and net income growth of 19.2 percent.

In a new study, 67 percent of consumers say they research on the Internet before making purchases online or going into a store to buy. Yet, many store-based retailers operate web sites that fail to provide sufficient information about the products they sell. Nor do they give compelling reasons for customers to come into their stores to buy.

Until next month...

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Seminars and Training Programs for Managers and Associates

Delivering performance-enhancing speeches and seminars for retailers since 1987, George jam-packs his presentations with practical, real-world information. His seminars for managers and associates teach store management skills, customer service improvement, and sales techniques. If you want to improve store productivity and profitability, we encourage you to call George Whalin. Don't wait, his calendar fills up quickly.

Topics for managers' meetings and corporate conferences:
(Click on a topic for details)

Great Store Managers Make Great Stores!

How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees

Customer Focused Selling

Every Customer Every Day!

For more information go to our web site or call 800-766-1908.

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Speeches and Seminars for Retailers

As one of the nation's best-known and most popular retail speakers, George's speaking schedule includes events for retailers and consumer products manufacturers all across the country. He's added some exciting new convention and trade show topics. If you are a meeting planner or are involved with speaker selection and would like to book George for your next convention, we encourage you to call as early as possible. George's calendar fills up quickly.

Topics for conventions and trade shows:
(Click on a topic for details)

Retail Success! Increase Sales, Maximize Profits, and Wow Your Customers in the Most Competitive Marketplace in History

Into the Future! Powerful Trends Shaping the Future of Retailing

Stop, Look, Touch, and Buy: The Dynamics of Merchandising

12 Powerful Advertising Secrets Every Retailer Should Know

Power, Punch & Pizzazz! Create Advertising that Grabs Customer Attention and Sells More Merchandise

Customer-Direct Marketing: Increase Retail Sales with High-Impact Direct Mail & E-Mail

Double Your Sales and Triple Your Profits with High-Impact Marketing and Promotions!

Competition? What Competition! Standing Out in Today's Competitive Retail Marketplace

How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees

Every Customer Every Day!

For more information go to our web site or call 800-766-1908.

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Resources for Retailers

George Whalin's book RETAIL SUCCESS! is now in its ninth printing. A number of consumer products manufacturers have purchased the book for their retailer customers. Retailers have provided copies for their managers who regularly refer to portions of the book in their managers' meetings. And managers are referring to the book in their daily store meetings. If you haven't purchased a copy yet, what are you waiting for? For multiple copies, call us for volume pricing. For individual copies, there are also some very good deals to be had at amazon.

Go to our web site today where you'll find several other books in addition to RETAIL SUCCESS that George recommends. Check it out often, he keeps adding to the list.

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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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In addition to speeches and seminars, George also consults with retailers helping them improve the operation of their businesses. His consulting services include helping retailers with strategic planning issues, marketplace positioning, merchandising and store layouts, developing results-driven marketing and advertising programs, personnel management, and improving store performance. If you need solid, practical, proven insights and ideas to grow and improve your business, call us toll-free at (800) 766-1908.

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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 2008. Reprinted with permission from George Whalin's Retail Management E-Letter. To occasionally reprint portions of this newsletter one time, no express permission is required. To reprint in more than one venue or multiple articles, please contact us at 800-766-1908 or info@whalinonretail.com.

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