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April 2008

Finding Growth in a Down Market!

The theme of this month's newsletter was inspired by a speech I heard given by Sean Cummings, president of Brunswick Billiards, at his company's recent annual dealer meeting. Mr. Cummings' presentation was filled with great ideas on how retailers doing business with Brunswick Billiards can grow their businesses in today's difficult marketplace.

His comments got me thinking about how we look at our businesses when growth no longer comes easy. With the exception of the downturn immediately following 9/11, most retailers have enjoyed an extended period of business growth that began back in the mid 1990s. But today's reality is that consumers are more cautious than they've been in a very long time. This forces retailers to work harder at grabbing consumer attention and getting customers through the doors.

In recent years we've heard a great deal about the innovative consumer products created and then catapulted upon the marketplace by such companies as Apple, Canon, and Toyota. Apple's iPod, Canon's digital cameras, and Toyota's Prius automobiles have helped these companies thrive in a fiercely competitive environment.

Now is the time retailers need to be creative when it comes to attracting customers to their stores. Retailers who experience growth over the next two to three years will be those who are bold enough to embrace innovative ideas in marketing, merchandising, product selection, store design, and building customer relationships. The consumer environment has changed significantly in just the last few months and remains in a state of flux. Retailers who expect to succeed will have to change the way they conduct business during these difficult times.

What will you do to be more innovative?

Among the retail segments hardest-hit by the current slowdown is furniture. Yet by taking an aggressive approach to promotions and special events, some still thrive. Rather than use price-driven promotions, one furniture retailer ran a trade-in sale offering big trade-in dollars for old sofas, chairs, mattresses, and other pieces. The event proved quite popular with his customers, so he plans to repeat it in the near future.

Another retailer just started running cross promotions with a local automobile dealer who is suffering a business decline due to the exorbitant gas prices. The furniture retailer gives customers who purchase furniture a coupon good for accessories when they buy a car, truck, or SUV from that dealership. When customers buy a new vehicle, they are given a coupon good for free merchandise upon the purchase of a prescribed amount of furniture. For example, a customer buying a new SUV can get a second recliner free after purchasing the first from the furniture retailer. Although the promotion has been running only a short time, both business already have seen increased traffic.

There are lots of innovative ideas for marketing and promotions. All it takes is to think differently than you have in the past.

Upscale or Down?

Over the last several years, one consumer segment seemingly immune to current economic pressures is the upscale or affluent consumer. They continue to spend regardless of rising gas prices and other economic changes. Even though this consumer may now be impacted by what's going on in the economy, retailers can still find growth opportunities by catering to the highest income consumers.

One way retailers and consumer brands can better serve the affluent shopper is to add merchandise and services that attract even more of them. Another strategy is to add lower-priced, high-value merchandise to their selections--items that can be used in aggressive, consumer-compelling promotions to get more people through the door.

There are pluses and minuses to both these strategies. When attempting to reach new affluent consumers, make sure you don't scare off your current customers with more expensive merchandise. There must always be a balance. On the other hand, it is equally important to ensure lower-priced or lower-quality merchandise doesn't get to the point where it dominates the sales floor. Again, be cautious and take a balanced approach to adding new merchandise to your selection.

It's always about the customer!

In these tough times, it takes bold moves to get customer attention and compel them to come into your store. Ask yourself, "What can we do that's different to capture customer attention?" If you are doing the same things you've always done, it is unlikely you will see significant growth especially in an environment where many consumers are cutting back. If you use newspaper inserts, maybe its time to change the look, size, and shape of your inserts. If your radio and TV spots sound and look the same, maybe it's time to take a new approach.

If you've been using the same agency for a long time to create your marketing message and place your advertising, maybe it's time to hire a firm that will bring a fresh outlook. A retailer I know recently put together an advisory group of marketing students from a local university to help her update her marketing message and materials. She ended up with a more modern, cutting edge, and a little irreverent approach to marketing her small chain of stores. The result? Traffic is up and sales have increased every month this year.

Are sales and traffic down in your stores? Don't be afraid to take bold steps, make changes, and get everyone thinking about innovative ways to grow your business. In today's challenging climate, it's time to shake things up!

THEY CAN'T BE SERIOUS!
After a battle with the Federal Trade Commission last year, Whole Foods and Wild Oats Markets completed their merger and the two companies became one. In most situations after the courts rule in favor of such a merger, the government doesn't pursue the issue. Not this time. For some reason the FCC has gone to the appeals court to try and undo the merger that is essentially done--Whole Foods has sold 35 Wild Oats Markets and closed 12 while beginning to integrate the two companies. It's hard to fathom what the government's anti-trust lawyers hope to accomplish with what will undoubtedly be a protracted legal affair. In the end how can anyone win?

MAYBE THE TIME HAS COME!
After years of debate, it looks like the playing field is about to be leveled between Internet merchants and store-based retailers. I am a long-time advocate of requiring Internet retailers to collect and pay sales tax as store-based retailers have done for years. While it is quite likely some Internet merchants will challenge this, New York State recently passed legislation requiring Internet merchants to collect and pay sales tax on merchandise sold in that state. We aren't there yet, but the move by the state of New York is the first step to solving this perplexing problem. If you are a retailer with stores, I suggest you let your state legislators know, the time has come for Internet retailers to compete for customer dollars just as you must every day. They've been relishing this gift from Congress long enough. No more free rides.

LICKABLE ADS! In February, Welch's, the famous makers of grape juice, ran ads inviting readers to peel off a sticker and lick the page underneath for a taste. We've had those "scratch and sniff" perfume ads for years, but this is the first time a marketer has encouraged readers to taste its product in a magazine. Now that's innovation.

A CHICAGO HOT SPOT!
Nine years ago the Mattel company opened its first American Girl Place just off Chicago's Michigan Avenue. Drawing more than one million visitors a year, the store is one of that city's most popular destinations. In October, the store will move from its current 40,000-square-foot site to a 52,000-square-foot location in the Water Tower Place Mall right on Michigan Avenue giving little girls a more spacious place to shop for American Girl dolls and accessories.

HALLMARK CARDS DOES IT AGAIN!
Greeting cards have been around forever, but Hallmark continues to innovate the category. A few years ago, Hallmark introduced cards that played a short piece of music when opened. These cards are particularly popular with baby boomers when featuring popular music from the '50s and '60s. Now Hallmark has introduced recordable greeting cards allowing senders to record their own messages. The small battery contained in the card lasts for a little more than 200 playings.

A VERY SPECIAL HONOR!
The April issue of The Exchange Post, the Army Air Force Exchange Service (AAFES) magazine, features a story about Bety Desil, an AAFES employee. In 2007, Bety was injured by enemy mortar while working at the Camp Cuervo PX in Iraq. On what was to be her last day before returning home, Bety was working at her desk when she heard incoming mortars. She quickly jumped up and began helping associates and customers into a protective bunker. The mortar exploded just outside the PX sending shrapnel into Bety's foot and leg. Now fully recovered, on March 14 Bety was honored by AAFES at Fort Hood, Texas, with the "Defense of Freedom Award" for bravery and service to our country.

The "Defense of Freedom Award" is given to recipients who have been wounded from hostile actions. The criteria is the same as the military's Purple Heart. This was only the third time the award has been bestowed on a PX associate since its inception in 1990. Currently, there are more than 440 AAFES retail associates deployed to Army and Air Force bases around the world working in PX facilities. They do important work serving the needs of our troops.

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. If you received this from someone else and would like to sign up for your own complimentary subscription, click here. If you missed an issue, click here to read past issues.

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