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November 2008
CLICK HERE FOR A GREAT HOLIDAY GIFT IDEA!
Adapting to Change!
To sustain business success, an organization and its people must
be able to change and adapt as consumers, the marketplace, and
the world around them change.
There's little doubt that consumers, the marketplace, and world
around us are undergoing a period of great change. Are you
capable of embracing the changes necessary not just to survive
today's economic climate but to prepare your business for future
success?
As a long-time advocate of challenging the status quo, I believe
retailers today must challenge everything they do to improve the
performance of their people and productivity of their stores.
And they must do so quickly because it doesn't look like the
U.S. economy will improve anytime soon. This process of
thoroughly analyzing every business function means looking at
every expense and determining whether it helps the business
function more efficiently, better serves customers, or sells
more merchandise.
The precipitous downturn in consumer spending has occurred in
just the last few months, and a growing number of retailers are
being severely impacted by it. Bankruptcies and liquidations may
be the direct result of the inability to get or maintain
business financing. Or existing credit lines may have been
pulled. Or financial institutions may have been unable to maintain
long-term relationships with their retailer customers. These
factors will continue to cause difficulties that some retailers
will not be able to overcome.
For some retailers, the current problems trace back to a lack of
desire or inability to change. It could be operational costs
grew and grew over time, or the retail concept itself became
stale and unattractive to consumers. Whatever the reason,
there's little doubt retailing will continue to see bankruptcies
and failures for months to come. Don't let it happen to you and
your business!
While December may not be the ideal time to start challenging
the status quo in your business, a sense of urgency is
essential. Start now by looking at and analyzing every function,
procedure, policy, and aspect of your business. This process of
picking your business apart and finding ways to get better, cut
costs, and improve operations is a necessity for every retailer
regardless of size, type of store, or length of time in
business. The future success of your business will depend on
what you do and how you respond to the current economic
situation.
If there is even the slightest chance your business might fail
or experience financial difficulties, now is the time to take
action.
DISCOUNTS OR DISPLAYS?
Earlier this year researchers OgivlyAction surveyed 6,000
shoppers and found that compelling displays spur impulse
purchases more often than discounted pricing. The research
addressed snack food items, but likely applies to other
lower-priced merchandise categories as well. The importance of
great in-store displays cannot be overstated whether the goal is
to drive impulse purchases or compel shoppers to stop, look,
touch, and buy.
A SIGN OF THE TIMES!
One shopping area that's generally been immune to steep
pre-holiday discounting is New York's Fifth Avenue. That changed
this November with some of the most exclusive Fifth Avenue stores
offering significant discounts. One of my favorites, Japanese
retailer Takashimaya, an elegant, classy, serene multi-story
store, usually devoid of anything resembling discounts or
price-oriented promotions, has been discounting a broad variety
of merchandise some as much as 30 percent.
Other Fifth Avenue retailers joining Takashimaya with discounts
of 30 percent or more include Armani Exchange, Cole Haan, Ann
Taylor, and Benneton. Even upscale retailer Bergdorf Goodman has
discounts as high as 40 percent.
LAYAWAY IS BACK!
One of retail's most enduring traditions nearly disappeared in
recent years. The practice of layaway fell out of favor with the
proliferation of credit and debit cards. K-Mart stores, having adequate
space to hold layaway merchandise, never stopped offering
the service to those customers who wanted and needed it.
In today's economy, layaway is making a comeback. Sears and
several other retailers recently instituted layaway policies.
LOSING GREAT STORES!
One of the real tragedies of today's terrible economic climate
will be the disappearance of some terrific stores. Several years
ago, while doing research for a speech I was to do for the
Western English Trade Association, I discovered some exceptional
stores. One of the best was Denny Seargent's Western World in
Dallas, Texas, a giant store filled with everything consumers
could want in western apparel, saddles, tack, hats, boots,
jewelry, and home furnishings. It was an attractive, creatively
designed, and beautifully merchandised store.
At some point Seargent's was purchased by a larger company,
which also owned a chain of stores called Boot Town and Western
Warehouse. In 2004, that company declared bankruptcy and was
purchased by an investment firm. It turned out the firm was
incapable of making the business work. In early November, the
business once again declared bankruptcy and will now liquidate.
Seargent's will disappear from the retail marketplace and Dallas
customers will lose one of that community's great stores.
BE THANKFUL!
Yes, we should all be thankful that we aren't in the automobile
business. Last week a dealer in Florida posted this ad for Dodge
Ram trucks on its web site. If you buy one truck you get two!
With such an offer the profit margin can't be good.
Last month I asked newsletter subscribers to respond to this
question.
| What specific steps have you taken or plan to take in your
business to deal with this economic uncertainty and slowdown in
consumer spending?
|
Here are two of the answers I received.
 "We are thinking positive about the holidays and pushing our
brand. We held our first store-wide meeting in every store last
Sunday, with a detailed agenda, review of the brand rituals, and
a role-playing game with prizes. The game was a shopping cart
full of items, where each sales associate had to sell another
product to go with an item in the cart. Fun was had by all.
"Our stores were decorated for Christmas the week before with
new decorations, new and exclusive holiday themed dog and cat
toys for sale, and holiday advertising signage. Everyone left
the meeting with a new button to wear on their company shirt
that matches the season's advertising materials. The button on
the recently trained sales associates has driven sales up
further this week!"
--Diane Holtz, President and Chief Operating Officer, Pet
Supermarket, Sunrise, Florida
"We have focused our inventory on the 'must haves,' the products
that sell well year-in and year-out. Our goal is to be in stock
all season on all of the top sellers, proven winners, and
gotta-haves, while scaling back some (not completely) in the
fringe items. This helps us keep inventories tight while making
sure we have enough of the stuff customers are walking through
the door asking about.
"We have focused our advertising on 'smart-shopping' knowing that
customers who will be tighter with their budgets need to get the
most out of their purchases. In toys that means understanding
the 'true cost' of a toy--the cost per hour of play. As we
tell our customers, 'the most affordable toy is the one your
child plays with the longest.'
"The bottom line for us is that they haven't canceled Christmas
and so we need to be ready to make this Christmas every bit as
special as any other Christmas. In fact, what we are doing is
little different than what we would do any other year. As we
tell ourselves and our customers, we've chosen not to
participate in any recessions or economic uncertainty. We'll
still be the same store they are expecting, if not better."
--Phil Wrzesinski, Toy House and Baby Too, Jackson, Michigan
Next month I'll have another question.
Happy Thanksgiving and have a great holiday shopping season!
Until next month...
George Whalin's book RETAIL SUCCESS! is the perfect gift for consumer products manufacturers to give to
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managers can refer to portions of the book in their
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RETAIL SUCCESS that George recommends. Check it out often, he keeps adding to the list.
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
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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.
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)
NEW! Strategies for a Changing Retail World
Into the Future! Powerful Trends Shaping the Future of Retailing
Retail Success! Increase Sales, Maximize Profits, and Wow Your Customers in the Most Competitive Marketplace in History
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
Every Customer Every Day!
For more information go to our web site or call 800-766-1908.
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.
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.
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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