It is ugly out there at the moment, in case you haven’t noticed. There is no question that this is the worst, absolute most stinking rotten economy most of us have seen…and it doesn’t look like it is going to pick up in the immediate future. Even people who are able to shop have cut back because they are nervous about the future or think it is bad taste to spend when others cannot. As our sales figures and incomes shrink, we are all saving money anywhere we can. Every magazine, newspaper and TV newscast talks about pinching pennies, tightening belts and thriftiness of all kinds.
Frequent readers of this column know that I fully support these cost-cutting endeavors
and always have, but here is a little note of caution. We have to be careful that we don’t save so much money that we put ourselves out of business. Overreaction to the tough times can be as bad for your long-term business health as under-reaction.
Think about this. 90 percent of Americans still have jobs. People continue to have birthdays and anniversaries, get married, have babies and have parties to celebrate these important events. Fortunately for us, all of these are gift-giving occasions and gifts are our business.
Shoppers are clearly spending less, but they are still spending. They are making fewer impulse purchases, researching their choices and being careful to get the most for their money, but they are still spending. Even more important for us, consumers are choosing not just what they buy but where they shop more carefully than they ever have. As merchants we must think of how we react to this trend to serve our customers and increase our sales.
So how do we weather this storm? Your shop must look good, have inventory and be entertaining to visit. Everybody wants a little fun these days and we can give it to them. As discretionary shopping trips become less frequent, they must be rewarding and memorable. Keep in mind that we may have more lookers, but lookers turn into shoppers. Make that lady want to come back, even if she did not buy anything today.
Pam Danziger’s new book: Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience (Kaplan, $27) talks about making your store successful in this market. “Now more than ever, retailers need to be at the top of their game,” author Danziger says. “With shoppers super cautious about their spending, retailers need to give them a reason to come shopping—but shopping alone can’t be the reason. They need to draw them into the store by offering an experience that makes shopping there fun, engaging and entertaining. That is the key for retailers to survive a slow market and what my book Shopping is all about.”
“Making a retail concept work today is far less about the tangibles or objective aspects of the business-product, location, price-and all about the intangibles that color and flavor the shopper’s experience in the store. Increasingly success at retail is less about what the retailer has to sell and more about how they sell it. This is the new experiential paradigm shift in shopping.” says Danziger.
Retail is about the fun, the relationships and the excitement, which it has always been. Do you remember shopping in department stores during their days of glory? Think about restaurant, seeing Santa or waiting endlessly for your mother. When we talk about those stores, we know that the merchandise was great, but it is the shopping trips we remember.
A big ray of sunshine is that it is now very fashionable to “shop local” or “Buy Independent”. Shoppers, while still price conscious, want the Cheers experience. Remember the TV bar where everybody knows your name? Not only do we know our customers, but they know us, like us and want us to succeed.
Think about the experience you provide. From the moment they walk up to the door until they leave, with bags in hand (we hope), make those shoppers enjoy their visits so much that they cannot wait to return.
As you decide where to save money, think about the long term effects on your business as well as the immediate savings.
Don’t skimp on housekeeping
At a recent trade show we were appalled at the dirty windows in one of the buildings. These are big, dramatic windows, viewed clearly as you get off the escalator on each floor. After the market, as I discussed traffic and business with industry friends, the dirty windows were mentioned several times. People notice.
Have you dropped your window cleaning service? Learn to do it yourself. Dirty windows, dusty shelves and bad lighting make a store look like a failure. Keep the floors free of dust bunnies and eradicate finger prints on the doors.
Make your markdowns count
This economy has made everyone a bargain hunter, so it is great time to move things at lower prices. I am not advocating trying to be a low price leader, which will not work, but your slow movers need to go. Smart merchants buy for margin, and cash is tight for most of us, so it hurts to use that red pen, but this is a great time to dump the losers.
Always remember that the sale goods have to look great. Everybody is running a sale- make yours enticing as well as well-priced.
Don’t Stop Buying
Spend what you can, be sensible, but don’t stop buying. Choose carefully, purchase smaller quantities and reorder the merchandise that moves quickly so you get the turns. Stores must have new products!
Be Careful of Cutting Hours
Many stores are cutting hours, most notably Kitchen Kaboodle, a five store chain based in Portland, Oregon that is now open Thursday through Sunday, instead of seven days a week. They are promoting “fewer days, same stuff, lower prices”. This is a daring and fascinating move for the successful chain. They are supported by an excellent reputation since 1975, a robust Web site and lots of press, but I think they will still lose customers.
Remember that you will still have the same fixed costs of rent, taxes and inventory. If you close a day a week, or a few more hours daily, your savings on wages and utilities may be appealing, but you run a very real risk of appearing to be going out of business. With so many stores closing it is imperative to look happy, healthy and solvent.
Analyze this move carefully.
Staff
Payroll is a major expense in retail and an area that can be trimmed in many shops. If you trim a few hours here and there the savings can be significant. Plan carefully! Customer service is even more important this year than ever.
Events and parties
Retail-tainment brings the shoppers into the store. Keep having events! Throw another party! You need the traffic and your customers need a little fun. Try something new and different, repeat a winner from the past, but keep the excitement going.
Stay in touch with your customers
People are busy and distracted. Don’t expect them to remember to come to your store: Remind them. If you are not e-marketing, today is the day to begin. Email is the fastest, easiest and cheapest way to contact your customers and give them reasons to shop with you.
Resources
Read every trade magazine that comes to your store. Talk to your reps about what they see that works for other stores. Visit the Gift and Home Channel, The first web/TV internet Channel focused on helping independent retailers succeed, for ideas, videos and education. (www.giftandhomechannel.com) Talk to other merchants at trade shows.
We can be successful this year. Take care of yourself, take care of your store and have a little fun.
Mary Liz Curtin and her incredibly thrifty husband are finding new pennies to pinch at Leon & Lulu, their furniture, gift and accessory store. Contact her at (JavaScript must be enabled to view this email address)