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A view of the industry through the eyes of independent and chain retailers.

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Positive Things You Can Do RIGHT NOW To Help Your Business

Don't complain, act!

by Rich Kizer & Georganne Bender (February 2, 2009)

(Note: Professional speakers, authors, and consultants, Rich Kizer & Georganne Bender are nationally recognized experts on customer diversity, marketing & promotion, and everything that affects and interacts with consumers in the retail environment. Each year Kizer & Bender speak to thousands through their "Retail Adventures in the REAL World™" keynotes and seminars. Their unique consumer insights are widely featured in the media, including the ABC National News special report, "How Stores Hook You." Their book, Champagne Strategies on a Beer Budget!, has helped thousands of retailers improve their bottom line, and their "Retail Adventures™" Blog is visited by tens of thousands of readers each month. In 2004 they were named two of the "Most Influential People in Retail Today," and their popular magazine column, "Georganne & Rich on the Road," won the American Society of Business Publication Editors (ASBPE) Award of Excellence in 2004 and again in 2006.)

We're just back from CHA and our minds are swirling with the many conversations we had with retailers during the show. Here's the short version: Some are having a tough go at keeping their doors open, while others have pulled out all the stops and are thriving. In our seminars, "The Inside Secrets of Fast Track Retailers: Real-life Strategies that Create Success!" and "How to Kill Your Retail Business Without Even Trying: 10 Fatal Mistakes and How to Avoid Them," we shared positive things you can do RIGHT NOW to help your business. Consider the following:

1. Merchandise, unlike fine wine; does not get better with time. This is one of the biggest and most common causes of store problems. The scary thing is that most retailers we consult with cannot tell us when product was received, nor can they identify slow-sellers or those items that are dead on the shelves. The store's problem then becomes decreased inventory turns, increasing cash flow problems, and soon the owner is eating out of inventory sales. From here, the downward spiral quickens.

To avoid this, you need to discipline yourself. Add a code to the product labels and/or bin tickets that tell you how old the merchandise is. (We know, the computer tells you. Good! When is the last time you got into the inventory from your computer reports to find all the old stuff? Last year? Never? What are you waiting for?)

Here's the problem: You buy merchandise that you like and you're certain that customers will love it, too. Guess what? Not everyone likes the same things; that's why you have to think like a professional buyer instead of an enthusiast who happens to own a retail store. We've both been buyers at some point in our careers, and we both had to buy merchandise that we didn't like – but our customers did.

The sad thing is that sometimes by the time a retailer picks up the telephone to call us, it's almost too late. Take, for example, the retailer who called to request an in-store consultation. Long story short, we arrived to find the store was woefully out of merchandise – all the cash was tied up in old, non-selling merchandise – and there was no money available to purchase out-of-stock staples, let alone the new fashion items customers were clamoring for. And the phone was ringing off the hook with vendors calling about past invoices. Then the landlord called to inquire about past rent due on a lease agreement that was secured by a personal guarantee. No retailer wants to go through what this retailer was going through, but unfortunately, too many do each and every year. MANAGE YOUR INVENTORY!

Now, we're going to go out on a not-so-popular limb here: Vendors, you have a responsibility here as well. Your responsibility is not only to bring great items to the store, but to create and educate an industry to strengthen and build it. So, how are you doing in this regard? How often do you call or email your accounts to inform them of hot items, techniques to reduce or eliminate slow sellers, cool things that other retailers are doing, etc.? If you do this, your value as a partner will grow tremendously, and your future customers will consist of both new and old successful retailers.

2. Mind your own business. Your business can easily get away from you if you aren't diligent about store operations. You need a non-negotiable budget for every area of the store: it's too easy to over-spend when you don't have a budget. Stop buying unnecessary things. Do you really need to update your office? Was the expensive display of product you purchased on impulse really necessary? And is there a store associate who just isn't pulling his or her weight, but you've been dreading letting them go?

Set up a system to personally check all incoming statements and invoices. Insist on receipts and purchase orders, and pay the bills yourself if you can. At the very minimum, personally sign each check. And don't ever mix business and personal funds if you can avoid it. Before you sign that personal guarantee, think about what it will mean to your family and personal finances if you have to close your store.

3. Don't take a single customer for granted. We know, that sounds remedial. What retailer would ever do that? Lots of them, apparently, because customers in focus groups bring it up all the time:

"Why do stores reward only new customers? The ads and coupons read 'Valid for new customers only.' What about me? I've been shopping in that store for years; I'd like a discount, too." And "I'm a good customer, everyone in the store knows me, I'm here all the time. But sometimes, when I'm asking a question, or getting help on a project, a new customer will come in and the associate makes me wait while she helps the new guy. They never seem to ask a new customer to wait a moment, but they don't hesitate to ask me."

The closer we get to our customers, the more we think they'll understand. The reality is there are times they feel they've been taken advantage of. When this happens too often they just go away.

It costs up to five times more to attract new customers than it does to keep loyal customers happy, so make them a priority. Hold a store meeting to discuss the importance of loyal customers; encourage everyone to spend quality time with them. And ask for customer feedback on how you're doing. Or better yet, take a tip from a CHA member who shops other stores - all kinds of stores - with her customers. "You wouldn't believe what I learn during these excursions. I even pick up ideas in stores that aren't direct competitors. And the bonds I build with my customers are unbreakable because we become a team."

So, what can you do in 2009 to make things go your way? Here are a few goals we'd like you to adopt:

4. Reinvent. It's been said that every year 10% of your business will just go away. Items stop selling, trends fizzle and fade, new product and applications replace those once sacred cows. Your job is to reinvent your business to the tune of at least 10% each and every year. If you did nothing to reinvent your store for five years, you could be close to being 50% obsolete. It might sound crazy, until you stop and think about how your store compares to what it was like waaaaay back in 2004.

5. Attend trade shows. If you are considering skipping trade shows this year, we'd like you to rethink your decision. Your store needs fresh merchandise, and after Holiday 2008, your retail psyche and spirit need to be replenished. So go! Connect with old friends and make new ones. Meet with your current vendors and brainstorm ideas for your store. Seek new vendors with new ideas. Attend the workshops and business classes. Immerse yourself in what you CAN do, not in what's holding you back. And if you skipped CHA Winter visit http://www.chashow.org and buy the business classes on CD. Listen to them each morning on the way to work.

6. Seek guidance. Develop relationships with other non-competing retailers. The best place to begin is at those trade shows we urge you to attend. If your store is in California, make a friend in Florida. Agree to talk monthly to exchange ideas. You could even develop a network of retailers and hold a monthly conference call to talk shop and share ideas. It's always good to talk with someone who has walked a mile in your retail shoes.

You'll find thousands of strategies, tactics, tip and techniques to help you grow your business on our Retail Adventures™ blog: http://www.kizerandbender.blogspot.com. We really mean it when we say to call us if you want to talk about your store. We know how tough it is right now, and we're happy to brainstorm ideas with you – we want you to succeed!

(Note: To read previous Kizer and Bender articles, click on the titles in the right-hand column.)

xxx 

 

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