Retail Sales

 Retailers Can Offer Layaways As Short Term Informal Credit

Many consumer surveys indicate that consumers are obsessed with personal debt these days. Rightly so, a shaky economy and unemployment woes motivate people to cleanse themselves of debt as much as possible. I’ve discussed a migration to needs-based spending by consumers and how spending habits have changed to reduce spending and focus on paying off existing debt.

Last year I discussed the power of the Layaway Program. Layaways bridge the gap between increasing formal debt and the need for goods that consumers may not have the cash to buy outright. A layaway purchase holds a desired item or items for the customer in the store and enables them to make incremental payments over a short term, usually six months or less.

Layaways help consumers get items they may not be able to afford as an outright purchase and helps retailers close sales. To a consumer, layaways offer them short term credit that is considered informal and does not appear on a credit report or affect a credit score. Customers do not perceive layaway credit as a financial encumbrance. The consequences of failing to pay a layaway is the loss of funds paid up and the item returns to the store’s inventory. In some cases, most stores that cancel a layaway for the customer will refund their money and take the financial losses, just to make the customer loyal and happy.

Under these circumstances, layaways are an attractive method of buying large ticket items within a consumer society that has revised its approach to debt. Retailers must offer this largely forgotten program that fell by the wayside when easy credit made the Layaway redundant. Today, tight credit and fear of debt makes the resurrection of the layaway a powerful sales tool for the smaller retailer.

Take Action Today:

1) Review the concepts of Layaways with your team and devise a program for each store.

2) Develop your Layaway program’s key points such as minimum price point, payment cycles and your cancellation policy.

3) Introduce layaways with media advertising and signs in your store for consumers to be aware of. train employees to discuss layaway options with customers on the floor as part of the presentation.

retail, retailer, leadership, operations, sales, merchandise, competition,
clientele, customers, relationships, layaways, credit

Small Retailers Can Level The Playing Field With Better Websites

The majority of smaller retailers got on the internet bandwagon some years ago because it was trendy and the right thing to do at the time. Most put together minimal websites on small budgets that basically served to inform customers where the store was, who owned it and what it was all about.

Without question, the internet’s value as a direct sales tool will continue to grow as more and more consumers, even the older ones learn to trust the security and convenience of on line shopping. Just about everyone under 40 will shop on line without hesitation.

Is it time to give your website a facelift? A number of off the shelf e-commerce solutions and shopping baskets now open the possibilities of selling directly on line at low cost for the smaller retailer. In fact Paypal offers a free shopping basket service that is easy to install and use by even the smaller retailer with little on-line expertise.

What else can your website offer today at low cost to the customer? Through Google Maps, you can offer custom directions to any of your stores from just about any location in North America. Customers who visit your site and plan on passing through your town in the future will find this feature handy.

Above and beyond cataloguing all of your products on line for direct sale, you can also offer email services for warranty questions or concerns with products. You can also ask customers who email you, if they would like a return phone call from one of your employees and select a convenient time to call.

Recently, there have been developments in affordable and even free packages that add on to your website and offer live help to customers logged onto your site. A computer terminal by the cash that employees can monitor can be used to offer answers to questions in real time to customers on line. Customers who can get instant answers from a real person on line will typically make positive buying decisions on line. This is a relatively new innovation that goes far to enhance the on-line customer experience. You may also want to offer free delivery on orders over a minimum amount to make on line orders as attractive as possible.

Lastly, you can use your website to post all of your sales and special events that are coming up. Drive quality traffic to your store by broadcasting events that will entertain, impress and dazzle your customers!

In my next article, I’ll show you how to drive more customers to your new and improved site at low cost!

Take Action Today:

1) Examine your current website and consider some of the recent innovations that can be added to your site to increase on-line as well as in-store sales.

2) Installation of these new add-ons is not difficult and no longer requires complex coding. See if any of your employees are computer literate and could manage your website at minimal cost.

3) Install a terminal at the cash desk and offer live help through many of the packages available at minimal cost.

retail, retailer, leadership, operations, sales, merchandise, competition,
clientele, customers, relationships, technology. environment, internet, websites

 Proactive Clientele Relationships Boost Sales In Challenging Times

In our new era of retail, consumers are not only constrained by limited disposable cash, but also from an overwhelming choice in our hyper-competitive market.

Customers often defer making buying decisions when they feel that they have so many things they need to buy and a massive array of retailers all competing for their hard earned dollars.

Progressive retailers need to rise above the crowded market place and engage customers on a new level. Indeed traditional marketing has its place however the new breed of retail sales associate must work towards building their own clientele network.

Every retailer should implement a clientele building program where all employees who interact with customers on the floor offer them the opportunity to join their own personal clientele list. A stronger bond is established and the customer now associates the store and the employee with future business. Personal clientele building creates stronger and more intimate relationships with customers that positively differentiates your organization from the traditional competition.

If you do not have a clientele program, you can start out with a simple form or card system that employees can use to obtain information about customers, their email address, interests etc. You can use this information to periodically contact the client with events, sales, new products lines etc. that they may find of interest. Hearing from a store employee whom they have met either by email, letter or phone adds a personal touch and makes your store top of mind over the rank and file competition.

Clientele programs with technology can become very sophisticated systems, with email broadcasts, newsletters, electronic coupons and a lot more. The main issue is to start with a simple system and get the process implemented with full employee participation. A customer is someone who comes and goes from your store. A client is someone you know well and have a relationship with. Clients think of your store when they consider a purchase over your competition.

Take Action Today:

1) Create a basic clientele program using file cards or simple forms. You can later automate this into a computerized database management system

2) Introduce your clientele system to your employees and explain the critical need for clientele relationships in today’s competitive market. Train them on how to establish clients and garner their information for your database.

3) Monitor clientele building progress by employee on a weekly basis.

4) Add technology in a progressive manner and automate your system.

retail, retailer, leadership, operations, sales, merchandise, competition,
clientele, customers, relationships, technology

Position Your Brand With New Items Offering Added Value

In an earlier article, I elaborated on the changing buying mentality of the consumer in these challenging times. Customers have migrated towards more of a needs-based buying mentality from a mixed wants and needs based buying pattern that we have witnessed in more buoyant markets.

Spring is a mere two months away and retailers should be scrutinizing their product mix to ensure that they offer new products with added value for the new buying mentality. Customers are becoming more discriminating with their purchases and will buy new and innovative items that offer a higher level of durability, quality or that simply do more for them for less money.

What attributes will customers look for this year? It’s obvious that price will be the top criteria in the buying decision process. However other product attributes will induce customers to buy of they’re impressed with new an innovative items:

Merchandise that last longer - a car battery that can last 60 months, likely that last car battery you’ll ever need to buy

Items that can do more than one task - a cell phone with a built-in camera is a popular example

Products that are “green”, waste less and are good for the environment - concentrated cleaning supplies with all natural ingredients appeal to many families

Products that now offer more for the same price - food products with 20% more such as cereals, or other consumables appeal to value conscious consumers

Other strategies to add value to products, if you do not plan on adding new and innovative new merchandise lines can include:

Enhanced or extended warranties that are included at no extra charge and offer longer protection for the consumer

Added bonus items added to products will also improved the perceived value of the purchase.

This year, consumers will look for durability, versatility and price as top purchasing criteria in order to maximize the return on investment of their hard earned dollars. This approach to purchasing will be universal within the consumable, clothing and hard goods categories.

Take Action Today:

1) Review your current inventory mix and plan to introduce new product lines that do more for the customer for a great price.

2) Examine the other outlined strategies to enhance your value statement to the consumer.

3) Aggressively promote your enhanced value statement through media advertising and in store signs. Make sure the customers know what’s new and improved in your store!

retail, retailer, leadership, operations, sales, merchandise, finances, recession
economy, boomers, fair trade, green, youth, diversification, warranty, bonus

Retailers Must Get Creative With Pricing To Entice Value Driven Consumers

There are less than six weeks to Christmas, even though it doesn’t feel like it! There’s still a window of opportunity to increase sales for the Holiday Season and into 2010. Retailers who understand how consumers have adopted price and value as their top buying decision criteria must brand themselves accordingly. Existing price driven retailers such as Wal Mart and Costco have proven that elements such as convenience, selection and ambiance have gone to the bottom of the list of priorities. Secondary to price, consumers still expect good customer service when they shop for both needs-based or wants-based items.

Every retailer is unique. Here are a number of pricing strategies that you can consider to build not only top line sales but the average sale per customer:

1) Launch a Pre-Christmas sale. Consumers traditionally expect sales to start after the holidays. A Pre-Holiday sale on selected giftware can appeal to customers who are under pressure to fill their gift lists.

2) Permanently lower prices on selected items and aggressively market your “New Lower Prices Throughout The Store” campaign. Many established retailers have discovered this new tactic. Customers often see this strategy as a more powerful brand position than the typical transient sale.

3) Offer package deals on selected products. Bundle a wardrobe package if you run a clothing store. Bundle compatible tools like a compressor and their accessories if you are in the hardware business. Electronics can be bundled in the same manner, like virtually every type of retail operation. Package deals offer great savings for customers and induce them to buy all they need in your store without the risk of shopping at your competition.

4) Offer a percentage discount on sales over $100. Customers will appreciate an instant discount at cash on larger purchases and motivate them to spend more in your store.

5) Give a percentage discount on multiple item purchases. Like a discount on a minimum dollar amount, this tactic also motivates customers to conduct “one stop shopping” and buy more in your store. You can typically offer multiple item purchases on items over $30 for example.

6) Buy two and get on free promotions. These price promotions work well with lower priced staple items that have higher margins. Accessories such as ties in a clothing store, small tools or even shoes can work well with this type of promotion and retain profits even when giving away one item. Promotions like this should be outlined in detail in your store using prominent signs. Typically the free item is specified as the lowest priced item of the three.

7) Offer a Discount Coupon. Entice customers to return for a subsequent shopping visit with a discount coupon of either a direct cash value such as $10, or a percentage discount. You can create a coupon that either expires before Christmas to induce customers to return prior to this date and shop again, or in January to build traffic after the holidays.

Offer a Discount for New Customers. If you have a loyalty program, entice customers to sign up with a discount for their first purchase in your store. This has become a common strategy to build clients for cell phone, cable and other communications companies that you can also adopt.

Take Action Today:

1) Review these powerful pricing strategies and determine which ones are compatible with your type of business and launch a campaign NOW to capitalize on the holiday season.

2) Plan which campaigns you’ll launch after the holidays to increase traffic and sales during the slower post-Christmas months.

3) Discuss with your employees these and other methods you can use to brand your store as a strong price and value driven retailer.
retail, retailer, leadership, operations, sales, merchandise, finances, recession
economy, stock market, sales, promotions, discounts, loyalty

Shopping Habits Are Polarizing More Towards Needs Based Purchases

In an earlier article, I spoke about new buying mentalities for Baby Boomers and their offspring. These aging generations are trying to buy items that will preserve their youth. They’re adopting younger lifestyles and embracing “green” products with great enthusiasm.

These purchases still fall into the discretionary spending category and I predict that 2010 will be a year where these two age groups further reduce discretionary spending and focus largely on needs based purchases.

This will be more apparent with the classic baby boomers but a secondary consideration for their aging children. Both groups will migrate to a needs based mentality for different reasons. The baby boomers have seen their net worth and retirement eroded by the 2008 stock market collapse compounded with significant drops in their home equity position. Many boomers particularly those approaching retirement will not have enough years to regain what they have lost and hence a change of plan must be in order.

Baby boomers are now realizing that they own just about everything they need to get by. Discretionary spending on clothes, lifestyle, electronics and fashion will drop by 2010 for what has been considered the most prosperous and highest spending age group in past retail eras. I predict that baby boomers will use what limited cash they have on food, necessary repairs and even perhaps buying the first used car in their lives to save money as their automotive needs diminish.

Their children will have other reasons for adopting a more needs based buying mentality in 2010. They still have many discretionary buying aspirations but are at a point in their lives where they are much more in debt than their largely paid off parents and unemployment levels are near 10% with low expectations of any improvement in 2010.

This may be the last Christmas for some time that reflects any significant degree of discretionary spending. Stores that want to survive in 2010 must reinvent themselves and offer a stronger needs based product line. Retailers must transform as much of their retail line into items that are perceived as practical, problem solving and durable. Items that traditionally are regarded as wants based items must be marketed and presented as merchandise of good value, durability and versatility in this upcoming year of great challenge for the retailer. This approach will justify the purchase in the minds of the new needs based consumer.

Understandably, product lines for this year are a done deal. However now is the time to evaluate and reinvent your store as the older consumer demographic groups evolve to a survival based mentality in 2010.

Take Action Today:

1) Start your research NOW determine what percentage of your store focuses on needs and wants based buying decisions.

2) Set a new target for 2010, in which you’ll offer more needs based products and fewer wants based ones. I

3) If your retail business is largely a wants based genre, determine how you will present your products along the lines of durability, value and versatility.

retail, retailer, leadership, operations, sales, merchandise, finances, recession
economy, boomers, fair trade, green, youth, diversification

Source Out Complimentary Items Under $20 That Sell In Any Economy

Even though we’re less than two and a half months from Christmas, there’s still time for the retail entrepreneur to diversify their product line and offer more opportunity for their customers to make a buying decision. Approach your current merchandise sources for new products that they may have neglected to show you, because it doesn’t fit into your previous buying habits. Your current suppliers may even have a few pallets of merchandise they want to liquidate at rock bottom prices. If you offer these products at phenomenal prices, customers will overlook the fact that it doesn’t quite fit your brand identity. To get around the brand issue, label them in your store as a “Special Purchase” and liquidate them through the holiday season.

If your current suppliers don’t have any products that can help you diversify, make a few phone calls to other suppliers and see what merchandise they’ve got kicking around that they may want to liquidate. Special purchase diversification take a little “out of the Box” thinking. An auto parts supplier can bring in a rack of windbreakers at sell them at great prices and offer his customers great value. His customers will find a quality windbreaker very useful around their own shop in the winter months to come. A food store can diversify into small appliances. If you sell bread, a great toaster at a great price will appeal to this array of customers.

For the holiday season, consider stepping outside of your brand with special purchases and think about the diverse array of needs your customers has that you can fulfill. He may buy his hardware and tools in your hardware store, but what other things does he buy on a regular basis somewhere else? In this case, can you offer motor oil, office paper, washer fluid or a handy raincoat to this customer during the high traffic holiday season? By diversifying, you can convert this purchase into your store, and if lucrative enough, the product line can even be perpetuated after the holidays.

These days, in our challenging economy, consider the price points below $20. Impulsive and out of the brand buying decisions by your customers will appear justified in their minds if you stay under this price limit. In fact, diversification with pricing from $1 to $10 situated near the cash desk is a powerful strategy for add on sales.

Take Action Today:

1) Start your research NOW and source out some low priced products that diversify your product offering.

2) During the holiday season, capitalize on the increased traffic and think outside your brand. Offer price and great value, preferably under the $20 price point.

3) Consider the diversity of your customers’ needs and convert purchases they make elsewhere into your store.

4) Contact suppliers that you currently do not deal with as well, and ask if they have merchandise they wish to liquidate and get out of their warehouse. Market these as special purchases at rock bottom prices. If you buy well, you’ll still preserve solid profit margins even with these promotional products.

retail, retailer, leadership, operations, sales, merchandise, finances, recession
economy, diversification

These Large Retail Groups Try to Turn Back the Clock While Embracing the Environment

As the economy seems to be recovering (whether the recovery can be sustained is material for another article), Baby and Echo Boomers are still focused on price when shopping, but have adopted two new buying mentalities. Curiously, both of these trends almost intermingle in their nature. These two key buying groups are getting older, and of course the Baby Boomers are entering their retirement years. Both groups are trying to live younger lifestyles and refuse to face the elements of aging like earlier generations. Combined with refusing to age traditionally, they are pursuing younger activities that are also good for the environment. Largely, people powered activities that do not pollute or stress out our environment are the hobbies they prefer. These customers want to feel younger on their mountain bikes, cross country skis, snow shoes or high ended canoes. Feeling young without leaving a mess for their children makes these boomers feel good about themselves and their lifestyles. Dreaming about huge power boats, snowmobiles, ATV’s and other complex machinery is on the way out.

Although this group is affluent, not all members within these demographics can be considered wealthy. The crash of 2008-2009 eroded many Baby Boomer pension funds. However this group is prepared to pay an average of 20% more for “Fair Trade” and “Green” products. Products that balance world trade for the third world and preserve our precious resources gores hand in hand with the Boomers’ mentality of a younger lifestyle that will leave the earth in a better state for the future.

I think that his trend is commendable and can only grow. Will YOUR retail organization cater to this trend and capitalize on younger and greener buying habits? Even adding a line of hiking boots to your clothing store is a modest start in the right direction. Just about any activity that is people powered will be of high interest to these customer groups. In fact, many Boomers are now planning their retirement in hope of living a car free lifestyle, not only in the larger cities but in smaller retirement hubs that design communities with amenities within walking distance of the homes.

Make sure your store empowers Boomers to turn back the clock in a green way!

Take Action Today:

1) Review these new trends of Living Younger through Green activities with your retail team.

2) Brainstorm with your team and add appropriate products to your store

3) Market these products in your store with prominent signs and promote them as youth oriented green products that connect with the Boomers.

Retailers Must Dazzle Customers Through Their Associates

The First Customer Engagement Conference hosted by Retail Touchpoints revealed that customers experience at least one negative retail experience on every shopping trip. Not surprisingly, customers dwell on these experiences and will share their story with at least two other friends within their network, according to their data. Customers who have bad experiences in a specific location also plan to take their business elsewhere, and as we enter the Fall and Christmas buying season, the bulk of their annual shopping budget will be spent elsewhere. If your store has delivered a bad experience for a customer, they’ll be buying all their goods over the next few months at the competition, likely never to return.

The survey indicates that nine out of ten bad experiences do not involve product, price location or other related factors. It’s the interaction with the sales associate. Being unable to find a sales associate may be the start of a bad customer experience, however indifference, low enthusiasm, poor product knowledge or no desire to dazzle the customer once a sales associate is found stays a long time in the minds of the customer. I have stated many times in the past couple of years how the retail experience paradigm has shifted to a price driven decision process. However, customers still expect reasonable service and sales associates that demonstrate knowledge and pride regarding their products and store. An altruistic approach to customers will never go out of style!

Now is the right time to step back and evaluate how your team interacts with the customer. It’s critical that you’re preparing for the Fall and Christmas season and that sales associates are trained and equipped to dazzle your customers. They say retail is like theatre. When the curtain goes up will your team be ready?

Take Action Today:

1) Study your team on the sales floor and evaluate the current customer experience. Determine levels of product knowledge, enthusiasm and their actions that dazzle the customer.

2) You should have a structured system to demonstrating and selling your product line. Do sales associates follow the system professionally?

3) Determine what remedial action or training is required and allocate resources to complete these plans within 2 weeks.

4) Consider what remedial training is required on an individual basis, and schedule personalized training as deemed necessary.

Retail Systems of the FREE and not so FREE

My last survey of Retail Point of Sale (POS) systems indicates that there are in excess of 1000 companies out there selling their software. They vary greatly in prices and features and can be really confusing to the smaller retailer, especially one that is starting off in the business.

To complicate things, there are now about twenty free POS packages out there that appear full featured, robust and expandable. Fortunately, the implementation of PC’s has made proprietary software less relevant and most POS packages will run on any PC with a Pentium 4 processor.

Properly installed and managed, POS systems will make money for the store by enhancing effectiveness and efficiency. It’s more important to develop a wish list of what a POS system must do for your organization and then find the ideal solution than dwell on simply the up front cost. Moreover, a POS system should be expandable and flexible. As your organization evolves so will your POS requirements. A good example may be tracking personal productivity. All retailers want their POS system to track sales data, best sellers and average sale. Down the road, you may want to track sales by employee, by hour or even age of inventory by SKU.

The point is, your POS wish list will likely expand as you discover other metrics that you want to track. One of the criteria to review is whether the system offers many retail metrics, or at least can be expanded later with the addition of modules from the software vendor at a nominal cost.

So, speaking of cost, is considering a free POS software package a reasonable exercise?  Again, whether it’s free or not, make sure that it meets your current wish list of features and can address potential requirements in the future. Although free POS systems may work for your stores, they may not be free in the pure sense of the word.

Most POS systems are written by a group of altruistic and well meaning software developers, but little support is offered. It’s inevitable that you’ll face assembling your own hardware and installing the system yourself. Most come with sparse documentation and you’ll also face the challenges of training your store team on your own. For most retailers, the exercise can be extremely frustrating and take your focus off of what you want to do, and that’s build retail sales and clientele. Software installation, customization and training may become an unplanned consumption of your valuable time.  The last thing to consider is that with limited resources, free software of any type is often not thoroughly tested and may have bugs or even viruses.

Does this mean that FREE POS systems are a total waste of time? Not necessarily! Free POS systems have merit for those with a strong knowledge of PC’s as well as other POS systems and can install, customize and run a system through a shallow learning curve. For those that like to tinker and see FREE as a beautiful thing, free POS software can be appropriate for this genre of retail operator. If computers are mysterious black boxes to you, it may be better to pay what you can afford to buy a POS system that will be installed and configured for you, with ongoing support a phone call away so you can focus on your core responsibilities - build your business and sell sell sell!

Take Action Today:

1) List the top ten features you want in a new POS system. Does your current system meet these needs? Have you reviewed the various POS systems out there in your price range? Do they meet your criteria?

2) Do the POS systems you are considering offer other significant options in the future? Can new features be easily added at a modest cost?

3) Are you prepared to exchange time for money in dealing with a free system? Do you have the necessary knowledge of POS system and PC’s to make free systems cost and time effective?

retail, retailer, leadership, operations, sales, merchandise,
service, selection, employees, pricing, value, point of sale, cash systems