Home » Blog » Blog » Archives for June 2009
Bob Phibbs' Retail Sales Blog

Archive for June, 2009

#Retailers Cut Your SKUS

A recent article in the WSJ, Retailers Cut Back on Variety, Once the Spice of Marketing talked about how all the largest chains are reducing choices for consumers. “Pharmacy chain Walgreen Co. is cutting the types of superglues it carries to 11 from 25. Wal-Mart Stores Inc. has decided that 24 different tape measures is 20 too many. Kroger Co. has tested stripping out about 30% of its cereal varieties.

In the next year or so, these and a few of the other largest retailers are expected to slice the assortment of products in their stores by at least 15%, industry executives and analysts say. ‘All that go-go 1990s where we were adding items in and adding items in, and people wanted more, more, more, more choice… just didn’t pay off,’ said Catherine Lindner, Walgreen’s divisional vice president for marketing development, at a recent conference. Looking at store shelves, ‘People say, ‘Whoa, you’re bombarding me. Help me figure out what I need.’”

If the big guys are doing it, you should be too.  Here’s how:

  • Take a look at your inventory categories’ sales figures by month and year-to-date.
  • Within each category, look at your bottom 20% – the ones not moving
  • Cancel all orders to replenish
  • Come up with a sale to clear them out
  • Use your money saved to add to your top two categories of merchandise

It’s never easy to let go of items we personally thought would be good movers but when you have 20,000 skus, how much duplication do you need?  The big boys know: not much. Same with you.

Michael Jackson Reminds Us: It's About the Work

The election in Iran, the improving economy, the GM bankruptcy, even iconic 70′s model Farrah Fawcett all took a back seat to the passing of Michael Jackson today. And for good reason. To paraphrase that old movie line, “We felt better about ourselves watching him.”

Forget the easy, over-hyped digs about his personal life. At the heart of why he was such an icon was the work. It was dazzling, fun, top-of-his game. During my speeches, I often play the Jackson 5′s “I Want You Back,” after a break. One time a woman said to me as it started, “I can’t believe you are playing something by Michael Jackson.” Another woman jumped in before I could respond, “Why wouldn’t he? I love his music!” Exactly. It was about the work, not the personality.

For your business and employees, it isn’t about what a nice guy you or your crew are.  It’s about the work.

I’m constantly amazed after a speech when people come up and tell me they’ve had someone on payroll for five, six, eight years and they aren’t cutting it. “But they’re so nice.”  It’s about the work.

Forget the personal traits. Heck, I had a guy who I had nothing in common with, the only reason we continued to work together is he got the sales. At full price. To 70% of the people he spoke to. With a smile and a repeat base we were all jealous of. Because of that, we could talk about business, how to do the sale better, what the next trend would be, how to close a hard sale. That’s what consumed his mind when he was on the clock.

He had moved out from Arkansas to southern California. He couldn’t find construction work and was sleeping in a gal’s back office at night; one step up from when he was sleeping on the street. He had used that address on my application.  He’d shower at the YMCA and walk to the mall.  He’d do his laundry at the local laundromat – he never looked out of place. He did this for about a month until he could afford an apartment.  I never knew until much later, he was strictly business.  It could have been easy to take his hard-luck story and make excuses if he hadn’t been able to sell. Could that be your crew?

My message today, in the wake of such an icon as Michael Jackson passing is to remember the work. His work; leave the personality out of it.  Is your employees’ performance memorable? Is yours?

Burger King's Seven Incher Sex Ad Hits New Low In Advertising

In the OMG what were you thinking department comes Burger King’s new foray into outrageous desperate behavior. Previously they had the subservient chicken where online viewers could type in what the chicken should do and generally the guy in a chicken outfit would do it. You can still see it here.  We had the odd person with a King plaster cast mask appearing in funny situations.

Both were designed to break out of what we were expecting. Not in the weird Quizno’s commercial way with rat puppets which were just plain disturbing.

BK 7 incher

Now comes Sex and the Burger from Burger King’s uncredited desperate ad agency in Singapore, (not as reported in other articles from their US ad agency.)

While I could go on and on about the sexism, the apparent reference to fellatio in both pictures and wording, “Fill your desire for something long, juicy and flame-grilled with the NEW BK SUPER SEVEN INCHER. Yearn for more after you taste the mind-blowing burger that comes with a single beef patty, topped with American cheese, crispy onions and the A1 Thick and Hearty Steak Sauce,” you have to ask yourself, besides prepubescent boys, who would this appeal to?

The race to the bottom probably started with the Carl’s Jr. Paris Hilton washing the Bentley commercial ad a couple years ago.

As to this BK  ad, the blowup porn doll approach seems confused. Go with me here. If this is indeed an ad for a target demographic of young men, and you want them to eat this 7-inch burger, are they in turn like the woman pictured? So should this be an ad in West Hollywood rather than West Madison, WI?

But besides that, we continue to see the dearth of fresh ideas in the fast food ivory towers including KFC and Popeye’s who’ve thrown freebie after freebie at us, executed it poorly across the board and done what more often than not? Pissed off their loyal customers.

Don’t get me wrong, as CMO of a coffee franchise, I enjoyed coming up with subtle titles that caught your attention including the Score, a drink made with Skor chips featured during football season and the Woody, a summer banana drink featuring wood-paneled surfer vans.  The-Woody-If someone wanted to infer something else, that was fine.

But to blatantly put such trash into mass media, you have admit, something isn’t working at the brand level.

An Ad Age article this week summed it up fairly well, “A big part of Burger King’s problems can be summed up in one word: McDonald’s.  And those problems are beginning to grate on Burger King’s notoriously restive franchisees, who say recent efforts from Crispin have failed to drive traffic to their stores and, even worse, are alienating would-be customers who fall outside the chain’s young-male target.”

mccafe_adThere’s cutting edge fun-loving and bleeding-edge pandering.

Compare all of this to the brilliantly executed McCafe launch last month which has Starbucks, Dunkin’ Donuts and others scrambling to stay relevant to a customer base suddenly considering and returning to McDonalds in the morning. McDonald’s got it right – grow your audience, don’t narrow it like BK is doing.

The trouble with desperation marketing is people can smell it on you and choose to avoid you. It’s time for a change at Burger King.  What do you think?

Eight Ways To Green Your Retail Business

GoGreenGoing green. Recycle, reuse, renew. These days you can’t escape the green movement and you shouldn’t.  But how to do it?

Here are Eight Tips to Green Your Business I’ve collected from smart retailers :
- Reuse all packaging material. When you look at it, how smart is it to throw out perfectly good packaging styrofoam, brown paper, bubble wrap, etc. only to buy new?
-Break down all cardboard boxes and reuse.  Some shipping companies will take them away and return as needed; just ask. Several retailers do this and have found it particularly effective.
-Don’t use water bottles. Instead use a water cooler and paper cups.  You could do this in your store, office or specify it at your next meeting or convention.
-No paper handouts for conferences. Consider posting them online prior, emailing them to participants to view on their computer or even provide attendees with a flash drive with all of the handouts.
-Buy local whenever practical.  It results in less petroleum and pollution. A benefit to you is less transportation costs.
-Stop mailings. Changeover your physical mailing list to become and email list. It saves paper and money plus you can do it more often.
-Stock bathroom better. Look for post consumer recycled tissue products to lessen demand for virgin forests.
-Replace lighting. Wherever it won’t affect displays, for example with general lighting, replace floodlights with compact fluorescents. Just make sure the new bulb fits entirely in the old holder if customers will see it. Nothing looks more third-rate than a bunch of pigtail energy bulbs sticking out of a ceiling fan, wall fixture or dangling from a ceiling. But for a display to pop, there is still nothing better than a halogen spotlight.

Bad pigtail

Bad pigtail

Correct compact flourescent

Correct compact fluorescent

Smart green retailing saves money and the environment.

Got good greening tips for business? Please share in the comments section below.

Learn how to green your wallet at www.retaildoc.com.

To Find Good Retail Locations: Check the Trash

22_suburbia1“Is now a good time to open a retail business?” I get questions like this a lot. If you have the money, the intelligence and desire to make it work -yes. Much like deciding to have a child or get married, it is your conviction that makes the difference.

If you want to open a retail business because you, “think it will be fun,” “want something to do,” or feel a need for “a change,” don’t do it. It would be like going into a bar at closing time, finding the worst possible person for you and then marrying them. If you think a divorce could be messy, wait until you see what happens to get out of a five or ten-year lease!

Part of your retail success will come in choosing a location; you don’t want to be 100 yards from success. Rent could be cheaper around the corner, on the backside of the development or in an older center but there’s a reason rent is cheaper – less traffic and visibility.  You’ll have to advertise more to get people to just find you so there rarely is any savings.

When I was helping select locations for a franchise, new franchisees would pitch me why a development was so good, “… and it’s surrounded by million dollar homes.”  After awhile, I began to question just how many “million dollar homes” an area could afford.

Now we know – few. In fact many of those homes are still vacant or being rented. Here’s a tip for you looking at locations with leasing agents who might be selling you on a bill of goods about an area: check the trash.

WasteManagementRecycling

With so many abandoned homes in major markets like California, Florida and the like, you want to know how many customers you could actually count on in your two-mile trade area.

Here’s how: Find out the trash collection days and times for your intended area.  Go and observe how many have put their trash out prior and you’ll have a good indication of how dynamic your neighborhood really is.

Is now a good time to open a retail business? It can be if you use tricks like these to make sure you aren’t sold a bill of goods.

« Older Entries