Before I share how specialty retailers can survive and thrive, I have a question for you...
Have you ever played Jenga?
It’s a game where players take turns removing one block from a tower constructed of 54 blocks at a time.
Each block removed from the bottom is then placed on the top of the tower, thus creating a progressively taller but less stable structure.
A lot of specialty retailers get some loyal customers, they build a brand, and in their own way, they build their tower. Like many Jenga players, they do many things right in the beginning.
But for retailers, when the inevitable winds of change blow with increased competition, the retailer can be rocked to the core…or even collapse.
The U.S. boasts around ten times the square footage of retail space than most other countries. That means there are more places to buy more stuff than anywhere else in the world.
Some retailers run to technology for salvation as fewer shoppers linger at the mall, walk into stores, and buy less impulsively just because.
But for those retailers, they’re just building a taller tower…
As time goes by, every business notices holes in its foundation. How they handle those holes tends to separate them into two camps…
They either settle for where they are and fall backward, or they push themselves to keep moving forward and thrive.
Those brands or stores with whom I have the privilege of consulting always seem to be working to create a stronger foundation, or if some of the metaphoric blocks are weak, they bring me in to strengthen their existing foundation.
Here are 7 Critical Things Specialty Retailers must do to Thrive
Offering an exceptional experience is a standard, not a rarity, when:
Every inch of your store is thought out to how it could surprise and delight
You add a professional retail sales team carefully schooled in modern retail sales techniques
Your sales associates are constantly consumed with making everyone else’s day before they try to make their own day
If you turn to technology to engage shoppers, you’ll create an even greater distance between you and the customers you’re hoping to create.
Excellent customer service evolves from a curiosity about the individual human being in your store and why they chose to drive past other competitors to shop with you.
Offering options when it comes to products, asking permission of the customer if you have to leave them alone, and providing wisdom when comparing and contrasting similar products are all hallmarks of an exceptional customer experience.
2. Buy intelligently and manage inventory closely
Newer retailers tend to go hog wild when buying what they think will sell. After all, it’s fun to buy things without thinking about paying for them.
The smart retailer is very familiar with their merchandise turns and margins. You want to treat your open-to-buy like it is your own money - you don't want to see it languishing on the sales floor collecting dust.
For example, having every type of bicycle to meet every need may seem like a good idea. However, fitting them all into a small space usually means rows of bikes that overwhelm customers and actually lose sales.
It is the same for cosmetics, shoes, and many products, where too much inventory makes shopping a chore.
3. Market focused on what the customer needs and not on your need for their money
So you’ve got a new product? You’ve got a sale? So what? Who doesn’t? Unless you focus your marketing messages on what the customer gets out of shopping with you, you’re like a needy school kid saying look at me all the time.
How do you help your customers live a better life?
What challenges do your products solve for them?
Focus on answering those questions in your emails, ads, and status updates. Over time, you'll find a tribe of supporters loyally supporting your business.
Not sure if you are doing it already? Ask yourself, "If I were a customer, would I care about this?" If your answer is no, change your marketing message.
4. Train staff with systematic management
Never forget that your job as a retailer in this world of hope-depleting setbacks is to inspire your customers to do better. Not to give in, give up, and retreat into feeling isolated or sorry for themselves.
That goes for your employees as well.
Having the right processes and religiously training your employees make the difference between a retailer who is putting out fires all day long and a low-drama yet probably high-profit shop.
Train with a checklist so everyone receives the exact same information. Help each and every employee to open their hearts to a stranger and inspect what you expect regularly.
5. Manage your financial information
Data informs everything from employee management to open-to-buy and cash flow. Those who believe out-of-sight is OK often have a rude awakening.
Set up automatic emails of KPI reports every Sunday night so you have fresh information to act upon every week. Have your payables on a regular schedule, i.e., all bills received by or on the 20th are paid two weeks later.
Always be aware of and ready for your quarterly tax bills and necessary capital expenses. Get a business line of credit before you need it.
Managing cash flow effectively means you are always aware of future obligations, leading to lower stress levels.
6. Strategically merchandise your visual displays
Visual merchandising cuts down your hundreds of SKUs to a manageable few while making shopping fun. Regarding windows, the focus has to be on a normal person's height.
The easy tip is to go out to your front window and look into your window. Have someone use lipstick or something to mark the outside of the window at the height where your eyes are.
The lights in the window have to aim squarely in the middle where your eyes are focused. Inside the store, the best and brightest merchandise has to be displayed at the front. Keep clearance items in the back as shoppers' interest decreases the farther into the store they venture.
I had one client sell a $500 ski jacket the day after we re-merchandised his whole store. The jacket hadn’t sold in months prior. Another found a sales increase of 30% simply by creating the right displays throughout the store.
7. Plan for the long-range
On many days, just getting through the day-to-day is tough. But you must get up in the blimp and regularly look down on the whole playing field.
This vantage point will allow you to see:
The opportunities you’re missing
What new and innovative products your competitors are offering
Which of your employees need additional opportunities
... the works...
At the same time, you must always keep your long-range goal in mind. I suggest that the goal should be to craft a life you’re proud of, not a life of just working. That means you must look at succession planning and the metrics needed to sell your business or hand it off at some point.
No one will buy a business that is unprofitable or dependent on one product or one personality.
What happens when you get these foundations in place?
You have less dead inventory.
The merchandise you buy is based on data, not hunches.
You create an exceptional experience for everyone who comes in, not just for your regulars.
You are less dependent on running sales and more on finding what’s new and different to offer your customers hungry for your vision of the world.
Your windows and displays become your silent salespeople, focusing distracted shoppers’ attention in a split second to consider buying your merchandise.
Your employees look forward to coming to work and do not call in sick.
Your intentions are focused firmly on the future and how to make everything run more smoothly and profitably.
Stop doing things that don't focus on the customer
Yes, you can look for easy choices, like adding a new line to grow your sales. You can buy a bunch of iPads to keep track of stock and offer BOPIS. You can try almost any new shiny object. (Remember when everyone but me touted Groupon as the best way to market their business?)
But in the end, just building a taller tower without fixing the fundamentals makes you even more vulnerable to Amazon and its online sales stats.
There’s no choice worth making that doesn't make you question why you do things a certain way, say things a certain way, or allow certain things because change can produce short-term stress and anxiety in exchange for a long-term benefit.
And remember, you always have a choice between being stuck and moving forward.
Stay focused and continually address these seven critical areas and you’ll have the ability to grow your retail sales and survive. And as you get really good at it, thrive in the face of an always-on consumer.
No matter how high your tower of blocks is…
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