The Christmas count down is on (or should be!)

Today, 14/11/2011 is, 41 days to Christmas day 2011.
Are you as a retailer ready to capture your share of customers?
It's not too late to, there are still a lot that you can do to make this season as profitable as possible.

My top 10 things to check are;

1. Product - If you haven't ordered those key items, place an order this week with your supplier. As volumes increase, the logistic streams reach capacity and deliveries are often late. Customers are impatient and will not or should not wait for the stock to arrive. Keep an eye on hot / new items, check if more stock is available as a rush order if needed. If you haven't got it, you won't sell it!
2. Price - Customers, whilst starting to spend again, will still be shopping around for the best value. Check that your prices are set at the correct level. Always be prepared to move on seasonal items. Any christmas related merchandise will be hard to move post Christmas day, and it will cost you money to hold it until next year.
3. Place - Have a good honest look over your shop. Stand outside the front doors as a customer. Now close your eyes, 1,2,3 open, what do you see first? Would you be enticed to come inside? Does your shop look like it is managed by the Grinch? Get in the spirit and put up decorations, and carry the theme through from front to back. Remember also, that the frequency of visits increase over the next 40 days, so keep the store looking fresh at all times.
4. Staffing - You do not want to get to the busiest week of the year and find that all your staff plan to have a holiday! Lock in your rosters now. Your staff will need some time off to enjoy the season and recharge, but working in retail, they have to expect to work when you need them. By forward planning and gaining a commitment now, the next 40 days will be a lot easier on everyone. Preplanning will help to avoid any surprises.
5. Supplies - Nothing is worse than running out of shopping bags or register rolls 2 days out from christmas! Check and place top up orders now from your regular supplier, for all consumables, pens, paper, bags etc. If you have last years order history, check and use that, if not keep a record now for next year.
6. Maintenance - Check this week that everything works and avoid paying a hefty call out fee on christmas eve. Also check that you have a current list of emergency call out numbers for all the key areas. Also check that your key staff know where the emergency callout phone list is!
7. Promotional planning - Nothing should occur adhoc. Plan now for what promotions you will have each week / day for the next 40 days. Theme each week as you count down to Christmas. Last minute idea suggestions, impulse ideas, gift register, there are many ways to give your customers a reason to buy from your business. Stay on task, focus on your customers, listen to what they are saying and adjust your approach as needed. Check that your staff know what is on special and when.

8. Watch your market - Be aware of what everyone else in your market is doing. That does not mean that you should copy every idea you see. You just need to do it better then they do. What your competitors are doing may not work, but be aware just in case it is a winner idea / concept.
9. Keep records - Christmas happens every year! But when you talk to some retailers you would be forgiven in thinking that it was the first christmas that they have seen. A good way to prepare and be ready is to keep a diary or list by day of what you did and what worked and did not work. This will avoid many costly mistakes from reoccuring next year. To succeed, you need to make mistakes to learn. But you should never make the same mistake twice.
10. Have fun and enjoy the season - Your customer will quickly sense your feelings. No matter how hard your day is, no matter what is going on, you must always give a great impression on your customers. A strong customer service focus cannot stop just because you are busy. Christmas should be and is a joyful time of the year, a time to celebrate with those we love and cherish. Reward your staff in what ever way you can, acknowledge their hard work. The rewards do not have to be monetary or elaborate, a simple gesture of nibbles and drinks in the staff room and coupled with a few well chosen words of thanks can do wonders to the moral of your team.

May the cash registers ring loudly for the next 41 days,

Good trading,

Geoff

Trust-a lesson often learnt to late

What does it mean to your business to have someone’s trust?

What does it cost to gain someone’s trust?

What does it cost to keep someone’s trust?

Whether it is a customer, a supplier, a business partner,or an employee, trust is something that whilst it is hard to put a definitive price on it, it can ruin even the strongest brand very quickly.

Trust in business was explained to me once at a training session in this analogy, by someone who I cannot remember, but their basic message has stayed with me for many years.

Your business is like a bucket under a dripping tap. The water dripping out of the tap seems worthless, without the bucket it would quickly disappear, evaporate, soak into the soil and not be seen, or be missed by anyone. However with the bucket (your business) under the tap, the drips of water (the trust) slowly collect and increase in volume (value). Over time the bucket fills up and you now have a reserve supply of water (trust in your business). Small events may happen that reduce the volume in the bucket, but there is still plenty left, what value do you now place on the full bucket of water? However when something significant happens and the bucket is tipped over, all the water (trust) is lost very quickly, it is almost impossible to stop the spill. You now may feel great loss for all the water (trust) lost, which cost you nothing in the first place to collect. If only you had done more to protect the bucket from falling over.

In any retail business you will always have events that push on your bucket, an upset customer, late deliveries, an unreliable staff member etc. It is how you respond, and it what way and how quickly that can keep your bucket upright, keeping the value in your brand, your business.

Many businesses invest a large amount of money in advertising and marketing to build trust and recognition in their brand, only to put significant strain on the trust through events that are not at all times managed correctly. Most situations can be fixed more cheaply if handled quickly. Time costs money, emotions build, and the spilling of trust commence.

Next time something pushes your bucket, stop and think. What damage potentially could this have on my brand? What value do I place on this relationship? Do I need this customer to come back and shop again? What future sales may I put in jeopardy?

Whilst we are all smarter in hindsight, if you were the CEO, would you have grounded your airline without warning? If you were the CEO of a book chain facing financial trouble would you have declined accepting your own gift cards from your loyal customers? What damage does not having that catalogue item in stock for the start of the catalogue? What do you think whenthe price scans up wrong at the checkouts for the second week in a row, did you pay the correct amount for the rest of your purchase?

Gaining and keeping trust is a life long lesson, which unfortunately too often is learnt the hard and most expensive way. Good trading, Geoff.

Retail, what next?

With all the uncertainity in the financial markets, share market volitilty and the slide in the US dollar over the past week, even the experts cannot predict even closely what will occur next.

What chance has the average small retailer owner operator have of being able to know how many orders to place, or what new lines to look at stocking?

How will the average customer react to all the changes that have occured over the past week alone;

• US Dollar has dropped 10c, which will put upward pressure on imports
• Fixed mortgage interest rates have started to fall, which may indicate less increase pressure on the variable rate.
• Share Markets have been running up and down in 5% swings in very large volumes, lots of on edge investors!
• The Recession word is getting used a lot more, self fulfilling prophecy?

We are constantly being told by our Political leaders that our Nation's financial fundamentals are good and it does appear to be correct, especially when compared to overseas economies.
So why does what happens on Wall Street, effect us so much? A lot of what happens, particularly in the share market, just comes down to the fear of being caught out and losing your hard earned cash in a major slide. Australians have a very high ownership of shares now, but many investors do not have a good understanding of the triggers that drive the market. Many investors buy for the correct long term reasons, but sell quickly on the first bad news received, or just because everyone else is selling.

The effect of the last few weeks will not be felt in full by Retaillers until several weeks time, hopefully by then we will be heading into the summer christmas season, when most Retailers make their profits for the year and the financial world will have stabilised and consumer confidence will have returned.

Come on Australia, open your wallets and start spending!

I can't see the clothes for the signage!

Currently as I walk through shopping malls and look in apparel retailers it is immediately apparent as a customer that stock is in bountiful supply, full size range still available in almost every style towards the end of the winter season, with spring and summer lines making their way on to racks as well. There seems to be no better example of a downturn in customer shopping (buying) habits than in the many clothing retailers. When money gets tight, or that extra cash is put into the mortgage just in case interests rates go up, one of the first discretionary purchases that is often put off until later is new clothes, as long as last year’s jeans still fit!

As a result of the long overseas supply lead time in Australia, orders are normally placed a season ahead based on what was sold previously and with an increase factored in based on current trends. This long lead time is due to us not having a local clothing manufacturing industry any more; clothing is sourced predominately from Asia and the Subcontinent with their low production costs that cannot be matched in Australia. Most clothing retailers do not want to get caught out not having enough stock to meet customer demand, and the attractive bulk purchase rates will always entice that extra few cartons to be ordered. A half full container costs the same to ship as a full one!

With this backlog of cartons that I imagine are still sitting in the stock rooms and reserves everywhere, comes the difficult decisions for the Management teams to take.

Do we discount the stock to get it moving?

How much do we discount, 20%, 50%?

What do we do if it still does not move?

Spring / Summer stock is arriving, do we put out now?

Do we box up the winter unsold stock and hope that it is in fashion next year?

As I look through the many clothing shops I visit, being the dutiful Husband and sit outside fitting rooms with the other similar Husbands (wishing we were mowing the lawn or out fishing), one point really stood out.

I cannot see the Clothes for the signage!

This was not in just one Store, but every Store we went into. Large racks bulging full, straining so much that when you try to remove one coat hanger five more fall off, causing the already over worked staff member to sigh and keep bending over picking up. The amount of signage screaming out in all colours and fonts, neat handwriting and messy, crossed through with extra markdowns, it just went on and on.

Many Stores still were also trying to use that amazing merchandising item, which is still held in high regard by many Store teams. That item that they hope can make the difference and sell all those thousands of dollars worth of inventory sitting idle, clogging up the supply chain all the way back to Shenzhen.

The sale balloon!

What is the solution you ask?

Well unfortunately this season is over for many clothing retailers. Many racks I saw still had full size ranges and were priced at 70% of the original price. The profit is now probably gone!

They can try to clean up those racks and free up space so that they can be shopped easily. We walked out of many Stores empty handed as it was just too hard to shop and find what we needed or may have been interested in.

Clearance lines must be looked after and displayed with as much detail and love as the new season apparel. Many markdowns can be saved if correct merchandising is adhered to throughout the season. Try merchandising clearance lines by price point, i.e. $10 racks. Try merchandising by size if volume permits.

And the most, most important point of all is to have sufficient staff allocated to keep the racks clean and well presented. No one likes to have to ‘dig’ through a stack of tangled garments and coat hangers just to save a few dollars to buy a garment that no one else has wanted to buy.

In summary,

The entire season’s profits can be quickly eroded if the correct disciplines are not used during the clearance phase in Apparel retailing;

·         Continue merchandising the clearance until sold (if you ignore the clearance lines it will hurt your bottom line in a big way!)

·         Only take markdowns as needed, the smaller the better, review daily as needed until the sell through rate increases.

·         Do not over do the signage; you have to see the Clothes still!

·         Keep the racks clean and tidy at all times

·         Rearrange, reposition as necessary, and keep the displays fresh. If it looks the same, your regular shopper will walk straight past.

·         Keep the balance right between clearance and new seasons garments. Watch the weather and adjust the balance as needed, daily if required.

Come on summer

Retail profits take a hit in 2010-2011

Retail profits take a hit in 2010-2011

When Customers stop walking through the doors or are always responding  “just browsing”, it is very easy to “externalise” and push the blame for slow and reducing sales figures on the Australian financial markets, interest rates, the emissions trading scheme, global trading downturn, the Greece debt crisis, or even the Chilean ash cloud!

You start to talk to your neighbouring Stores, your competitors and Head Office, everyone says that trading is tough at the moment. You start to feel that things are out of your control and you keep on doing the same things each day and week to keep your Store running. Sales will pick up next week. Sound familiar?

It is not your fault that customers are not buying is it?

Or is it?

You can do something about increasing your Sales, or profits or even better both, according to Geoff Hatton, General Manager of Retail Training Australia.

“People are still spending, there are still potential customers walking in and past your Store every day. You can turn those lookers and browsers into buyers” said Mr Hatton.

Now more than ever, Businesses need to focus in “internalising”.

Business owners and Store Managers need to have a good honest look at their total Store operation, take off the rose coloured glasses, and stand back so you can see the forest and not the trees!

It is an easy trap, for many small business operators (and large) to get caught up in what is happening today, right now and not put aside the time to work on your business and not just in it.

Again,

Work ON your Business, not just in it.

“Review your business plans, and write up one if you don’t. A business plan does not have to be some elaborate document. It has to be workable, something that you refer to consistently to stay on track. It is your recipe for success, your road map to help you find your way to financial success” said Mr Hatton. “You should keep referring back to your plan and keep it updated regularly. Set a date for the next review, include your Team in the planning, they deal with your Customers every day and will have lots of suggestions of what needs to be achieved. Remember your Staff have an interest in the Store succeeding as well” Mr Hatton went on to say.

You need to recapture the passion you had when you first started in Retail.

The most overlooked appreciating asset in any Business is their employees. Many retail businesses simply do not invest enough time and money into training and development of their Staff. A fully trained and competent Sales person on the floor can convert ‘lookers’ into buyers, sell add on items to customers increasing your average sale, this will have a dramatic effect on increasing your Store profits. Even a small store with only 350 customers a week selling each customer an extra $5 item will obviously increase their sales by $1,750 a week, which could be an extra $91,000 each year. That simply example can be the difference between making a profit and a loss. “Training your team can be the answer to your decreasing sales results” explained Mr Hatton.

With Customer buying habits constantly changing, and the continual growth in, online purchases increasing at a growing rate, Retailers now more than ever have to be creative and flexible to entice Customers into their Stores. What worked today to make a sale will not be successful tomorrow. All Retailers today need to have an online presence to capture the online shopper, or fear being left behind. Several retailers are doing this well, showcasing their range, new lines and specials online, interacting with their Customers via  Social media sites and then directing customers into their Stores to make the purchase. Retailers also have the constant risk of online shoppers using their Stores to touch and feel the items that they are looking to purchase, and then shopping around online for the lowest price available. “By having your Sales team trained in the correct sales techniques, the risk of losing these sales to the virtual shopping malls can be decreased” said Mr Hatton. Multi channel retailing can be simply and more cheaply done now as technologies increase and are more widely used. The rapid increase in social media sites can also be a benefit to Retailers enabling instant feedback and communication with your customers. Every Retailer would love to go ‘viral’ with their latest sales event.

“With the Government funded approved training in Retail for eligible employees, there is no excuse for Retail Businesses not to train and improve the productivity of their employees, cost of training is not an issue” said Mr Hatton.

Smart Retailers are taking advantage of training and up skilling their new and existing Store Teams, through government funded training packages with registered training organisations. Through the user choice funding programs, Businesses have the choice of who they choose to train their Teams and still qualify for government incentives when training is provided through traineeships.  It is the smart retailers that will survive and grow into the future.

 “Unfortunately those retailers that fail to respond to the changing customer shopping habits and do not invest in the training and development of their staff, will not have much chance of surviving in the modern retail world and will just be another boarded up Shop front in your local shopping centre” said Mr Hatton in closing.

Geoff Hatton after working for the last 29 years in Retail Stores in various locations and Management positions is now the General Manager of Retail Training Australia and is pouring his years of operational experience back into the training and development of the next generation of Retail Leaders.

www.retailtrainingaustralia.com.au

info@rtaustralia.com.au