Why Some Retailers Are Doing Better Than Others In The Current Retail Environment
Why Some Retailers Are Doing Better Than Others In The Current Retail Environment
However, while evaluating the overall retail situation I noticed that many of our own retail store customers had done well or at least fared better than their competitors in the same retail segment(s). I thought it might be of interest to some of you to analyze what they are doing that is working. While there are of course differences in approach based on retail segment, target customer, etc., I came up with the following common factors:
1. Extra marketing to get customers in the door. Instead of cutting back first, which would have ensured a slow season, they managed to figure out how to get more traffic in the door. In some cases this took some extra spending, but it was a carefully planned and controlled action based on past successes. In many cases this included effective use of e-mail, even though the sales themselves were not made online but rather in store.
2. Knowing their customers and marketing to them. They made sure they stocked merchandise that they knew their customers will buy, down to specific brands, certain types of merchandise, certain price points, etc. A failure to do this, such as KB Toys not having the hottest electronic games and toys, can be fatal.
3. Good promotions. In today’s market customers are avoiding debt (or have less credit) and are more careful with their money. Some retailers literally changed their promotions on a daily basis based on what worked, and used a variety of options such as extra gifts, buy x and get y, etc. that looked like added value beyond just price discounts.
4. Careful inventory control. They avoided product mark down like the plague but were also careful not to stock out on hot items. They have a system in place that provides the knowledge and ability to very carefully balance that, and their systems extend to their supplier network as well. Also, this builds heavily on the planning for and success of the previous three items.
5. Excellent customer service. You would think this is a given, but the companies that did well went to great lengths to make sure customers consistently have positive experiences, across all stores and all sales associates and managers.
You may be thinking that the above points sound like Retail 101, as they are some of the most basic basics that exist in retail. However, a few other things set the successful stores apart from the rest:
• They did all these things, not just some of them
• They consistently did them, not just part of the time
• Every person and every function, from how they hire and train to their supply chain and retail systems, are built around and fully support the achievement of all of the items.
In other words, not only do they know what they are supposed to do, they can execute really well on them across their entire organization!
Logically, the chains that fell below average would fall into one or more categories:
1. Didn’t see it coming
2. Saw it but didn’t take action for a variety of reasons
3. Took action but not the right ones
4. Took the right actions but were not effective at implementing them
Most of the business owners I know are pretty street-savvy people, so I doubt that many of them didn’t see the current retail environment coming or didn’t know what they needed to do. I suspect a lack of effective action was more of an issue. In one of our newsletters I wrote about resolutions. Resolutions have a bad rap as they are notorious for their breakdown due to lack of follow through. If talk could be said to be ‘cheap’, then thought would have to be considered as free!
This is true in business planning too. One of my favorite quotes (not sure who said it first) is ‘Vision without execution is delusion.’ More importantly, failures in personal planning such as diets may be bad but you can always just buy bigger clothes. Failure in business planning can have very wide reaching negative effects on many people!
So, if your own company did well on a comparative basis you will be looking at how to reinforce the above points. Otherwise, you may be feeling the need to make some changes (perhaps major ones) in order to become more competitive, in which case you might find our white paper “The 6 Biggest Challenges Retailers Face Today” useful. The report contains a great deal of information related to developing a competitive retail strategy and successfully executing the plan, and is available for download our Web site.
Why Some Retailers Are Doing Better Than Others In The Current Retail Environment - To learn more about this author, visit Scott Kreisberg's Website.
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As the retail reports come in, much of the news is what we expected it to be. It should not have been much of a surprise to many of you that the government determined late last year that the US was in a recession, and the big chain discounters did well through the holiday season. Also, that some stores didn’t do so well, although I personally found Mervyn’s going out of business to be a bit of a surprise.
However, while evaluating the overall retail situation I noticed that many of our own retail store customers had done well or at least fared better than their competitors in the same retail segment(s). I thought it might be of interest to some of you to analyze what they are doing that is working. While there are of course differences in approach based on retail segment, target customer, etc., I came up with the following common factors:
1. Extra marketing to get customers in the door. Instead of cutting back first, which would have ensured a slow season, they managed to figure out how to get more traffic in the door. In some cases this took some extra spending, but it was a carefully planned and controlled action based on past successes. In many cases this included effective use of e-mail, even though the sales themselves were not made online but rather in store.
2. Knowing their customers and marketing to them. They made sure they stocked merchandise that they knew their customers will buy, down to specific brands, certain types of merchandise, certain price points, etc. A failure to do this, such as KB Toys not having the hottest electronic games and toys, can be fatal.
3. Good promotions. In today’s market customers are avoiding debt (or have less credit) and are more careful with their money. Some retailers literally changed their promotions on a daily basis based on what worked, and used a variety of options such as extra gifts, buy x and get y, etc. that looked like added value beyond just price discounts.
4. Careful inventory control. They avoided product mark down like the plague but were also careful not to stock out on hot items. They have a system in place that provides the knowledge and ability to very carefully balance that, and their systems extend to their supplier network as well. Also, this builds heavily on the planning for and success of the previous three items.
5. Excellent customer service. You would think this is a given, but the companies that did well went to great lengths to make sure customers consistently have positive experiences, across all stores and all sales associates and managers.
You may be thinking that the above points sound like Retail 101, as they are some of the most basic basics that exist in retail. However, a few other things set the successful stores apart from the rest:
• They did all these things, not just some of them
• They consistently did them, not just part of the time
• Every person and every function, from how they hire and train to their supply chain and retail systems, are built around and fully support the achievement of all of the items.
In other words, not only do they know what they are supposed to do, they can execute really well on them across their entire organization!
Logically, the chains that fell below average would fall into one or more categories:
1. Didn’t see it coming
2. Saw it but didn’t take action for a variety of reasons
3. Took action but not the right ones
4. Took the right actions but were not effective at implementing them
Most of the business owners I know are pretty street-savvy people, so I doubt that many of them didn’t see the current retail environment coming or didn’t know what they needed to do. I suspect a lack of effective action was more of an issue. In one of our newsletters I wrote about resolutions. Resolutions have a bad rap as they are notorious for their breakdown due to lack of follow through. If talk could be said to be ‘cheap’, then thought would have to be considered as free!
This is true in business planning too. One of my favorite quotes (not sure who said it first) is ‘Vision without execution is delusion.’ More importantly, failures in personal planning such as diets may be bad but you can always just buy bigger clothes. Failure in business planning can have very wide reaching negative effects on many people!
So, if your own company did well on a comparative basis you will be looking at how to reinforce the above points. Otherwise, you may be feeling the need to make some changes (perhaps major ones) in order to become more competitive, in which case you might find our white paper “The 6 Biggest Challenges Retailers Face Today” useful. The report contains a great deal of information related to developing a competitive retail strategy and successfully executing the plan, and is available for download our Web site.
Why Some Retailers Are Doing Better Than Others In The Current Retail Environment - To learn more about this author, visit Scott Kreisberg's Website.
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