PERSPECTIVES

There's a very important annual job for you, the owner, and all of your senior staff. It's vital, and it involves your presence.

The pressures are mounting on your stores, and in particular, your front line staff. 

• Noticed all the "help wanted" signs in stores, coffee shops, restaurants? It's not just you; lots of (other) businesses are having a tough time with finding and keeping good help. 
  
  In fact, a nearby McDonald's posted a notice on its front door acknowledging that they were understaffed due to no-shows, and encouraging (imploring?) customers to be considerate to the people behind the counter who are there to serve them.
   
•  Meanwhile, the deadlines for online orders to arrive before Christmas are fast approaching. This will lead to a surge in in-store shoppers. And more demands on your front-line staff.

For most retailers, especially this year, reducing inventory is priority #1. With talk of a 2023 recession still in the air, lingering inflation driving up costs, and rising interest rates, cash is definitely king this year.

Time to revisit your year-end strategies for meeting your targeted ending inventory on December 31. If you are like many retailers this year, with plenty of merchandise in your stores, you know the challenge:  how best to turn that inventory into cash? Quickly! Especially without looking like a distressed merchant.

Here's one answer for how to do that. Focus on improving the productivity of each shopper who comes to your store. That is, increase the IPTs (Items Per Transaction.) Make it easier, more compelling and more fun for them to buy more items from you. 

Each year at this time, our thoughts turn to turkeys. 

No, not the ones that will adorn many dining tables on Thursday. But the "turkeys" lurking amidst your inventory. You know; non-selling, distressed, slow-moving, old, unappealing leftovers among your merchandise. 

But this year, frankly, our worries extend beyond the turkeys. 

Here are some of the reasons why.

• All the gloom and doom talk about the economy and recession continues, affecting consumer attitudes.


• With few pandemic or supply chain issues, many retailers have more-than-ample inventory this year, unlike the previous two years.


• Inflation is impossible to ignore, especially for those who drive cars or shop for groceries.

 

As a result, in this environment, consumers are scaling back their discretionary purchases, and/or choosing to spend on travel, dining out, or other experiences versus retail merchandise. 

Not an upbeat prospect for retailers, is it?

What is the definition of "value" for customers? Pretty straightforward, actually.

• Value = benefits received for the burdens endured.

Wait. What? "Benefits received?" "Burdens endured?"

Turns out, the only single answer to "What is value?" is, "It depends." 

Don't just roll your eyes. What constitutes value for your customers increasingly is a make-or-break part of retailing. 

Consider this retailer, whose sales over the last 4 weeks are down 12% compared to last year.

Some retailers in this situation essentially freak out. 

But others know to keep asking questions. Before they decide what to do next to fix lagging sales, they want to know "Why?" 

So, here is one way to get to the numbers behind the numbers; to begin to know the "why" of your sales trends.

All it takes is tapping into the data that's already in your POS system, and putting together a little summary tally sheet. Here's one example.

Except for the lingering sugar high, Halloween is soon to be behind us. Retailers know what that means: on to the Holiday Season!

Of course, for most retailers that brings a major focus on sales. 

But, savvy retailers are focused especially on the targeted ending inventory on December 31. Those retailers are carefully watching sales reports, and are poised for action. 

• Each week, they identify "What's not selling yet?" And they do something about it! Move it around on the floor? Display it differently? Pair it with merchandise that IS selling? Lots of choices. 

As the Holiday Season approaches, finding good help promises to be especially challenging for retailers this year. 

Then, we read "10 Things to Know to Get And Keep Retail Jobs," a to-the-point commentary from Bob Phibbs*, who specializes in retail sales training. 

Here are his Top Ten recommendations for prospective retail employees:  

• "Performance is Key"
• "Treat Customers with Respect"
• "Go the Extra Yard"
• "Be on Time"
• "Don't Gripe About the Hours"
• "Be Flexible"
• "Don't Be a Drag" 
• "Be a Team Player"
• "Respect the Rules"
• "A Cut in Hours is a Sign"

You've seen all the headlines. Worldwide inflation. Dire warnings of a coming recession. Big time discounts at retailers due to boatloads of inventory. Amazon doubling down on their Prime Day(s) sales. Shoppers shopping early in anticipation of rising prices. 

Shaping up to be yet another "unprecedented" Holiday season for retailers, isn't it?

And a wonderful opportunity for all merchants!

How best to start? Set the boundaries.

• First, specify how much inventory, in total, you want as of December 31. 
• How much by department?
• Category?

Next, establish clear routines for monitoring inventory levels.