Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"

YES! Send me The ROI NEWS
Your User Guide to The ROI • Tips, Tactics & Insights • Time Saver for Busy Retailers • Opt-out anytime • Free!
Rising technology expectations of your shoppers | Coping with a cash crunch | Compared your Benchmarks yet? | Savvy retailers guide to markdowns & clearances
Friday, February 22, 2019

From The Co-Founders

Keeping pace with your shoppers?

In an environment of time-pressed shoppers, large retailers are recalculating their cost-benefit analyses, and choosing to deploy more self-serve technology solutions. Moreover, with minimum wages rising, it can save them money while saving the customers' time.

Plus, as online shopping continues to expand, consumers increasingly expect the in-store experience to match their online control. 

If you think this increases the pressures on all retailers, you would be right. At least, that's what a December 2018 survey confirmed. 

The Annual Connected Retail Survey* of U.S. consumers, ranging from 18 to 60 years old, found that a whopping 85% expect retailers to provide their associates with handheld or fixed devices to have instant access to inventory and price information within a store. This is a nearly 51% increase over 2017. 

That's not the only issue with dramatically heightened expectations.
  • How about mobile registers; those customers expecting this check-out convenience increased 64% from 2017. 
  • And get this: 73% of respondents favor self-service technologies to reduce staff interactions and streamline the experience.
All that online shopping has made customers far more accepting of – and expecting of –  in-store technology and time-saving processes. (BTW, we are not selling any technology; we're just bringing your attention to this trend.)

Here's the issue for independent retailers: When consumers can have that experience in a fast-food restaurant, shouldn't they expect the same kind of efficiency in a store like yours, selling much higher-priced merchandise?

Here's our suspicion: most independent retailers, because they are using modern POS systems, are very likely to already have those capabilities available  to them. They just may be dormant.

Time to bring them out of hibernation!

What are you waiting for? Take a closer look at the user manual of your POS system. If you've got it, flaunt it! 
* Annual Connected Retailer Survey, SOTI, Inc.

Six Action Steps

It's true. Even a profitable retail business can experience a cash crunch.

Worried about running out of cash before you run out of payables? Don't despair. You CAN gain control of the situation. 

How to Cope with a Cash Crunch

See 6 specific, proven steps you can take – starting now! – to help you get your business through the crisis.

Put yourself back in control. And gain some peace of mind! 

Not in an immediate crisis? Good! 

Even a better time to check out these six steps. They are the foundation for avoiding future cash crunches.
Six Step Action Plan

Sharing is a good thing!

Let others know about The ROI
Forward The ROI NEWS to them.

(No obligation; it's just an FYI for them.
They have to opt-in to receive more.)
Share with a retailer

Compare your stores to the latest Benchmarks Trend Charts. Free!


Updated Retail Benchmarks Five-Year Trend Charts

These special trend charts are a snapshot view of the financial health and viability of each of 55 retail sectors.

Whether you are a retailer, or you work with retailers, The Retail Owners Institute makes it easy for you to get a quick financial health assessment of any retail business. Go here to find your retail segment. 

How do your stores compare?


Smarter Markdowns, Made Smartly

The Savvy Retailers Guide to Markdowns & Clearances

Free accessWebinar of the Week • Now thru Thursday February 28
Sigh. Sometimes retailing doesn't turn out quite as you had planned.
  • Maybe last year failed to live up to what you had predicted, and budgeted for.
  • Did you overestimate the "pent-up demand" for a generous order of a particular item?
  • Are there areas of your inventory brimming with overstock?
Relax! There IS a way out of this mess!

If you find yourself long on inventory and short on cash - whether from overbuying, expanding lines too quickly, taking advantage of "special buys" or overestimating sales - don't panic.

You still can whip your inventory back into shape before it devours your profits. The key: act quickly, but be smart about the timing!
Free Access Now
Gloom and doom? Not quite, but... | Monthly Retail Sales trends deserve attention | 2018 Benchmarks for all retail segments | Tell-All Key Metrics  
Friday, February 15, 2019

From The Co-Founders

Attitude does matter!

The retail industry is full of "uncontrollables." Foremost among them is the customer: will she or won't she buy? How much? From who or where? When? 

Then there is the weather. And the economy. Or the stock market. Or the outcome of the Super Bowl. Or an election. The list could go on.

That is why we at The ROI carefully follow measures of consumer confidence, as well as business confidence. Attitude does matter!

We therefore paid particular attention to two reports that came out on February 11. One focused on declines in small business optimism; the other involved a "recession forecast" by small business owners. 

According to a survey by Wells Fargo and Gallup, "Small business optimism takes a dive as revenue growth eases." As reported by Joyce Rosenberg* of the Associated Press," fewer owners reported revenue growth in the quarter than previously," and "Owners also had diminished expectations for their revenue in the next 12 months."

Meanwhile, according to a CNBC/SurveyMonkey Small Business Survey, "Main Street has caught up to Wall Street, at least when it comes to increased fears of a recession." And Wall Street is showing signs of concern: "A recent Wall Street Journal survey of economists finds fears of a recession at a seven-year high." Eric Rosenbaum reported** further, "A nationwide survey of more than 10,000 Americans conducted by SurveyMonkey in January also found a high level of recession anxiety, with 63 percent of Americans saying a recession was likely in the next year and only 10 percent saying it was 'very unlikely.'" 

However, with everyone from small-business owners and individual Americans to central bankers and Wall Street economists worried about a recession, there also is a risk that we "talk" ourselves into a recession, according to former Pimco CEO and now Allianz chief economic advisor Mohamed El-Erian.

 And retailing is especially susceptible to that kind of self-fulfilling prophecy. It all comes back to the shopper!

Does that mean that retailers can smiley-face themselves to sales increases or a profitable year? Not likely!

But, it does remind us to keep perspective on what is really happening in our communities, avoid the hype of the news cycle, and focus on those things you can manage and control.
"Small business optimism takes a dive as revenue growth eases." Joyce M. Rosenberg, AP Business Writer, The Miami Herald, February 11, 2019.

** "53% of small business owners think a recession is coming." Eric Rosenbaum, CNBC, February 11, 2019.

Monthly Retail Sales Results

Is this a trend? Or a blip?

On February 14, the U.S. Commerce Department published the monthly sales results from December (delayed by a month due to the government shutdown.) The ROI gathers these results for all major retail sectors, calculates the change versus the same month the prior year, charts the most-recent six months, and posts these revealing trend charts on The ROI site.

Take a look at these overall numbers. While December sales for eight of the twelve sectors were up versus December 2017, sales growth seems to be slowing. That is eleven of the twelve sectors showed increases (or declines) in December that were below the November results.

Plus, this is happening as prices have been creeping upward from a year ago. 

We encourage all retailers to be tracking their own sales trends over time in the same way. Then, compare your own trends to that of your sector.
  • Are your stores trending in the same direction?
  • At the same pace? 
  • And most important. what adjustments are you making in your buying plans or expense management?
Monthly Retail Sales Results

Sharing is a good thing!

Let others know about The ROI
Forward The ROI NEWS to them.

(No obligation; it's just an FYI for them.
They have to opt-in to receive more.)
Share with a retailer

Dependent on retailers?

Your organization benefits when they become financially stronger. 

FAQs about the Benchmarks Trend Charts

The ROI's Retail Benchmarks Five-Year Trend Charts have been updated to include the 2018 data. These special trend charts are a snapshot view of the financial health and viability of each retail sector.

Whether you are a retailer, or you work with retailers, The Retail Owners Institute makes it easy for you to get a quick financial health assessment of any retail business. Go here to find your retail segment.

Here are the answers to some of the most Frequently Asked Questions about these unique charts.

Q. How do you choose the retail segments? 
A. The segments featured at The ROI reflect the definitions and designations of the North American Industrial Classification System – NAICS. (We don't make this stuff up!) The top of each Retail Segment Page on The ROI site includes the NAICS code and the NAICS definition for that industry segment.

Retailers may need to examine the benchmark numbers in more than one segment to get perspective on your own store's performance, particularly if your store does not exactly fit the NAICS category.

Q. Are those 6 ratios the only ones available?
A. Oh no, not at all. There are an abundance of ratios that accountants are more than happy to calculate. 

The ROI has identified 6 Key Retail Ratios for retailers to regularly monitor and manage: Pre-Tax Profit • Gross Margin • Inventory Turnover • Debt-to-Worth Ratio • Current Ratio • GMROI.
We focus on these because they represent "controllable variables" for retailers. Everything on The ROI site teaches to these 6 key ratios.

Q. Where do you get the numbers?
A. As is noted on each Benchmarks page, the source data is Risk Management Association's Annual Statement Studies. RMA collects financial statements from banks, and aggregates the findings for all industries, not just retailing.

RMA presents their data in 3 sections: the Top Quartile, the Middle Quartiles, the Bottom Quartile. Based on the Middle Quartiles results, The ROI calculates GMROI for each segment, and then prepares our Five Year Trend Charts for each of the 6 Key Ratios for each segment.

Q. How can these Benchmarks be used?
A. For perspective. Calculate these ratios for your own business, and then see how you compare to your retail industry segment. Then, use these benchmarks when you are setting your own target ratios for the next year.

And, for negotiating with lenders and vendors. When you are seeking a bank loan for your business, the bankers will look at these industry benchmarks as they assess your store's performance. Knowing how your store's performance compares enables you to make your best case. 

Q. Where can I quickly find out more about all this?
A. Go to The ROI's free Benchmarks Resource Center. 

Two Tell-All Metrics About Your Business

Free accessWebinar of the Week • Now thru Thursday February 21
It is essential for every retailer to know what numbers matter to the outside world of vendors and lenders. 

Spoiler alert: You won't find them on your P&L!

Whether sales are up, down or sideways, there are two questions that zero in on the true health of your business:
  • Will we be able to pay our bills on time?
  • Is our business getting financially stronger? Or weaker?
The TOPICAL TUESDAYS Webinar of the Week by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute, will show how you can answer those questions for yourself. It just takes paying attention to 2 key ratios. And about 12 seconds to calculate each one!

After all, your vendors and lenders are already doing this! (That's why they ask for your financial statements.)

Shouldn't you know what they know??
Free Access Now