Tips| Tactics | Insights from The Retail Owners Institute® • www.RetailOwner.com
Friday, March 24, 2017

From The Co-Founders

NPR - "Never Pay Retail" - Is Everywhere

A new consumer study by First Insight confirmed: “Today’s consumers expect discounts every time they shop.”  The documentation of this phenomenon – what we often refer to as “NPR: Never Pay Retail” – is  sobering. Maybe not surprising to you, but nevertheless, quite sobering.

First Insight reported: "Percentage of consumers who expect discounts when shopping in these categories:"
  • Electronics - 90%
  • Appliances - 88%
  • Furniture - 85%
  • Smartphones - 83%
  • Vehicles - 80%
(Note: These are the only categories reported on so far.)

And this:
  • Baby Boomers are the most resistant to paying full price. Three out of four Baby Boomers would “definitely not” or “probably not” buy at full price.
  • Among Millennials, however, purchase decisions seem to be driven by factors other than price. Only 35-40% would choose not to purchase at full price. 
However, a strong caution. In the battle to deliver "what the customers want", there is one more thing: 
 
Discounts offered have to be real!
Yes, even if your name is Amazon!

A just-released study by the non-profit Consumer Watchdog reports that Amazon is posting “misleading list prices” on their site that significantly overstate the “discounts” Amazon shoppers receive.

From Consumer Watchdog's recap of their major findings (supporting the lawsuit they filed in California):
  • Amazon continues to include reference prices on more than a quarter of its stock”
  • “About 40 percent of Amazon’s reference prices are greater than the highest price charged by any known competitor.”
  • "On average, Amazon’s reference prices overstate the median market prices by $22, or about 20%.
  • "Amazon Marketplace vendors also post reference prices in excess of the prevailing market price, but they do so less frequently and to a lesser degree than Amazon itself.”
Ugh! What’s a retailer to do? Is “pricing credibility” even possible? Especially when virtually every consumer expects a discount? Or, relies on Amazon for pricing information?

Our conclusion, whether you agree with us or not: Independent retailers are well-positioned to seize this opportunity with credibility. Since the rise of Wal-Mart, then category killers, then Amazon, your competitive edge - your “value proposition” - has not been ”lowest price.” 
  • Instead, you offer better selection, more specialized merchandise, more knowledgeable sales staff, more personal customer service, or other benefits that do matter to your best customers.
That's what has enabled you to survive. But to continue, you  need to be even better. So, sharpen that "competitive edge" all the more! 
  • If Baby Boomers predominate in your stores, an “every day low price” strategy is unlikely to be compelling.
  • To retain Baby Boomer customers, your  competitive edge must be attuned to offering "discounts". Just make sure that they work for you, too: a loyalty program perhaps (which also provides more customer data), or “special shopper” events, etc.
  • Focused on Millennials? Clarifying a total “value proposition” that matters to them is imperative. 

Price always matters. But credibility and fairness can still be your competitive edge!

links to these studies:
 First Insight, discount expectations
Consumer Watchdog, Amazon's "misleading" discounts

from the

Library for Owners

Merchandise Planning: Back to the Basics

Sound merchandise management is crucial for the survival and prosperity of your retail business. 
  • For example, if you’re currently keeping about $150,000 tied up in inventory, and you discover that a carefully-monitored merchandise management (or “Open-to-Buy”) plan can cut that by 10 percent, you’ve just freed up $15,000 in cash for more prudent investment! (Remember, the same math applies if your inventory is $1.5 million, or $15 million, or more!)
Chances are you have slack of at least 10% in your inventory right now!

Though making a plan takes time and effort, it pays off when you begin seeing your merchandise inflow closely matching your sales patterns.
  • A good merchandise plan improves your inventory turnover, cuts your inventory carrying costs, and helps you keep your inventory fresh—thereby cutting markdowns and closeouts. 
In short, it will help you make more money!

Ready to bring that inventory into line? Go here in The ROI's Library for Owners: for Merchandise Planning: Back to the Basics
 

Monthly Sales Trends

Monthly Retail Sales Trend Charts
The ROI obtained the most recent results of Monthly Retail Sales by retail sector. These have now been posted on the site in chart form, showing the trends for the trailing six months of monthly sales versus the same month last year.
  • For February 2017, 8 of the 12 sectors had sales increases compared to February last year. 
  • However, of those showing increases, ALL sectors reported lesser increases than in January this year vs January 2016.
Hmm. Were February 2016 numbers especially strong? Or January 2016 especially soft?

Or, are consumers starting to show some wariness?

Meanwhile, of course, how do YOUR sales trends compare? Find out here on The ROI site.

Available Now: Webinar of the WEEK

 

Managing your #1 responsibility:
Do you have what it takes?

Friday March 24 – Thursday March 31

ALL DAY, ALL WEEK ACCESS • FREE

The #1 responsibility of the Owner of a retail business? 
The survival of the business. 
That challenge must be faced, day in and day out.

And what's most important to survival? What is the key, essential ingredient?  
C-A-$-H! 
Day in and day out, you must have cash to survive.
 
Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute, understand this. And in this week's TOPICAL TUESDAYS Webinar of the Week, they share specific, real world (and street smart!) ideas you can apply immediately in your business to find and conserve cash.

Bonus: Free Online Retail Cash Flow Forecaster
Plus, they will demonstrate The ROI's free SPEEDY Headlights Retail Forecaster.

See how you can find out for yourselfin advance! – answers to those relentless "Owner questions".

This is very empowering for owners. Don't miss it.
 

Retail Business Insights

Able to See Ahead?
You wouldn't drive at night with your headlights out.

But that may be the way you're driving your store.

"Turn on your financial headlights!!"
Go here. See what The ROI is tweeting about.

What is The Retail Owners Institute?
Empowering!


The ROI, as it is known, is now the foremost self-help financial management resource for retailers and store owners.

Thousands of retailers come to The ROI each month to take advantage of The ROI's practical how-to info and unique, easy-to-use tools.

Use The ROI for your own stores. Make better business decisions, faster.

See in advance, for yourself, on your own: "What  would happen if I...?" 
Since 1999, enabling retailers worldwide to
"Turn on Your Financial Headlights!"

 
Share The ROI NEWS
 
Forward
Share
Share
Tweet
Organizations:
Helping your retailers/dealers has never been more affordable.

click here for details
Retail Growth Rater
Free SPEEDY Cash Flow Forecaster
Online Course
And much more!
more info

Tips| Tactics | Insights from The Retail Owners Institute® • www.RetailOwner.com
Friday, March 17, 2017

From The Co-Founders

"Are retailers eating themselves alive?" 

That was the provocative headline we recently saw. Then this followed: “Retailers' rising e-commerce sales are taking a big bite out of their brick-and-mortar revenues – a wide-ranging problem.” Other pundits we've seen call it “an untenable dynamic for these retailers.”

“Huh?”, we scoffed, as we read this about major retailers.
  • The definition of retailing is “selling to the ultimate consumer.” Why does it really matter whether they buy from you in-store or online?
  • Moreover, our rant continued, retailing also is having the right product at the right price at the right place at the right time for the right customer.
If that "right customer" wants to buy online instead of in-store, kudos to the retailers who figure that out!

But then we paused. Maybe there IS something to be considered here. We encourage you to take it even further. It all comes back to the focus on that “right customer.” 

Here’s a simple, free project to try: Sort your customers into "buckets", based on their shopping behaviors. And here’s how.

First, choose a short period of time, like one month, to try it out. Just gather your sales for the past month.
  • First, two categories of HOW THEY SHOP with you: In-Store or Online
  • Then, WHAT THEY BUY from you, both the merchandise and the price.
The ROI's customer data analysis table
Tally it up. (Remember to look at median values for transactions – half higher, half lower – not just average transaction.)

Now, look for the patterns. And the surprises (yes, there WILL be surprises!)
  • For instance, it may confirm the purposefulness of your shoppers. They have a clear idea of what to buy from you online, and what they prefer to buy in-store.
Or, maybe it will illustrate how you have two very different kinds of shoppers. 
  • Do they demand/deserve different merchandise mixes? 
  • What will it take to grow sales from each group? 
  • Should one group have priority over the other?
  • Will you need other vendors?
  • Different marketing programs?
  • Or…?  Or…?
Fun, huh? We think this exercise will stimulate your merchant thinking. And that of your key staff people as well.

So, should you be concerned about “cannibalizing” your business by offering products online? We doubt it, but you should find out for yourself.

Just serve it up as some great food for thought! And then feast on it!
 

from the

Library for Owners

Top Five Reasons Retailers Fail


People who get their understanding about retailing from the popular press or from political rhetoric often believe that declining sales - “Comp store sales are down” - is the death knell of retailing. 

While that is a popular view, it is not accurate.

What ARE the major causes of retail failures? (Spoiler alert: declining sales did not make the list.)

No need to guess. Just go here in The ROI’s Library for Owners to see a recap of the Top Five "Killers" of Retail Businesses. 

You may be surprised. But you also can be better prepared to protect your business from adversity. 

Monthly Sales Trends

The ROI just obtained the most recent results of Monthly Retail Sales by retail sector. These have now been posted on the site in chart form, showing the trends for the trailing six months of monthly sales versus the same month last year.
  • For February, 8 of the 12 sectors had sales increases compared to February 2016. 
  • However, of those showing increases, ALL sectors reported lesser increases than in January this year vs January 2016.
Were February 2016 numbers especially strong? Or, are consumers starting to show some wariness?

Meanwhile, of course, how do YOUR sales trends compare? Find out here on The ROI site.

Available Now: Webinar of the WEEK

 

Those Ever-So-Revealing Financial Statements

Friday March 17 – Thursday March 23

ALL DAY, ALL WEEK ACCESS • FREE

On occasion, you must share your financial statement, including your Balance Sheet, with "outsiders" - vendors, landlords, lenders, etc.

But here's the deal. Those financial statements are very revealing.
 
That's why some owners feel like their business has its own social media accounts. And is sharing waaaay too much!!

Here is what those outsiders quickly learn about your business:
  • Will you be able to pay your bills on time?
  • Is your business getting financially stronger? Or weaker?
That’s right. Anybody with access to your financial statements can know that out about your business.

Don't you think you should know that too? Before anyone else does?!

This TOPICAL TUESDAYS Webinar of the Week, led by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute, shows how you CAN know that for yourself.

Then, once you understand how to do these calculations "with a pencil", see how The ROI's Benchmarks Resource Center can help you do all this, for yourself, automagically, for FREE!

After all, your vendors and lenders already are doing this. Shouldn't you know what they know?!
 

Retail Business Insights

The Real Signs to Monitor
Every retailer keeps track of sales - daily, weekly and monthly.

But the pros also keep track of transactions just as carefully.
 
That way, when sales go up or down, the pros know why.
  • Change in the number of transactions?
  • Or change in the size of each transaction?
Aha! Now it is clear what problem really needs to be solved. Choosing the best tactics to solve it becomes more obvious.
Go here. See what The ROI is tweeting about.

What is The Retail Owners Institute?
Empowering!


The ROI, as it is known, is now the foremost self-help financial management resource for retailers and store owners.

Thousands of retailers come to The ROI each month to take advantage of The ROI's practical how-to info and unique, easy-to-use tools.

Use The ROI for your own stores. Make better business decisions, faster.

See in advance, for yourself, on your own: "What  would happen if I...?" 
Since 1999, enabling retailers worldwide to
"Turn on Your Financial Headlights!"

 
Share The ROI NEWS
 
Forward
Share
Share
Tweet
Organizations:
Helping your retailers/dealers has never been more affordable.

click here for details
Retail Growth Rater
Free SPEEDY Cash Flow Forecaster
Online Course
And much more!
more info