Seizing the growth opportunity | How's your "competitive edge?" | Looking to grow? You've got four choices 
Monday, June 14, 2021
 

From The Co-Founders

Patricia M. Johnson & Richard F. Outcalt
Outcalt & Johnson: Retail Strategists, LLC  •  Retail Turnaround Experts

Say "Yes!" to Growth? Maybe.
 
As we emerge from the pandemics, many retailers are eager to grow. (How's that for an understatement?!)
  • For some, that simply means having a better year than 2019 (because 2020 was such a disaster), and they relish having survived.
  • Others are looking to expand by adding locations, whether by acquisition of existing stores, or taking advantage of vacated retail sites. 
  • Still others are focused on expanding their newly-established e-commerce capabilities. 
  • And, for some, still other imaginative ways.
Trade shows are opening up with great success and eager buyers. Landlords are eager to fill vacancies, and in many instances, to cut deals. Vendors are eager to quit thinking about supply chain problems and start selling their merchandise, especially at trade shows. Plus, the continued growth and expansion of online wholesale marketplaces makes far more product available to retailers. 

Then there is the access to capital. Lots of money is floating around out there

All in all, it creates an environment of exuberance. "Seize the opportunity" is the rallying cry. Indeed, for some retailers, FOMO – that Fear Of Missing Out – is pushing them to make some major decisions. 

Here is a three step process for retailers to get some Big Picture perspective on this. 


Step #1: Be honest with yourself when answering these three questions:

  • Do we have the CAPACITY to grow? (Financial strength (check your debt-to-worth ratio and current ratio); people; systems; vendors; locations; customers; etc.)
  • Do we have the APPETITE to grow? (And a strong mid-management team?)
  • And now the key question: Especially after 2020, do we have the STOMACH to grow??
That final question, of course, has to do with your tolerance for risk. No matter how much money someone will lend you (and there are many folks eager to extend credit right now) how much debt are you comfortable taking on? How much of your personal capital are you willing to put into the business?
  • Re-check your debt-to-worth ratio, both where it is now and, importantly, where it would be.
  • What about other risks, whether finding people, locations, customers, whatever? 
After all that, do you have a resounding "Yes!" to those three questions? Okay, on to the next strategic decision.


Step #2: What do you choose as your growth strategy? 

You see, for retailers, there are Four (Only!) Ways to Grow, based on the two fundamental variables for managing growth. One is your Merchandise; the other is your Customers. 

Here is a chart that shows how those intersect (and a more detailed discussion here on The ROI site.)
Dynamics of Retail Growth
No matter which growth strategy you choose to pursue, there are implications on all of your resources, especially human and financial capital. 

All this need not be a time consuming process. We know that retailers can think fast! Just make a conscious choice of which one of the basic four ways to grow you intend to pursue. 


Step #3: Revisit the three questions in Step #1

  • What will it take to have the CAPACITY to pursue that growth strategy? Anything beyond what you already have in place?
  • Given that, do you still have the APPETITE?
  • And the STOMACH? 
For those who are definitely in that resounding "Yes!!" camp, more power to you!

You can proceed with more confidence; you have a clear strategic choice in hand. You now have a basis for all the forthcoming hard decisions. And tools for explaining your decisions to staff and family. 
 
Want more of the strategic retailing observations from Outcalt and Johnson?  Prior commentary From The Co-Founders  is available under Perspectives on The ROI site.   
 

"So, anything special about your stores??"

How to Sharpen Your Competitive Edge
Quick quiz for you:
Are your salespeople more helpful than a Google search??

Not sure? That could mean you are missing out on exploiting your best competitive edge as a specialty retailer. 
  • You see, thanks to big box and online retailers, the concept of "customer service" increasingly means "customer SELF-service."
  • And therein lies the opportunity for specialty retailers.
All stores can – and should – be "special", no matter the size, price points, or merchandise. Join us for this lively webinar, and find out how.
  • What is "specialty retailing?" What makes it "special?"
  • Technology's impact on retail and "customer service"
  • How retailers can create a training program to  sharpen and maintain their competitive edge.
  • How to know when it's working!
This fast-paced and inspiring session, presented by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute, is full of consulting insights and tips.

And yes, even some lofty ways of looking at all this.

Be sure to take advantage of this free access for readers of The ROI NEWS.
Free Access • Webinar of the Week
 
Four (Only!) Ways for Retailers to Grow

The Four (Only!) Ways That Retailers Grow


To help retailers take better advantage of the growth opportunities available to them, The ROI has developed a very useful way for you to sort out the "Why's" and "How's" of your growth plans.  

Go here on The ROI site to see the Dynamics of Retail Growth. Which of the Four Ways to Grow are you choosing to pursue? 
 
GROWTH Strategies
 
 
 
 
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That "Amazon question." Again! | Connect the dots like a pro! | Retail Benchmarks Resource Center - free | So, anything "special" about your stores?
Monday, June 7, 2021
 

From The Co-Founders

Patricia M. Johnson & Richard F. Outcalt
Outcalt & Johnson: Retail Strategists, LLC  •  Retail Turnaround Experts

Compete with Amazon? You don't!
 
As Amazon Prime Day approaches – it is June 21 and 22 this year, the earliest ever for this 48-hour promotional event – retailers from all segments are wondering (or being asked): "So, how do you compete with Amazon?"

Our response? You don't, at least not directly. 

Independent retailers do have many strategic advantages over Amazon. But you must recognize them, and enhance them at every opportunity. Here are some ideas that you may want to consider. 

Take advantage of Market Segmentation 
No more attempts to be all things to all people. Instead, focus on the portion of your market – and the customers – that are most profitable for your operation. 

Remember that life stages (presence and ages of children in the household) drive buying decisions. Shoppers from which lifestage are most profitable for your stores?

Trade Up
Amazon can certainly undercut any and all competitors on price. And being asked by would-be customers to "match Amazon's price" is not going to end well. 

But, you do have the opportunity to trade up. Sell on quality; and serve those customers who value quality. Give yourself permission to say goodbye to the price hounds who only want the lowest price. 

Expand into New Categories
Now that you have a focus on your key customer segment, what else might those folks want to buy from you? Consider adding appropriate complementary products.   
 
Pursue Private Label Opportunities
Coordinate with other retailers in your segment – whether through a buying group, a trade association, or another group – to develop private label merchandise. This offers all those participating retailers a unique sales and margin opportunity. And once this product line is in place in your stores, you may find that it prompts a bit more respect from your other vendors. 

Have Your Website Tell Your Story
Your goal is to get people into your store, right? Then, use your website/web presence to make that easy for them.
  • Showcase your people.
  • Showcase your merchandise, the stories behind it and why you have selected it.
  • Give your customers a way to do their online research before they come in, to know what's special about your stores, and why they should experience it for themselves. 
We think it is essential that your website and other online presences "do justice" to your store, the richness of the experience of shopping with you.

Have your website reflect that warmth, the customer focus, the "let's find a solution" attitude of your stores. That is a major design challenge, but one that likely would be welcomed by thoughtful web designers.
 
  • And remember this: as Amazon continues to roll out brick-n-mortar stores, their approach is to have those stores actually replicate the online experience. A "frictionless experience" (e.g., free of human interaction.)
  • Just as on the web, all the burden in Amazon's offline stores is on the customer. 
In other words, Amazon is trying to compete with independent retailers. They may never win at that. 

In retailing, one must win both the minds and the hearts of the shoppers. In that race, independent retailers can have a decided head start on Amazon. 
 

How to "connect the dots" like a pro


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. For free!

Ready to be a strategist? Go here on The ROI to see how that's done. Just remember:
  • There really are no right or wrong ratios. 
  • Examining the trends over time can provide early warnings of potential trouble spots.
  • Connecting the dots of the cause-effect connections can be very revealing. 
"Connect the dots"
 

Want to know more about how to read these ratios, or what they really mean? 


Take advantage of the The ROI's exclusive Retail Benchmarks Resource Center. Available nowhere else, and free to everyone to use.
  • Check out "Go figure! Calculate Your Key Ratios in Just 12 Seconds Each!" It's a practical explanation of each of the Key Ratios and how to calculate them. 
  • Download the "cheat sheet" summary of the formula for each ratio, where on your financial statement to find those numbers, and what each one tells you.
  • Or, use the free online Key Ratios Calculator to see your own ratios even faster. 
Benchmarks Resource Center
 

"So, anything special about your stores??"
Quick quiz for you:
Are your salespeople more helpful than a Google search??

Not sure? That could mean you are missing out on exploiting your best competitive edge as a specialty retailer. 

You see, thanks to big box and online retailers, the concept of "customer service" increasingly means "customer SELF-service." And therein lies the opportunity for specialty retailers.

All stores can – and should – be "special", no matter the size, price points, or merchandise. Join us for this lively webinar, and find out how.
  • What is "specialty retailing?" What makes it "special?"
  • Technology's impact on retail and "customer service"
  • How retailers can create a training program to  sharpen and maintain their competitive edge.
  • How to know when it's working!
This fast-paced and inspiring session, presented by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute, is full of consulting insights and tips.

And yes, even some lofty ways of looking at all this.

Be sure to take advantage of this free access for readers of The ROI NEWS.
Free Access • Webinar of the Week
 
 
 
 
Sharing is good!
Let others who care about retailing (or retailers!) know about The ROI. 
Tweet Tweet
Forward Forward
 
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