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Patricia M. Johnson & Richard F. Outcalt Retail Strategists and Retail Turnaround Experts Co-Founders, The Retail Owners Institute® • Business Strata:G®
What is the definition of "value" for customers? Pretty straightforward, actually.
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. Like beauty, value in retail operations is in the eye of the beholder. And each beholder's eye is a personal decision.
For instance, you might list your merchandise selection.
But, is it better to have carefully edited selections, or extensive choices?
What about the qualitative factors of your merchandise, from where and how it is sourced, to labor practices of the manufacturers?
How long will it last? Do your customers want an enduring "classic", or do they prefer to replace items regularly?
See? That depends on your customers. And they can be fickle.
Or, how about the benefits of a "knowledgeable sales staff?"
In these days of online reviews, internet influencers, price comparisons, etc, is that even relevant to your shoppers? Again, depends on your customers.
Your staff's knowledge, and the personal connection that offers, may be more important today than ever before.
But, their knowledge may have to be raised a notch; your customers likely already know the basics.
For some customers, the hours your store is open – or not open – could be an issue. Late evenings? Early mornings? Weekends?
Yes, once again, "It depends." It depends not only your customers age, but their Lifestage: if they have young children, their time demands are different from empty nesters, or single 20-somethings.
Or, what about the speed of shopping for the customer (or lack of speed.)
How efficient are your processes?
What about your employees??
Of course, price can always viewed as a burden.
But remember, true price hounds, who always chase the lowest price, are only about 20% of all shoppers. The other 80% of shoppers are looking for other measures of value.
There are many ways for you to overcome price objections. It all has to do with better understanding the "value" the customer perceives.
But before you choose which ones to feature – gift wrapping, evening hours, special events, valet parking, prices, merchandise selection – you need to have done a thoughtful analysis of who your customers really are today.
True, the challenge of that may be greater now than in recent years. Changing demographics and psychographics. Changing tastes. New brands emerging. A volatile economy.
The burdens you might endure can be more than offset by the benefits you receive. In other words, there can be great value for you in this analysis.
WEBINAR Of The WEEK
You got a call for help from a fellow retailer. Costs are up. Sales are off. The future is uncertain. And a cash crisis is looming. Might you be able to give them a short term loan?
Or, maybe that retailer is you. And the question nagging at you is whether to loan money to your business?
This Webinar of the Week, led by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute®, will show you an approach to take in order to make a decision. It starts by imagining a request from a fellow retailer, Al Shaky.
Watch as we analyze A. Little Shaky Company’s performance in a matter of minutes by calculating some key ratios.
Then, once we compare Shaky’s current status to the Benchmarks for his retail vertical, the next action steps almost write themselves.
👀 This lively and in-depth webinar is essentially a (free!) master class in retail financial turnarounds.
See for yourself how empowering it is to understand the cause-effect levers of retailing. And how many more choices retailers have to help themselves.
On May 15, the Commerce Department released the monthly retail sales numbers for April. As you know, we chart those results for the trailing six months compared to the same months last year.
Most sectors are up for April. Is it due to higher prices? More transactions? More items purchased?
The Commerce Department cannot track that. But you can in your own operation. After all, the reason to track metrics is to make better decisions going forward.
Be sure that all the data you track is actually “news you can use.”
Retailers like you have already discovered what Member Access at The ROI can do for their stores. Here’s what a few members are saying:
“I joined The ROI this year and love it! There is no other place where retailers can get all this great info in one place. Thank you!” —Owner, Gift Shop & Gallery
“The ROI is a source of inspiration. It’s good to challenge our status quo. Complacency is the enemy in times like this.” —3rd Generation Retailer, Audio/Video
Whether it’s managing inventory, cash flow, or profits, Member Access is helping retailers reduce stress, increase control, and gain peace of mind.
Go here to see more about how it could work for you.
GMROI - Gross Margin Return on Inventory (Investment) - is the #1 inventory productivity tool in retailing. It measures how many gross margin dollars are generated for each dollar invested in inventory.
How best to use it? Three quick steps
Array departments, or vendors, or classifications of inventory by GMROI (Yes, you want to compare.)
Spot the laggards.
Give them the attention they need.
That's why the real pros in retailing are experts in GMROI. It’s actually a unique time-management tool for retailers. more info here
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Patricia M. Johnson & Richard F. Outcalt
Retail Strategists and Retail Turnaround Experts
Co-Founders, The Retail Owners Institute® • Business Strata:G®
"As tariffs threaten to raise prices, a potentially existential question is facing retailers: How much inventory is too much or too little in such an uncertain environment—and is it worth squirreling away a little extra if higher costs are on the horizon?" *
That’s the question posed by Alex Vuocolo in the May 21, 2025 Retail Brew.
That vexing issue of “how much inventory is too much?” is not new to retailers, of course. But the volatility of the tariffs being imposed by the current administration are a significant complication.
So are retailers responding by “squirreling away a little extra if higher costs are on the horizon?” Recent earnings reports by publicy-traded retailers and logistics companies "show that some are choosing to stock up just to be safe," Vuocolo reports.
Amazon CEO Andy Jassy noted that where Amazon is the first-party seller, they have done forward buys. "And third-party sellers have pulled forward a number of items so that they have inventory here as well," Jassy stated.
Macro-level data paints a similar picture. The U.S. trade deficit increased 14% in March, and imports of consumer goods increased ten-fold to $22.5 billion, up from just a $2.4 billion increase in February. Somebody is squirreling inventory away!
Reading the tea leaves of macro-economics can be useful, but when faced with "How much inventory is too much or too little?", independent retailers are better served by focusing on two things: their customers' and their cash flow.
Retailers are keenly aware of how shoppers already have been dealing with inflation and increased costs. A research report from the Bank of America Institute shows retailers are remaining cautious, keeping inventory levels relatively lean.
According to David Tinsley, senior economist at Bank of America Institute, "When economic uncertainty increases, sometimes doing nothing is the best option. You might see firms being a bit hesitant to invest or hire, and I think probably the same is true on inventories as well."
After all, it’s what we call The Goldilocks Question about inventory: Too much? Too little? Or just right? Good luck!!
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*"How much inventory is too much to prepare for tariffs?" Alex Vuocolo, Retail Brew, May 21, 2025.
Many retail owners have faced this situation at one time or another: a fellow retailer (perhaps in your community, or someone you know through a trade association or buying group) asks for your advice.
Or - gulp! - asks for a loan! How would you respond? How should you respond?!
Or, consider this: Would you loan $50,000 to your own business?
Should you?!
This Webinar of the Week, led by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute®, will show you an approach to take whenever you face those kinds of requests.
The good news: There IS a way you can help without ruining the friendship – or your bank account.
Watch as we analyze the Shaky Company performance in a matter of minutes by calculating some key ratios. Then, once we compare Shaky’s current status to the Benchmarks for his retail vertical, the next steps almost write themselves.
See for yourself how empowering it is to understand the cause-effect levers of retailing.
As a retailer, you know that financial success isn’t just about sales—it’s about managing your finances with precision and confidence.
That’s where The ROI comes in, as the only financial resource designed specifically for retail owners like you.
With Member Access, you’ll gain unlimited, round-the-clock access to our entire Library of Resource Centers. Available on-demand, 24/7, whenever you need it.
Each month, hundreds of retailers across sectors—from gift shops to apparel and hardware stores—use The ROI to gain greater control over their business outcomes.
Sign up today! Experience the difference that access to The ROI can make for your business.
“If you think that being small means you can’t make a difference, try going to bed with a mosquito!”
—Anita Roddick, Founder, The Body Shop
The Retail Owners Institute® has been empowering retailers since 1999 to "Turn on their financial headlights!" Our tools and resources are trusted by thousands of store owners to help grow profitable, resilient businesses.