From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
Top 5 Killers of Retail Business
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.
Well then, what ARE the major causes of retail failures? (Spoiler alert: declining sales did not make the list.) You may be surprised.
But you also can be better prepared to protect your business from adversity.
Just go toThe ROI’s Library for Owners to see a recap of the Top Five "Killers" of Retail Businesses.
Keep this in mind: over one-third of the retail businesses that fail are actually profitable(!)
They simply run out of cash when their creditors have run out of patience.
And finally, this dismal statistic: last year in the U.S. alone, on average, one retailer failed every eleven-and-a-half minutes, 24/7, 365 days. To be sure, all of those failures are traceable to one or more of the five “killers” we’ve covered here.
Do not let it happen to you!
The NRF – previously known as the National Retail Federation – describes itself as "the world's largest retail trade association."
And indeed, it has expanded well beyond a "national" focus. Its far-reaching international focus matches that of its large enterprise members.
You've seen all those comments, right? All the dire news about the demise of retailing?
It was 20 years ago this week that Amazon went public. Twenty years. And now they are valued at twice the value of Walmart.
As an independent retailer, this is certainly not news to you. The domination of retail first by Walmart and then Amazon is all-too-well known.
Look, we are not fond of what Amazon has done to independent retailers. But, we were struck by a comment by Jeff Bezos in a 2013 interview with Charlie Rose which we had missed earlier.
We have a mental image of a wide-open plain with hundreds of prairie dogs, cautiously poking their heads above ground. Looking around, they slowly realize they can actually venture out into the world once again. And venture forth they do. One by one at first, then more and more. Enthusiastically. Energetically. Excitedly bounding about, encouraging others to share their sense of adventure and fun. And that’s what we imagine is next for independent retailers. Here’s why.
The ROI NEWS asked retailers this question about the effectiveness of Social Media: “Does it raise sales?!”
We invited retailers to take a short, quick, 6-question survey about their use of promotional tools in general, and, in particular, “Social Media”: Facebook, Twitter, Pinterest, Instagram, LinkedIn, Other.
We asked, and you answered!
You quickly confirmed that “social media” is in fact a hot topic among retailers!
And, you are willing to share your experience with it with others, and for that we say, Thank You!!
The National Retail Federation sponsored a survey in early May of retail small business owners across the country (those that meet the SBA definitions for employee size and revenue.) Contrary to the doom-and-gloom of the "Retail Armageddon" stories, this survey confirmed that retail owners are optimistic and looking to expand.
Few believe their business will be in worse shape in 12 months;
Nearly half expect revenues to increase;
Many have goals for expansion or implementation of new technologies.
Here's a revealing factoid from Bloomberg News: "Of the people who use social media, one in three makes a purchase every month through a platform such as Instagram, Facebook, Pinterest or Snapchat."
It's a trend you may not like, but heads up, folks. It's a tsunami!
Pat Johnson and Dick Outcalt, The Co-Founders of The Retail Owners Institute®, have been called "The Zen masters of retail finance!" Since 1999, they have been assembling their proprietary content into a unique self-help website. The Retail Owners Institute is an unmatched resource that assists retailers worldwide with basic financial training, assistance and easy-to-use tools. Their engaging and empowering how-to resources about the financial levers in retailing are informative, fun(!), and retailer-friendly. Their promise: "Everyone will 'get it'!" Pat and Dick are recognized experts in strategic retailing. Working only as a team – Outcalt & Johnson: Retail Strategists, LLC – they have been consulting, publishing, and speaking professionally throughout North America since 1990. They focus exclusively on retail, or wherever retail is involved. They work with CEOs, CFOs, boards and owners of retail operations, as well as manufacturers or wholesalers expanding into retail. And they also are Retail Turnaround Experts.
Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"