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• Repping Your Customers?

  

  REI, the $2.62 billion outdoor equipment retailer with over 150 stores, has announced rigorous new standards...for their suppliers!

  Those suppliers who can't or won't meet REI's standards? Their products will not even be considered for REI's store shelves, even if that will affect sales.
  REI's stated standards are an effort to "match its environmental impact to the values espoused by many of its customers." 
  
  Or, in other words, REI has chosen to be an agent for the customer, rather than appear as an agent for the suppliers.
  
  REI's chief executive Jerry Stritzke calls the standards "maybe one of the most transformative things" the 80-year-old co-op has done. "At some point you get to a tipping point where it's expected by consumers," he added.

• How's Your "Wow!" Effect?

  

  "No business has ever failed with happy customers."
  ---Warren Buffett, CEO, Berkshire-Hathaway

  Buffett's logic is very straightforward: people like to indulge themselves.
  
  For some observers, this helps to explain Buffett's investments in "junk food" – from Coke, to See's Candy, Dairy Queen, etc. 
  
  "The CEO of Berkshire-Hathaway invests in bad food and his diet reflects it: he drinks Coke at breakfast and ice cream is an occasional accompaniment," writes Kyle Stock of Bloomberg News.
  
  "When asked about his diet, Buffett has said he aims to eat like a 6-year-old because that's the age at which mortality is least likely."

• What Customers Really Want

  

  We are living in unsettling times of rapid change, magnified by news cycle drama. 

  Maybe it’s the latest natural disasters or the uncertainty of international conflicts. Or closer to home, aging parents, unexpected expenses, or just trying to open a new bottle of aspirin, life can seem more out of control than normal.

  This anxiety and frustration can be unsettling to many folks, some of whom undoubtedly are your customers.

  And frankly, as the frustrations grow of having less control, some people will seek more control wherever they can.

  Where would that be? That’s right. Your stores. You and your staff must be ready.
  

• Hmm. Your Stores in Red States or Blue States?

  

  A new consumer confidence study based on monthly interviews with 9,000 respondents (versus the 500 or so polled in the University of Michigan consumer sentiment study) finds that the the key difference/predictor in people's attitude about the economy (and shopping!) is their political views. 
  
  That's right. What seems to matter more today may not be whether you're in a mall or strip center. When it comes to location, apparently what really matters is, Red State or Blue State?

• Retailers: Unleash your imagination!

  

  As we often discuss, retailing is a very dynamic industry, constantly changing and evolving. To be successful, retailers must pass frequent flexibility tests. So we paid particular attention to this recent headline in the New York Times*: "The freshest ideas are in small grocery stores." 

• Want to grow your profits?

  

  Of course you do! Doesn't everybody?

  But as pressures grow to raise wages, increase benefits, renew leases, improve technology, and oh yes, pay taxes, many businesses find their profits diminishing.

  But retailers have a special advantage. An often under-utilized  pocket of profit growth potential. 
  
  Yes, we're talking about your inventory! 

  For each $100 of inventory @cost, as it sells, its markup (margin dollars) helps cover expenses and adds to profit.

  Even a modest increase in inventory turnover rates per year can yield a dramatic increase in margin dollars and net profits. (For the formula for turnover and more perspective, see the Retail Benchmarks section at The ROI.)

  Take a look at this chart.