From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
Sales ticking up? Here's why – and how to pick up the pace even more
Have you noticed? We may be making progress in this economic turnaround. Many retailers now are being buoyed by upticks in sales.
Aside from being relieved, have you given any thought to "Why?" your business is experiencing sales increases?
We can tell you in advance: it will be driven by one of these three basic reasons:
The ROI suggests that, when you analyze your results, you will quickly eliminate reasons #1 and #2. Consider:
1. "More customers?"
That's a stretch.
We know of few places experiencing growth in population.
Plus, with the proliferation of online shopping, while your customers don't need to be geographically close, they also have many more choices when they are ready to buy.
In short, your competition is growing faster than the market of customers.
2. "Higher prices?"
Just not in the cards these days. This is not an environment where margins are increasing.
Inflation currently is not a major factor.
Plus, not only are retailers expanding online, so are many vendors, so price pressures continue to be downward.
So, what IS driving these sales increases? Here's what we believe. But check out your own numbers; we think you'll agree.
#3. More Items-per-Transaction (IPTs)
Shoppers are feeling more confident
And they have a decided case of "frugal fatigue." Enough already, they're saying. There are things we have not bought for a very long time.
Wherever they are shopping, customers are giving themselves permission to buy more, or to replace ("Finally!") those things they've had for several seasons.
Here is the really good news for retailers:
Items-per-transaction are a "controllable variable!"
Those are shopper behaviors that you can focus on, and increase even more!
Your sales staff can focus on add-on sales, to increase the items-per-transaction.
Your buyers can bring in more "impulse items" and more complementary products that lend themselves to add-on sales.
Of course, be grateful for sales increases. Who wouldn't be? But by recognizing "WHY?" sales are increasing, you can make them even better. A little homework by you right now may pay great dividends during the year.
"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?
Considering a multi-store launch?
Opening additional locations?
Testing a new retail concept?
Launching a robust e-commerce site?
Any one of these approaches to growth requires that you develop your plans, explore real estate or web hosting opportunities, evaluate systems, identify mid-management talent, line up financing, and so on.
But wait! Before you get too far down the road on any of these areas, you first must decide: What is your fundamental growth strategy? That is, HOW do you want to grow?
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!!
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?
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.
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.
We know that Walmart is the biggest chain of stores in the United States. Apart from this, Walmart conducts its customer satisfaction survey. https://discountsurvey.xyz/walmart-customer-survey/
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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!"