From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
"Men are less price-sensitive and less health-conscious while shopping than women."
Indeed, reports one male shopper, "I buy more meat than I should and too little produce. I'll forget yogurt and granola. I'll definitely remember sausage and bacon."
However, we believe that the incidence of more males shopping is not limited to grocery stores. In fact, it's likely happening in all types of stores, including yours! And why would that be? The internet.
---- *"Supermarkets Lure In Male Shoppers." Anne Marie Chaker, Wall Street Journal, July 10, 2018.
"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."
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.
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?
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."
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.
What especially intrigued us, however, is this new feature Boxed has announced: group orders.
Customers can now do a group order online by sending links to others to collaborate on an order.
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!"