Re-Inventing Retail

From the Co-Founders of The Retail Owners Institute.
Tips | Tactics | Insights on the Business of Retailing.

Ominous Impacts from "Tariffs Wars" Bookmark

Specify Alternate Text

The so-called "Tariff War" that's in the headlines these days seems to most of the public to be a yawner, a distant spitting contest. 

But to us, it seems much closer to home.

We're in the business of helping retailers and, when we can, providing a heads up when we see trends that may be impactful. The current trade disputes between the United States and most major countries in the world is one of those times. Retailers need a heads up.


Retailing in the Palm of Your Hand Bookmark

Specify Alternate Text

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."

That's right; transactions initiated and completed all via smartphone. At least once a month. One out of three "social media users" (or, 33% of almost everybody?!) 

It's what some are calling "handheld retailing." 


It's a trend you may not like, but heads up, folks. It's a tsunami!

Retailers: Who Else to Lead by Example? Bookmark

Specify Alternate Text
We all are deeply involved with the retail industry worldwide. As we're apt to remind you, there are opportunities, responsibilities, and yes, obligations that come along with that.

As we often explain, "Retail is a mirror of society." As such, we believe all retailers have an opportunity to lead by example. And most of us do a fine job. 

Recently, however, there have been some extraordinary examples of retailers taking an extra chance but certainly setting some fine examples.

Want to grow your profits? Bookmark

Specify Alternate Text

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.

A Retailer? Or a Merchant? Bookmark

Specify Alternate Text
Anybody can be a retailer, and almost everybody is at one time or another. 

Maybe you put on a garage sale. Or sell on eBay or Amazon or Etsy. Or at a farmer's market. Or your own stores. 

Wherever you are selling to the ultimate consumer, by definition, you are a retailer;

But, just as in education, or in sports, there exists a higher, ultimate level of professionalism. In retailing, this is to be a "Merchant".

Repping Your Customers? Bookmark

Specify Alternate Text

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.

Quick - Imagine an Online Shopper Bookmark

Specify Alternate Text

Quick: Imagine an online shopper. Did you imagine a man or a woman?

Full disclosure: We thought that online shopping would be dominated by tech-savvy males. Didn't you?

Well, we thought wrong!

Oh Those Returns Policies Bookmark

Specify Alternate Text
We read recently of a service that enables retailers to essentially outsource their decision-making regarding refunds and customer returns.  Yes, to an algorithm.

Used especially by large national chains, it applies technology to accept or reject attempted returns.

Have questions about your return being denied? The store employee directs you to contact the return authorization service. 

Well, that's one way to handle returns, isn't it? And it may be very appropriate for large national chains that are particularly susceptible to fraud or so-called "returnaholics."

But for local retailers, return policies are one of the most complex management issues in retailing.

Timeless - and "Towering" - Lessons Bookmark

Specify Alternate Text
At one time Tower Records was the "superstore hangout for music lovers," a $1-billion worldwide chain of 200 stores in fifteen countries, and the nation's largest privately-held music retailer. We're reminded of Tower Records as its founder, Russ Solomon, passed away in March at age 92.

Reading about Solomon, we were struck by the relevance for today's specialty retailers of many of his basic concepts.

About The Co-Founders

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!"