Re-Inventing Retail

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

Cannibalizing Sales? Really? Bookmark

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"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?

Moreover, our rant continued, retailing also is having the right product at the right price at the right place at the right time for the right customer.

If that "right customer" wants to buy online instead of in-store, kudos to the retailers who figure that out!

But then we paused. Maybe there IS something to be considered here. Something about the focus on that “right customer.” 

Easy – and Free – In-House Study

So, here’s a simple, free project to try. Choose a short period of time, like one month, to try it out. Just gather your sales data for that past month.

A. Make a simple tally sheet of two columns. One column is for In-Store sales, the other is for Online salesThen, for each sale over the past month, enter these bits of info into the appropriate column on your tally sheet:

Total dollar amount of the sale

What they bought (by major merchandise category)

B. Next, add it up

Get a total dollar amount for each column. 

And, maybe a total dollar amount for each merchandise category in each column.

C. Look for the patterns

And the surprises (yes, there WILL be surprises!)

D. Then, consider what that might mean for your stores. (This is a great time to involve your key staff people as well.)

For instance, it may confirm the purposefulness of your shoppers. Do they seem to have a clear idea of what to buy from you online, and what they prefer to buy in-store?

Or, maybe it will illustrate how you have two very different kinds of shoppers. One group likes to shop in-store; another likes to shop online. 

Hmm. Would that make any difference in your operation? Should it? 

For instance,

Does each group demand/deserve different merchandise mixes?

What will it take to grow sales from each group?

Should one group have priority over the other?

Will you need other vendors?

Different marketing programs?

Or…?  Or…?

Or, maybe it's telling you about your merchandise mix. 

Some merchandise might be better suited to online shopping. 

And, how might the merchandise your customers seem to prefer to buy in-store be presented more effectively?

Fun, isn't it? 

We think this exercise will stimulate the merchant thinking for you and your people.

Is "Cannibalizing" a Concern?

Should you be concerned about “cannibalizing” your business by offering products online? We doubt it, but you should find out for yourself! Here's how.

  1. Quickly gather the data. (It's free, remember?)
  2. Serve it up as some great food for thought.
  3. And then, ahem, feast on it!

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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!"