From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
"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."
"In terms of investing, his junk-food strategy is even more straightforward: People like to indulge."
Ahh, happy customers. How could your stores indulge your customers to make them happy?
When was the last time that you actually GAVE something to a customer? Didn't it surprise them? Didn't it thrill them?!? You bet it did!
Now, why not institutionalize giving thoughtful treats or extra perks to customers?
Buy some golf balls, and be given some tees.
Buy some shoes and be given a shoe horn.
Get your car fixed, and have it washed before you pick it up.
Buy your lunch and be given a few French fries on the side.
Buy a gift and be given a greeting card to fill in.
Are we encouraging retailers to give their way into bankruptcy? Absolutely not! But we are trying to get you to think, "Now, if it's good enough for Warren Buffett to believe in, it's probably good enough for my store to experiment with."
Or, what about your social media engagement with your customers? Is it giving them extra information? Or special "insider insights"? Or, first dibs on special events? Or...?
Does your website or Facebook page have a personality? One that is fun to be around?
Have some fun with this! What unexpected "something extra" would surprise and delight your customers?
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!!
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 disruptive has the "digital revolution" been for your business?
We just came across this fascinating white paper – "How to Win in a Digital World Where Technology Is Rewriting the Rules of Retail" – produced by SAP, the very large global self-described "market leader in enterprise application software."
We heartily concur with their initial assertion: "You can't fight your way through today's challenges by simply working harder." They then provide a compelling overview of the digital transformation that is well underway.
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.
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."
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?
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!"