From the Co-Founders of The Retail Owners Institute.Tips | Tactics | Insights on the Business of Retailing.
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.
When asked about expected changes this year, 36% of the owners mentioned "expand business' online presence", and 34% anticipate they will "expand into new product lines or categories."
No surprise, of course, that retailers are optimistic, and thinking about growth and expansion. For retailers, it's not whether to grow; it's how! And that leads to one of The ROI's Strategic Retailing concepts: the Four (Only!) Ways Retailers Grow, recapped in this chart:
There are just two major variables that affect a retailer's growth and expansion: Customers and Merchandise Mix
Each of these two variables is further divided between what you have Now (e.g., "Present Customer Profiles", Present Merchandise Mix), and what would be New or different types of customers or merchandise mix.
And that means that there are, fundamentally, only four ways that your business can grow. It all depends on which combination of these variables you choose to pursue. Now, consider the findings from the NRF survey.
Those retailers who expect to "expand their online presence" would be growing by "Market Development" (quadrant #3). Online shoppers are different from in-store shoppers, and/or are from different customer groups
Those retailers who expect to "expand into new product lines or categories" would be growing by "Concept or Merchandise Development" (quadrant #2.)
And in many instances, retailers who change and expand their merchandise mix actually end up in quadrant #4 – Diversification – because they are attracting different customers.
Why does it matter? Well, Growth = Change = Stress.
Even "good change" involves added stress. All of your resources – financial capital and, especially, human capital – will be impacted.
Knowing which way you intend to grow, or, when in the midst of a growth spurt, recognizing which variables are changing the most, gives you more opportunity to exercise leadership and apply controls.
You are better able to avoid surprises, and to manage the challenges associated with making changes. Go here on The ROI site for more details about this.
Meanwhile, keep that optimism!
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!!
You’ve heard about 3D printers, right? They are computer devices that use a blueprint (a “digital model”) of an object and produce (“print”) one or more copies of that object by painstakingly building up layer after layer of its form.
Essentially anything that is manufactured can be replicated, one by one, with a 3-D printer!
And, be ready. It is coming to a store near you very soon. Shouldn't it be your store?
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.
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."
This looks promising!
"Consumer confidence hits 18-year high" is a welcome headline to retailers. In The ROI's view, consumer confidence is one of the most reliable indicators of retail sales trends.
And just as the Conference Board was reporting that their consumer confidence index was at the highest level since September 2000, the National Retail Federation reported that consumers anticipate their Holiday spending to be 4.1% higher than last year. This corresponds with the NRF's economic forecast of Holiday spending increases of 4.3%-4.8% over 2017.
You've seen them, right? All the stories about how strong this year's Holiday sales are expected to be.
Meanwhile, the department stores – Kohl's, J.C.Penney, Macy's – keep reporting sales declines. And malls, seeing less foot traffic and fewer shoppers, are scrambling. So, where will those robust retail sales come from?
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!"