Can You Afford Your Frequent Buyer Program?

This Article was written by Ritchie Sayner, and is published in the July/Aug 2017 issue of Shoe Retailing Today. Click here to read the full article.

EXCERPT: “I believe that some retailers have begun offering frequent buyer programs simply due to the fact that many Point-of-
Sale (POS) systems can now track the “points” automatically thus eliminating the need for punch cards or bar-coded plastic tags that wind up cluttering most key chains..”

“One Minute Merchandise Manager”

We thought you might enjoy a brief audio clip that we call a “One Minute Merchandise Manager”.  You can listen to this by clicking here.

RMSA is a provider of merchandise forecast, planning, and analysis solutions. For over 60 years our solutions have helped retailers successfully manage their biggest and most critical investment Inventory, and we have solutions for all sizes of retailers.

Sharing the Pie with Online Retailers

This Article was written by Ritchie Sayner, and is published in the May/June 2017 issue of Shoe Retailing Today. Click here to read the full article.

EXCERPT: “Though online purchases account for a growing percentage of retail sales, “about 80% of consumers still want to browse and shop in-store,” according to The Wall Street Journal (WSJ) in a piece datelined December 30, 2016.”

What does it mean to look outside your “Comfort Zone”?

I’ve come to believe that we are truly creatures of habit. Have you ever noticed if you attend regular meetings people will sit in the same chair even though there are no assigned seats. We generally take the same route to and from work daily. Most family meals consist of ten meals rotated over and over again. We buy the same gas, frequent the same stores, read the same papers, and listen to the same music over and over again.

I think this is true of most of us and that’s okay. In fact, our “routines” allow us to feel safe because we don’t need to venture far from our comfort zones. However, what works in our daily lives will often fail if we practice the same habits in retail. Retail demands experimentation, investigation, and reaching out to embrace the opportunities that exist outside our comfort zones.

The best advice for new ideas that we can come up with is simple. Be on the look-out for “Furbies.” Unless you were out of the country you know that Furbies were the wonder toy of 1990’s. Kids either loved or hated the little battery operated fuzzy gremlin look-a-like.   But even with this love/hate relationship the Furby was still the hit of the season.

Retail is not altogether different than the stock market. You are taking a risk every time you write an order.  Since you’re taking a risk, why not go after the next “Furby” of the season.  Think of that sought after item as an undervalued stock that has the potential to become the next, Furby.  Break out of your comfort zone.

Take a look at your company and ask does it look pretty much the same now as it did the same time last year? Are you presenting the same vendors from two or three years ago?  Are your sales tactics the same?  Are your windows reflecting changes? Are yours sales associates introducing your inventory in pretty much the same way?  Sameness in retail can be a very dangerous symptom. How many new lines are being introduced this season?  How many do you intend to present next season?  How many new shows have you attended? Do you intend to attend any next season?

Years ago a fine men’s shop client, introduced some of the finest tablecloths and napkins available anywhere in America, you may ask Tablecloths…in a men’s store?  Surely it didn’t fit the mold, but every piece sold, exclusive women’s stores presenting some great home furnishings or Golf shops selling cigars. It makes sense now, but who would have imagined it ten years ago?  I can picture fine apparel shops introducing fine wines, and specialty foods, because of the symbiotic relationship between the culinary arts and fashion apparel. Several successful apparel retailers are in the restaurant business as well.  I guess good taste bridges across several lines.

The fact is, the use of innovative tactics isn’t against the law of nature, nor should it be against the law of retail.  On the contrary, it should be against the law of retail not to try new and unusual tactics in your quest to grow your business.

Try stretching yourself to see beyond the same vendors with products that you invariably display in the same old ways.  I’m not suggesting you abandon what you stand for in the eyes of customer, but do try to incorporate new approaches that allow your clients to see your shop in a fresh new way.

The most pleasant surprise you can give your customers is the unexpected, the “Furby” you discovered, and the new item you looked high and low for. I would venture to say locating this item might be the most pleasurable aspect of buying and retail. Retailers are having a very difficult time looking different; they are struggling to find ways to differentiate themselves. It does take work but it’s worth the effort. One or two unusual items, inventory that says it has never been here before, can make all the difference in the world.  Well, maybe not the world, but it can make a difference in a season.

The statement: : “Timing is everything,” has never been so true as it is in retail.

The fall and holiday seasons are behind you. Many of you will be heading to various markets in the next several weeks to select what you believe to be the best merchandise for your company. Although selecting the right merchandise is very important, establishing ideal completion dates for the orders you write can be just as important.

Before making that journey to the markets, you need to know which vendors were profitable, along with what colors and sizes sold best during the season. No doubt, you know which lines were not profitable and which items didn’t sell. At first blush, the mistakes may seem apparent, but was the lackluster performance for these items really a result of the merchandise lacking appeal, or was it something else? In many cases I’d wager that it was the something else . . . and there’s a good chance that the something else, was timing of deliveries.

It may sound a bit crazy, but building your orders and planning delivery dates now, will be time well spent. It’s often believed that establishing ideal completion dates can be a long arduous process. But it doesn’t have to be. Often the real difficulty is knowing how to get started?

First, start by building a list ranking your most to least profitable vendors by classification. This exercise will be very telling and will help establish your mind set for shopping the markets. Do the same thing for sizes, colors, and if you’re up to it, price points. Take your open-to-buy and begin to divide it up; allocate it to the top five or seven vendors in each classification, being sure to leave uncommitted open-to-buy for reorders, fill-ins and new vendors. I recommend that you put this exercise to paper. Only after completing this exercise should you begin to tackle the timing issue.

Next, take a minute to consider some merchandising realities. Higher priced merchandise normally sells earlier in the season, and lower priced items generally sell later. Recognizing this fact will help you understand how completion dates need to be constructed.

Another important fact to consider—your customers like to see and your sales people like to sell fresh merchandise, which means you need a fresh flow of merchandise arriving throughout the season. Many retailers have a habit of front loading, or landing most of the merchandise early in the season. The store may look great early on, but it can look equally as bad as the season matures. Many vendors offer price advantages or extra dating if you permit them to land merchandise early. This approach often backfires because the merchandise is picked over before the season begins. Moreover, the sales associates are tired of the merchandise before the season arrives.
Just as landing merchandise too early can be dangerous, so is landing it too late. Landing merchandise too late could be inviting markdowns because there is too little time remaining in the season. I often use the example of landing Christmas trees on the 26th of December, no matter how nice they are, it’s just not good retail sense. Another problem that surfaces is landing components at different times; for example a coordinate top without the matching bottom. It’ s critical that vendors ship related items together or within days of one another for your ideas to be profitably executed.

The final key to scheduling ideal delivery dates lives in your open-to-buy. Your open-to-buy, provided by RMSA, will reflect planned receipts by month, over the course of the season. Once you receive your monthly open-to-buy, you can then create a percentage of planned receipts per month, instead of a lump sum amount. Your monthly open-to-buy will reflect current trends and consumer buying patterns as they unfold over the course of the season. An additional benefit is that your accounts payable will be easier to deal with, and your cash flow will better mirror your expenditures.

I’m sure you already have an idea of who you intend to buy from for the spring season. By following these simple steps you’ll have a clear picture of how receipts should flow. The closer you adhere to your outline the better your business will perform.

Don’t put off the task of building perfect delivery dates. As you know, timing is everything.

“Tis the Season for Giving the Gift of a…SMILE

 

December is a month of special holidays for most of us. It’s a time when retailers anticipate, and hope for the very best. Many expect the largest sales, the highest profits of any month of the year. You have worked very hard over the course of the season to prepare for this important month. But have you done everything that you can to ensure success? Here’s a very important gift that is often overlooked by owners; give your associates and your customers the gift of a smile and some enjoyment.

If we have lost anything in retail over the last twenty years it’s a smile and some fun during the holiday season. When I say fun I don’t mean a Christmas party or breakfast with your crew and I don’t mean Christmas music in the background. I mean impressing upon your associates the importance of making December a fun and joyful experience for your customers and associates alike.

That sounds like a tall order, knowing the number of hours your associates will have to work, but joy and fun can be had during the hustle and bustle of the holiday season. As the owner, the responsibility of ensuring fun during the gift-giving season lies with you. You set the stage for your employees to follow.

As retailers, you strive to offer customers something “different.” You provide a fun and compelling reason to shop at your store. Excellent service has often been the “difference” and is the hallmark of the specialty retailer industry.  That superior level of service stands out even more in today’s environment. If you are like most specialty retailers, you’ve come to know your customers by catering to their needs. You understand their desires, their tastes, and attend to these areas while being prompt, friendly and helpful. A clean tidy store stocked with your best selections is a key part of attending to your customers needs. A tidy store coupled with well-trained associates is the cornerstone to excellent service.  Why not strengthen your position in the minds of your customers and associates by adding one more cornerstone to your list of excellent customer service: happiness.

Put forth the effort to ensure that your associates are happy and not overly stressed.  In doing so, your associates will provide joy and excellent service to others.  See how often you can get your customers to show a smile and a little laughter during December.  Distinguish your store as the PLACE where customers shop not only for the quality of the merchandise, but for the quality of the people that make their shopping experience enjoyable.

Walt Disney coined the phrase “The Happiest Place on Earth.”  His goal was to make your experience at Disneyland like none you have ever known.  The employees (or “cast members” as they’re called) are enthusiastic about helping you and always wear a smile. Why not make your store the happiest place to shop?  There’s no month more important than December.

I’m smiling when I say this, “From everyone at RMSA, we wish you the happiest of holidays!”

RMSA’s HELPFUL HOLIDAY HINTS

 
As you know, the holidays are closing fast upon us once again, bringing with it the challenges of making it a successful one for retailers. We asked our RMSA Analysts to offer some holiday tips in order to make this busy time of year run a little smoother and improve the success of the season. The following are some great tips they provided:
 
 
 

  •  View Your Store From the Outside In. – Not Inside Looking Out. At least every other day, go outside and view your store as your customers see it.
  • Expand On Key Holiday Item Selling Displays. – Change displays in prime locations, changing once or twice a week.
  • Assure Customer Services are in Place. – Holiday wrap stations, review hold and layaway policies, security – anything to improve customer satisfaction and convenience.
  • Keep Aisles Accessible. – Allow for good traffic flow while keeping appealing seasonal merchandise in view and in reach.
  • Keep Sales and Wrap Desks Uncluttered. – When you are in the midst of the busy season, keep a neat and organized appearance.
  • Check and Recheck Supplies. – Have you anticipated your increased needs?
  • Set Goals For Sales Associates. – Create daily/weekly goals and incentives to help motivate the sales staff and improve your chances of a successful season.
  • Congratulate and Praise Your Staff. – Let employees know how valuable they are to the team. Remain positive, constructive and give suggestions for improvements as needed.

Trick or Treat?

October is here, will it be full of tricks or treats? October has always been thought of as an in between month for retailers. It’s too late to rely on back to school; it’s too early to expect Christmas business. October is, in fact, the heart of the fall season.

What does fall look like? We think of fall colors as oranges, yellows, burnt reds. Unless you’re buying against the current color pallets, those colors are probably not in your inventory. Then what should you do in October? Well, it’s a great practice month. It’s a wonderful staging month for the holiday season, and it’s a great time to fine-tune your business. The inventory is in, the stage is being set and it’s time to turn your thoughts to execution.

October can be a wonderful time to experiment with store trim. I’ve often thought Christmas has been overdone. You have the perfect occasion to use two other trim and promotion opportunities in advance of Christmas to show your wares. For those of you old enough to remember, Thanksgiving was a warm, exciting time of year in retail, before the Christmas season was extended by retailers from September through December 25. The season has been stretched out so long now, that customers are weary of the Christmas shopping season before it ever arrives. Try something different to peak customer interest.

Am I really proposing you trim your store in black and orange, or hang skeletons in your windows? Maybe. . .why not! Many households in America are buying and trimming their homes for Halloween—it’s a sure bet if they have children. Why not use the occasion to send a mailer asking your customers if they have any old costumes in their wardrobe that need replacing? A costume doesn’t need to be apparel. It could be old skis, golf clubs, home furnishings, jewelry that looks out of style. At the very least, you’ll get their attention If you have a comprehensive customer profile on each of your customers, you can do this very accurately. Do you have a detailed customer profile? If not, why? Recognizing that retail expansion in America is growing significantly faster than the buying population, how do you intend to gain a larger share of the pie? Large retailers are investing millions tracking customers buying patterns, all major food chains are fine-tuning customer profiling through buying clubs and coupon redemption. Specialty retailers must also invest in and develop strong links to their clients.

October is a great month to test your ability to serve your customers through the holiday period. Take this month to begin the process. Be sure you’re ready to communicate with your customers either through direct mailers, telephone calls, or better yet, a note from the sales staff. Customers can be very receptive to new ideas and fresh approaches. It’s no longer enough to just land new merchandise. It’s just as important to find a way to differentiate your retail establishment from others. Why not become the best at communication? Why not be known as the store with the most unusual or timely window trimming? Become special at something! October is a perfect time to try those new and unusual approaches to retail.

Maybe October will become the most important retail month of the year. It can be if you provide the thought and effort it requires. Get tricky. . .make it a treat!