Weathering The Economy Retail Trend Report
Courtesy of Smart Work Meida
Retail Report Men’s, Women’s, Children’s: Industry experts weigh in on best strategies for retailers to weather the financial meltdown. Store owners and merchandisers will find sound advice relevant to best business practices for fashion retail in this less-than-friendly economic environment. Regradless of the article’s jewelry store focus, there is opportunity to be found. Courtesy of Smart Work Meida, the Magazine for the American Jewelry Store Owner.
The Year We Felt Wall Street’s Pain
Joe Long, vice president of marketing for the Shand Group, an advertising agency specializing in luxury marketing, says recessions - even THIS ONE - don’t last forever. It might seem crazy right now to look at such a dramatic downturn as an OPPORTUNITY, but that’s exactly what Long and other experts recommend.
It’s an opportunity to balance your inventory, unload old stock, imprint your brand on your community’s consciousness, and embark on a reinvention - of your store, your website, your party planning, your customer service and your attitude. Long says a recession signals a time of consolidation that ends with survival of the fittest brands.
How do you make it to the other side? Consider your business fundamentals - efficiency, inventory, customer loyalty, level of ingenuity, access to capital and your personal determination and fortitude.
“Make the most of this time,” Long says. “You may find that when the economy picks up again your new-found strengths will have placed you at the top of your game, and perhaps in a whole new league.”
The jewelry industry is not tied to housing as some other markets are, such as furnishings or flooring. And because jewelry can be a self-purchase, as well as a gift, it is a bit more resilient and likely to get back on course faster as the economic environment improves. Focus on the fundamentals and be competitive. To earn the sale, give customers options to stretch their budget further (i.e. financing options and merchandise choices) and differentiate yourself by providing the best possible service. Regina Leadem, Sales Leader, Luxury Industry, GE Money
Joe Murphy: It’s a very challenging holiday season and most retailers are running 5 to 15 percent off from last year. When the economy does take a downturn a buying organization becomes more important. In an economy like this, it’s good to know they don’t have to go it alone. Joe Murphy, COO of Continental Buying Group
Specialty retailers do very well during recessionary times. Jewelers who do well will do well because they have inventory, they have merchandise, they have a stronger core of customers. It still comes down to making emotional connections with people, and you have to understand the whole issue of expertise and education. The No. 1 retailer per square foot is the Apple Store. Why? The Genius Bar. It’s expertise. THAT is the thing that works. Sell your expertise. Rick Segel, retail sales consultant
This will be a price-point Christmas. If you need some lower price points and don’t want to buy some, take some of the higher pieces and retag them into a lower price point. Put signs in your showcases showing ranges of prices; under $99, $100 to $199, $200 to $299, etc. Also, you’ve been reading forever here in INSTORE to unload old merchandise. Those who have done so have something some of you don’t: Smaller debt, larger bank account and credit or cash available to buy fresh, new and exciting inventory. So get rid of inventory for sure if it’s over 18 months old, even if you have to scrap it. David Geller, author and consultant
It seems that the toughest times are in the stores where the panic level is the greatest. What I am seeing is a lot of business owners and salespeople willing to use the economy as an excuse for a lack of energy and innovation in their stores. Even in the worst of times, people still get engaged and married. They still celebrate birthdays, anniversaries, births, achievements and love. The fact is, though, that if your typical customer spent $2,000 last year, he may spend only $1,000 this year. Recognize that the smaller average sale means that you need that client AND his best friend. Innovative client development and active pursuit of referral business will be the hallmarks of success. Kate B. Peterson, president and CEO of Performance Concepts
What I’ve seen from our group of 32 family-owned independents is that those who aggressively embrace new ideas are the ones who will not only weather the storm, but thrive. One example is buying gold off the street; Leading Jewelers Guild members pooled their expertise earlier this year to create a manual on how it’s done. Today, many of our 150 stores are making their numbers, not by selling jewelry, but by buying gold. Now we’ll see how many gold sellers can be converted into customers for the holidays. James “Jimmy” West, executive director, Leading Jewelers Guild
The economy always comes back. It may take a couple of years, but before that things will be back to some semblance of normalcy. I would try to hang onto the assets that would be useful when things come back. If you have employees who are productive, even if they may not be fully utilized, hang onto them. When times are good, it’s hard to find good people. If you get some loyalty built up by keeping them floating during the bad times, they may not jump ship during the good times. I wouldn’t make a rash decision now. Dr. Peter VanderHart, professor of economics at Bowling Green State University
The tight credit markets mean that retailers not only have less credit available to buy inventory, but also are facing lower credit limits and tighter terms. So the inventory they buy must be turned over even faster. Tight credit markets have simultaneously affected a trio of key players in retail: lenders, vendors and spenders. I would do everything I could to minimize my operating expenses. I would carefully go through my payroll and look at peak and non-peak selling times, and I would suggest cutting back on hours during the non-peak time to save those payroll dollars. I would carefully review my inventory; the last thing I’d want to do is be overstocked in items. I may take a little more risk. I might be more liberal in terms of markdowns, advertising and promotions. Ken Simon, managing director of Loughlin Meghji & Co.
Consumers from all economic groups will be overly cautious in their spending. Entry-level and modest price points should be planned into everyone’s merchandise mix and kept in stock at all times. Older inventories should be re-priced to fit the holes in your merchandise mix without having to buy new inventory. Introduction of new styles should be more strategic - meaning items are bought to fit into specific price points. The credit crisis will affect suppliers’ inventories: Don’t expect suppliers to be keeping huge back-stocks of inventory as they had in the past. Their banks won’t allow it. Therefore, retailers should be far more diligent about stocking their basic merchandise, backing up their multi-sellers and reordering fast-selling product at least once a month. Abe Sherman, CEO, Buyers International Group and Balance to Buy inventory management program
10.As a retailer or a manufacturer, if you do not consider your business a brand, you may be faced with an even greater problem than the economy. Many companies cut marketing and advertising budgets as a reaction to tighter consumer spending. But by weakening your marketing and advertising, you’re leaving the kitchen when it gets too hot, and when things get easier, it will be harder to regain your stature in the new landscape because of the stronger or newer players who’ve taken your spot. The market will be moving on while you stay still. Joe Long, vice president of marketing, The Shand Group