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Don’t Just Go With the Tide

If you have ever studied the topography of Lake Erie, you’ll know it is one of the shallowest of the Great Lakes. It is shaped much like a swimming pool with a shallow end to the west (25-30 feet deep) and a deep end over near Buffalo, NY (210 feet deep).

When the winds come strong out of the west they blow that shallow end all down to Buffalo. Storer Camps used to have a sailboat docked at a marina on the west end and some days the boat would be resting on its keel at the dock because the water had drained completely out of the marina and blown east.

All boats rise with the tide. But also all boats fall.

Your business rides on several tides.

There is the tide of the economy. When the economy is booming, even the mediocre retailers can make money. When it is in the dumps, only the smart retailers who shored up their business rather than just rising with the tide are making any money. (This affects you both locally and globally.)

There is the tide of your sales team. The worst person on your sales team is blowing all the water to Buffalo. Hopefully you have enough good people pushing the water back.

There is the tide of products. A good fad or hot trend can fill the marina fast. You just never know when it will drain.

There is the tide of demographics. As they grow, so does your sales, but as they grow, so does your competition. The competition just doesn’t wash away as fast as the demographics might.

People who live or work along the shores of the Great Lakes and the coasts pay close attention to the tides. Their tides are predictable.

Your tides are not.

But you still need to be paying attention to them.

Are you tracking the local and global economy and adjusting your inventory to match?

Are you measuring your sales people and training up the lower producers?

Are you following the trends in your industry and comparing them to past trends to see how your store fares with each passing fad?

Are you measuring the demographics and watching for any major changes and how those would impact you?

All boats rise with the tide, but only the smart boats know when to set sail to take advantage of the rising (and lowering) tides.

Sometimes it is best to set sail and go get those sales before the tide falls too far.

-Phil Wrzesinski
www.PhilsForum.com

PS I’m channeling my oceanography degree and sailing background for this post. Just remember that when you’re rising, so are your competitors. In a sailboat race the lead boat always wants to do whatever the trailing boat does to keep that boat from gaining. The trailing boat, however, has their best chance to overtake the lead boat by following a different path.

Everything Everywhere, Nothing is Special (Except You)

If there is one universal truth in retail it may well be this …

The hottest product on your shelf last year will be on everyone else’s shelf this year.

Every year in my two-and-a-half decades as a buyer I would watch another vendor cross over to the dark side and start selling their goods in the big-box discounters and Toys R Us. Proud brands that had grown and flourished in the independent specialty channel were cashing in with the big boys, who would undercut our prices and ruin a fine brand.

This happened Every. Single. Year. And the reaction was always the same. A lot of crying, complaining and gnashing of teeth on the part of the indies while we scrambled to find suitable replacements.

I never took part in the gnashing. Maybe it was because I had seen it happen enough times to come to expect it. Maybe it was because I grew up in the industry before that delineation between mass and specialty product channels even existed.

Page 1 of the original Business Plan for Toy House, circa 1949

My grandfather had two utility bills at our building on Mechanic Street. He got that second bill so that he would have “proof” of a second address separate from the retail operations. He did that for one reason only—to set up a “distributorship” so that he could buy certain toys he wasn’t able to buy directly from the manufacturer. Back then you could only buy certain lines through distributors, so he became a distributor just to get products. He didn’t care who else was selling the product. If it was a good product, he wanted it in his store.

He knew he could sell it.

In the 80’s and 90’s that mindset changed. Indie retailers shied away from products sold in the mass-markets and created what we called the “specialty” market. Some of that was to protect profit margins. Some of that was because we bought for different reasons than the mass-market.

In my industry the mass-market bought toys for quick turn-around—toys that had name recognition, shelf-appeal, and were backed by advertising. We bought toys for play value—toys that spurred the imagination and creativity in a child.

Once the specialty market built up a brand into a recognizable name with enough money to advertise, the mass-market would swoop in and snatch them away, sending us off again in search of the next great “specialty” line.

Today, however, the lines are once again blurred. In the toy industry especially, with Toys R Us out of the picture this holiday season, all kinds of retailers are popping up with all kinds of toys. There is no differentiation between “specialty” and “mass” in terms of products or distribution. Nor will there be for the foreseeable future.

Everything is now sold everywhere. Nothing is “special” anymore.

The only thing “special” about the specialty stores is You. How you run your store, the people you hire, the relationships you build with your customers, the involvement you have with your community, the events you host, the teaching you do—that is the Special part.

I tell you this to remind you that pop-up stores are about to start popping—not just in toys, but in all categories. Some of them will have products you sell. Don’t fret about that. Here is one other universal truth in retail …

No pop-up store will ever be able to sell products as well as you can. 

Their staff doesn’t have the training. Their leadership doesn’t have the passion. Their business doesn’t have the connections. When you play up the parts that truly make you Special, you cannot be beat. (Hint: it isn’t the product that makes you special anymore.)

The best way to protect yourself from pop-up stores and the loss of specialty brands is to double-down on your training right now. Download the Free Resources on Customer Service. (There are several good ones in there.) Go over this stuff with your team. Role Play the scenarios and look at how you interact with new customers. Talk about how to be better at curating a selection. Learn the benefits of your new products and better ways to close the sale. Practice using new phrases to eliminate the deal killer phrases we all use.

The products come and go. The relationships build your business and make you truly Special.

-Phil Wrzesinski
www.PhilsForum.com

PS Some of you are going to have stellar years without any extra training. Don’t get lulled into a false trap. Every boat rises with the tide. Consumer spending is up. The economy is relatively strong.  But if you’re watching the news, you know a lot of shuffling is going on in retail. The stores with the strongest relationships with their customers will find the greatest success in the long run. Consider that another universal truth. Make you store truly Special this holiday season. The gains will last well into next year.

PPS Heck, simply teach your staff to do what my grandfather listed as the number three part of his Sales Plan—“Listen to customer until customer is clearly understood. Do not interrupt.”—and you’ll be doing more than most retailers out there.

Two Forks in the Road for Sears

In 1988 Walmart opened their first Supercenter in Washington, Missouri. The Supercenter concept heralded Walmart’s entry into the highly-competitive, low-profit, huge cash flow, repeat-traffic driver grocery business.

Two years later Walmart surpassed Sears in total sales to become the largest retailer in America.

By 2004 Walmart was capturing one out of every four dollars spent on groceries and remains the biggest player in the grocery industry.

Walmart ad in Vogue Magazine

In May 2005 Walmart did something completely unexpected. They ran a full-page ad of their new fashion launch in Vogue Magazine. Yes, Walmart and Vogue. No, it wasn’t a designer pajama line to wear when you visited a Walmart. Walmart wanted to do to fashion what it had done with grocery.

There was only one problem. Fashion isn’t a commodity like groceries. One year later Walmart reported declining sales for the first time (at a time when most retailers and the economy were booming). By 2007 they scrapped their foray into fashion and went back to what they did best—sell mass-produced items at cheap prices. When the economy tanked in 2008, Walmart found itself back on top with sales growth and cash flow.

I tell you this story in our discussion of the lessons from Sears filing bankruptcy (part 1 and part 2because it illustrates what can happen when a company tries to diversify the right way and the wrong way. Walmart’s model is built on selling cheap goods cheaper than anyone else.

Their foray into groceries made sense. Fashion, not so much. When Walmart began selling groceries it vaulted them to the top of the retail mountain. When they got away from what they did best, it caused them to falter.

Sears made the same mistake in the 1980’s and never recovered.

Sears made its living in the same style as Walmart—selling lower-priced items. One difference, however, was that Sears sold “value” more than price. The well-trained staff* would talk you out of the most and least-expensive versions of their appliances by showing you the “value” you got from buying something in-between with a lot of bells and whistles.

Sears also made its living by having stores near urban centers, but also a catalog to serve the less-represented rural areas.

This recipe put them on top of the world.

COMPETITION

While Sears had made a living selling to rural markets through their catalog, Walmart was quickly encroaching their territory with actual stores. Walmart went after the rural markets that didn’t have the retail glut of the urban locations, the same rural markets where the Sears catalog was most popular.

Walmart also used its growing power with vendors to bully them into better pricing to undercut the competition and define the sales in terms of “price”, not “value.”

Whether through hubris or ignorance, Sears ignored this threat and instead focused on diversifying their portfolio.

CORE VALUES

Back in 1930 Sears had launched Allstate Insurance, a value-based insurance company. The success of that led Sears to get into three other industries in the 1980’s—financial planning (Dean Witter), real estate (Coldwell Banker), and credit (Discover Card). 

Like Walmart and grocery, Sears and insurance was a fit. Insurance is a product people have to buy but want to buy it affordably (value). Like Walmart and fashion, financial planning and real estate were not a good fit for Sears because they aren’t sold the same way. Sears was sinking valuable time and resources into ventures that weren’t consistent with their Core Values or their primary business model.

Sears divested themselves of those entities in the 1990’s but by then the damage was done.

Walmart and Kmart surpassed Sears in sales in 1990. Walmart had redefined the lower-priced goods market, begun the serious race to the bottom, and infiltrated the rural neighborhoods where the Sears Catalog had been the lifesaver for so many families.

MAIL-ORDER BUSINESS

In 1993 Sears discontinued the catalog. The catalog business had shifted dramatically in the 1980’s because of the fanatical growth of retail stores in America. Why order it from a catalog when you can pop into a nearby store and get it today? The glut of retail, the cost of shipping, and the 7-10 business days shipping time was enough to kill the commodity catalog shopping that was the Sears catalog.

The only catalogs making it were for specialized companies selling specialized goods not found in stores (LL Bean, Eddie Bauer, REI, Signals, Orvis, etc.).

Then along came Amazon.

In 1994 Amazon launched their site. While there were a small handful of people who recognized the power of the Internet and what it could become (my buddy, Hans, actually pitched Borders Bookstore on the idea of selling online before Amazon launched and was laughed out of the room), I’ll forgive Sears for not seeing the potential.

Kinda …

Sears already had the mail-order business infrastructure set up. Sears already had the cataloging of hundreds of thousands of items done. Sears already had enough stores around the country at that time to set up a BOPIS system that even Amazon can’t yet match. Sears was part of a joint venture with IBM called Prodigy, so it was even involved in the Internet in its infancy!

This isn’t to say that Amazon wouldn’t have eventually cleaned their clock through better data, better customer-centric focus, and better operations, but just imagine if instead of trying to diversify, Sears was instead looking at new ways to do what they already did, only better and with the full use of the newest and latest technologies?

The lesson in all of this is simple.

First, understand fully and clearly who you are and what you do.

Second, don’t let anyone else do it better than you.

Sears let Walmart and Amazon do Sears better than Sears while Sears was busy trying to be someone else. Because of their size, it is a slow, painful death, but the choices that led to the bankruptcy were made in the 1980’s and 1990’s when Sears chose the wrong forks in the road and stayed on those paths too long.

-Phil Wrzesinski
www.PhilsForum.com

PS *I don’t know when it happened, probably in the 1980’s, but at some point Sears got away from their “well-trained staff.” Whether it was a cut in money for training programs, a shift in management away from training as a whole, a cut in payroll, or simply a belief that sales-training didn’t matter (a common thought in the 1980’s when everyone was selling at a high clip), Sears lost this competitive edge it held over the competition, especially Walmart.

PPS I did this exercise a couple times with my staff, but it was a question I asked of myself several times a year. “If I was going to open a store to compete with Toy House, what would I do?” When you ask and answer this question, you find the weaknesses in your model that can be exploited. You find where your competitive advantage is thinnest. Not only does this question help you find where competition could hurt you and shore those areas up before the competition strikes, it helps you constantly explore options for doing what you do better.

Lessons From Sears – Retail is Always Changing

“Phil, you know this store is going to put you out of business, right?”

My grandfather heard that first in 1962 when Shoppers Fair, a discount department store chain, opened in Jackson. We heard it when Westwood Mall opened in the 1970’s with a Circus World store (eventually becoming a KB Toys). We heard it in the 1980’s when Meijer opened their second store on the east end of town and Kmart opened a new store on the west end of town. We heard it in 1990 when Target came to town. We heard it in 1993 when Toys R Us opened.

Shoppers Fair Jackson, MI 1962

Shoppers Fair closed in 1974. KB Toys is gone. Kmart left when we did. Toys R Us left only a year after us. Montgomery Ward left Westwood Mall a couple decades ago. Younker’s is leaving Westwood Mall as I type.

Retail changes.

Jackson used to have a Woolworth store, a Field’s department store, a Jacobson’s department store, and an A&P grocery store—all defunct retailers now.

Retailers come and go. The retail landscape changes. Stores open and close.

We can look at Sears filing bankruptcy as just the natural evolution of retail. They had a good run, but now it is over.

In fact, I’ll go out on a limb right now and predict the eventual demise of Walmart. It might be fifty or one hundred years from now, but history shows us no retailer lasts forever.

The only problem with simply dismissing Sears as an eventuality is that Sears was once on top of the world, both figuratively as the largest retailer in America as recently as 1989, and literally when they opened their tower in Chicago in 1973. Their fall is far more educational to the independent retail world than Toys R Us and their debt problems caused by venture capitalists.

As a student of retail, I see two turning points for Sears starting their downward slide that incorporated the other five “lessons” I listed yesterday. One was in 1993 when they discontinued their catalog. We’ll talk about the other one tomorrow.

-Phil Wrzesinski
www.PhilsForum.com

PS There are several reasons why an independent retailer closes shop including retirement, illness, death, boredom, new opportunities, local market collapse, and competition. The big boys close for one reason and one reason only—Cash Flow. It is the decisions that lead to cash flow problems that I find most interesting.

Roll With the Punches

I picked up my son from summer camp today. He was in the Counselor-in-Training (CIT) program out at YMCA Storer Camps. As I have always done with my boys after a session at camp, Ian and I sat down to talk about the experience right away while it was still fresh in his mind.

After regaling all the experiences, I asked my son what was the one thing he felt he really learned at camp these past two weeks?

“How to roll with the punches.”

Image result for roll with the punchesRolling with the punches is a boxing technique. As a punch is about to land on you, you turn or roll your body away from the blow to lessen the impact. At freedictionary.com they also define it as, “to adapt to setbacks, difficulties, or adversity so as to better manage or cope with their impact on one’s life.”

I’m pretty sure Ian meant the latter definition. His first cabin of kids had a few setbacks, difficulties, and adversity for him and his lead counselor to handle.

For business sake (this is a business blog after all) let’s break that definition down further …

We know what setbacks, difficulties, and adversities are. In business we all have them. Local economic woes, street construction, your favorite line of products suddenly discounted online, a bad review on Yelp, a 20% jump in insurance costs, the landlord wanting to raise rent, a new competitor in town.

You’re never without setbacks, difficulties, or adversity.

The successful boxer rolls with the punches. The successful business “adapts … so as to better manage …” Just like the boxer, you have to anticipate the blows that are coming so that you can adapt to them and lessen the impact.

Street closures? Are you following the news, attending city council and planning meetings, or subscribing to government emails? Are you going to public hearings to not only hear what is being done, but have your voice be heard to find ways to lessen the impact these closures might have on your business?

Insurance costs? Are you working with a good business insurance agent and agency that can shop your account around to find you a better deal or work with you when rates go up to help you be aware more quickly? Are staying on top of all your expenses before they blindside you with a punch to the gut?

Landlord raising rent? Do you see your landlord as an adversary or partner? How would that change the relationship? How much sooner and with better intent would a partner inform you of a rent increase than an adversary?

Local economic woes? Are you measuring your market potential for your community by tracking national sales for your industry combined with local household income and population growth (or decline)?

Got a bad review? Are you actively monitoring social media and sites like Yelp and Google for mentions of your business? Do you have a plan in place for how you respond? Do you know the right questions to ask before you respond?

The successful business owner is rarely blindsided with a gut punch. He sees most hits coming and can roll with those punches. The key is to know that there will always be blows. You know which punches hurt the worst, too. Put a system in place to help you see those punches coming before they land directly on your business, and you’ll know how, “to adapt … to better manage or cope with their impact.”

-Phil Wrzesinski
www.PhilsForum.com

PS Two of the most profitable years in the Toy House’s 68 years of business were in 2009 during the Great Recession, and 2014 as our local economy and market was dying out. Although we took a gut punch in the fourth quarter of 2008, we saw the punches coming in 2009 and 2014 and were prepared for them. I know you already wear a few dozen hats. Being involved in city politics and tracking other numbers that affect your business might not be in your wheelhouse, but they do make a difference in how well you roll with the punches. Only you can decide how many direct hits you can absorb before you’re knocked out.

PPS Every boxer also knows the better you learn to anticipate the blows, the better you can counter-punch, too. That’s how you get ahead in boxing, in business, as a CIT at YMCA Storer Camps, and in life—by anticipating the blows, rolling with the punches, and throwing counter moves.

Cutting Expenses The Wrong Way

I was in Walmart yesterday. I had to pick up a few things. At the checkout, the cashier kept doubling bagging all of my items. I asked her why.

“These bags tear so easily that almost everyone has a ripped bag at the end. They used to be better but these new bags are too thin.”

Image result for walmart grocery bagsI hope for Walmart’s sake that the new bags are less than half the cost of the old bags. Otherwise their cost-cutting move is costing them more than it saves.

I get why they did it. I’ll bet their bags are a huge expense for them. I’ll bet someone pitched them the idea of a cheaper bag, or knowing Walmart, they probably went to their vendor and demanded a cheaper bag. The only way to make it cheaper was make it thinner. And now their employees are double bagging everything so that you can get your groceries home in one piece.

How’s that cheaper bag working out for you?

Bags, like so many other non-merchandise items, seem like a hassle expense. You know you need them but you hate paying for them. I know I did. But that didn’t stop me from buying better, thicker bags than I probably needed. Mostly because I also looked at bags as being a reflection of my brand. Cheap, flimsy bags send the signal that I care about my money more than I care about you. Sturdy, reusable handle bags say I care about you more than I care about money. (Remember that Values post I just wrote?)

The problem is that we too often look at our expenses as single, individual entities instead of how they fit into the whole. We make decisions on those expenses purely on a financial basis instead of thinking about how we want to present ourselves and how we want our customers to feel about us. You have to consider everything, otherwise your cuts may end up costing you more.

In the 68 years we ran Toy House, one of our most profitable years was 2009, smack dab in the middle of the great recession. I had to cut expenses that year to get that profit. Here is a post I wrote January 11, 2010 about how I cut those expenses … “Cutting Expenses the Smart Way”

Sometimes you need to cut expenses. How you cut them is often more important than how much you cut them.

-Phil Wrzesinski
www.PhilsForum.com

PS This trip down memory lane looking at old blogs has been fun for me. Maybe it will be fun for you. Here is a link to one page with all 897 blog posts to date.

Is the Retail Apocalypse Upon Us?

You have to be older than me to remember Shopper’s Fair. That was the first store that, back in the early 1960’s, was going to put my grandfather out of business. They were gone before I was old enough to spend my first dime. I do, however, have memories of Woolworth’s downtown and Montgomery Ward at Westwood Mall. I remember walking through Montgomery Ward, marveling at how big the store seemed. (I hadn’t yet been to Macy’s in Manhattan.)

Shopper’s Fair, Woolworth’s and Montgomery Ward are gone. Each because of their own individual circumstances. Here is a list going around the Internet these days of current closures and stores struggling in retail.

Businesses often cite a variety of reasons for closing:

  • Poor Economy
  • Changes in Industry
  • Unfair Retail Landscape Slanted Against Them

The reality is that most closures happen because of a Lack of Cash Flow. 

When the money quits coming in, the stores don’t have the money to pay the bills, don’t have the money to replenish the shelves, don’t have the money to invest in technology, upgrade the infrastructure, or train the employees. Lack of cash starts a downward spiral that is hard to escape.

More often than not, that Lack of Cash Flow happens because of Bad Management. Bad management of:

  • Employees—no training on how to relate to today’s customers, build the relationships that matter, and make the sale
  • Inventory—old merchandise, too much merchandise, too little merchandise, the wrong merchandise
  • Change—not adapting quickly enough to the changes in the industry (All industries change. Some disappear. There is a distinction.)
  • Goals and Vision—not having a clear view of where you want to be today and where you are going tomorrow

Many stores have found ways to thrive in an unfair retail landscape slanted against them. Many stores have found ways to navigate the changes in their industry and customer base. Many stores have found ways to thrive (or at least survive) in poor economies. 

Bob Phibbs, aka The Retail Doctor, posted an amazing blog about the experience (or lack thereof) in music stores today that addresses the first bullet point above. As a singer and mediocre guitar player, I can relate to everything in his post. This is a problem abundant in retail right now, and one that can be easily addressed. Amazon isn’t winning customers so much as brick & mortar stores are losing customers. Go read it right now.

It will be the best thing you read this month.

Overall, retail is growing. The stores in the meme above are losing market share to their competitors because management hasn’t trained them well, positioned them well, or managed their resources well.

Is the Retail Apocalypse upon us? I don’t think so. Stores open. Stores close. Just ask Shopper’s Fair, Woolworth’s and Montgomery Ward.

-Phil Wrzesinski
www.PhilsForum.com

PS I have seen the above meme used by the left to lay the blame for these closures at President Trump’s feet in much the same way many on the right tried to hang everything bad around President Obama’s neck for eight years. I have news for you. None of these closures are because of who is president or what the president has done. They would have happened under Hillary Clinton, Bernie Sanders, you, or me.

PPS Yes, my store was a victim of cash flow problems. Our market share didn’t change, but our local market did. Because of shrinkage in population, household income, and the average money spent on toys, our market in 2016 was only 53% of what it was in 2007. Our store was too big for our economy. We could have shrunk it down to fit, but we wouldn’t have been the store you remembered. We chose to close instead (a choice discussed in the boardrooms of every one of those companies listed above). With Toys R Us closing, many have asked if I will reopen. Unfortunately, the market hasn’t improved enough to justify reopening.

Indie Retailers Best Poised for New Retail Model

A few years ago I went to lunch with a fellow toy store owner. I had wanted to see his store, so we made plans for me to visit and then go get lunch. Since we were in his town, I left it up to him to pick a place for lunch. What he said next I still cannot believe.

“Well, my favorite lunch place is out because I went there yesterday. A couple of our city council members stopped by and took me to lunch to ask me if there was more they could be doing for my business.”

Jaw meet floor.

That kind of respect for a local independent business is a rare bird in the world of government. Instead we see communities falling all over themselves to throw money at Amazon, not realizing that even if they don’t get an Amazon HQ or DC, they are still “giving money” to Amazon as local tax revenues are lost while local independent businesses struggle to survive.

For most indie retailers, even the government is slanted against us. You pretty much have to be a chain store or opening a mega-store for government to throw you any kind of bone.

In spite of all that, local independent retailers are starting to see a surge.

In a recent article discussing the problems plaguing Walmart, the author said, “Selling products to strangers doesn’t cut it anymore. To succeed in retail today you need to start with the customer, not the product.”

The article went on to talk about how several eCommerce sites are expanding into brick & mortar to better serve the customers.

Do you know who is best-suited to take advantage of this it’s-about-the-customers-more-than-the-products era of retail? You guessed it! Local independent retailers.

Believe it or not, it hasn’t been about the products for indie retailers for over a decade. It used to be that if you invented a new product you had to pitch that product to existing vendors or go into manufacturing yourself and pitch it to a handful of indie retailers to get started. Then, after the product gained traction and had sales history, bigger vendors might take interest. Once the bigger vendors got their hands on it, the product could make its way to the masses.

That model is gone. Now if you have an idea, you crowdfund it and launch it online until the big guys swoop in and buy you out.

Local indie retailers have had to build relationships with customers and offer them curated selections of great items they’ve likely never seen before to succeed. Fortunately, that model works. According to the article, that’s the new model of retail. According to me, that’s also the old model of retail.

Fostering relationships with your customers and building loyalty through something other than a frequent purchase discount never goes out of style. 

The simplest way to do that is:

  1. Figure out what she desires, needs, and expects.
  2. Give her more than she desires, needs, and expects.

I call that the Simplest Business Success Formula Ever. This is what the companies in that article are doing.

This is how you compete in today’s retail environment. You can’t control what product fads will be hot. You can’t control what vendors will stab you in the back (pro tip: every year at least one vendor goes back on his word about a product or product line he promised to keep exclusive to the indie channel.) You can’t control what products you will actually get shipped. On top of that, you can’t control what happens to the local, state or national economy. Nor can you control Mother Nature.

But you can control the experience someone has in your store. You can control the type of people you hire and the training they receive to be able to figure out those expectations and exceed them regularly. Do that and you’ll control your destiny as well.

-Phil Wrzesinski
www.PhilsForum.com

PS Your local government would do well to understand the formula, too. If they would create an environment where the needs and expectations of indie retailers were met (and exceeded), they would see tax revenues begin to rise. Indie retailers typically have more staff and a higher payroll per sale than the chains. Indie retailers typically use less land and less local services (police/fire etc.) than the big chains. They also create character, draw outside traffic, and give local communities their charm. Yet, in the last twenty-five years, that opening story is the only time I have heard firsthand about a government trying to exceed the expectations of their most profitable “customers”.

What to Do With the First Quarter Blues

I went for a walk/jog down the Falling Waters Trail a couple days ago. It was sunny and in the mid-50’s. My dog, Samantha, and I enjoyed getting out of the house. There is something about those early spring days when you get that sense of renewal, that rebirth of energy. Of course, today, I stare out at five inches of snow courtesy of our bipolar vortex. Just when you think you’ve turned the corner on winter, Mother Nature smothers you with another blanket of white. So much for that rebirth of energy.

It’s easy to get the blues.

Image result for cabin fever clip artEspecially if you’re a fourth-quarter retailer. January feels like a relief from the exhausting marathon of Christmas. But by February, when the bills have all been paid and it doesn’t seem like any new cash is coming in, it gets to be a drag.

If you’re a jeweler or florist, you get Valentine’s Day. If you’re a toy retailer or candy shop you get Easter. But that isn’t a lot to carry you through the First Quarter Blues.

Here is a list of different things you can do during the quiet times to combat the blues.

  • Paint the store. A fresh coat of paint brightens the mood and lifts the morale of the staff.
  • Re-do all your signs. Print new ones, change wording, make them more fun and in alignment with your Core Values.
  • Work on new selling techniques. Hold trainings, do role playing, practice new techniques.
  • Make displays for out-of-your-category gifts. For instance, January-March are big baby shower months (no one wants to hold them in November/December because of the holidays). Put together an endcap of great “baby shower” gifts – even if you don’t sell baby products! A hardware store could do a display of “build your nursery the right way”. You could also do “gifts for the mom/dad-to-be.” Get creative. The same is true for weddings. The bridal shows are January-February. Bridal showers are March-June. Put together “bridal/wedding gifts” like board games if you’re a toy store (the family that plays together, stays together), or tool kits. I got a drill as a wedding gift from a thoughtful friend.
  • Get creative with your social media. Post often about a wide variety of things (not all related to selling your products). Have a contest among your staff. Make them all admins. Allow them two posts a day. See who can get more comments and shares in a week. Pay the winner $20. Do it for five weeks. It will be the best $100 bucks you spend on social media this year because you’ll see what kind of posts move the needle.
  • Have a contest of some kind. Maybe a raffle for charity. Maybe a “taste-test” where you put two competing products side by side. (I can see this for tools, for toys, for shoes, for cleaning products, for foods, for strollers …) Maybe a competition. We did a five-week March Games Madness where we pitted four games against each other for four consecutive Friday nights. The game voted the best each week made it to the final four. The fifth week we crowned the champion.
  • Spend more time networking. Send everyone on your team to different networking events.
  • Rearrange the floor layout. Stand at the front door and look around. See what catches your eye. Redesign the store so that your customers can see farther into your store. And make sure something cool and compelling is in those sight lines.
  • Clean and fix everything. Everything.
  • Make your bathroom cool. When George Whalin wrote Retail Superstars: Inside the 25 Best independent Stores in America, he mentioned the really cool bathrooms for 14 of the 25 stores.
  • Make a list of your top 50 or 100 customers with phone numbers. Assign them to your staff to call each person and personally thank them for shopping in your store. No sales pitch. Just a simple, “I want to thank you for being a customer last year. We truly appreciate your business. Have a great day!”
  • Make a goodie-bag for those same top 50 or 100 and personally deliver them. Free. No questions asked. (Thank you Brandy & Eric for this idea!)

The customers will be back soon enough. You have new products rolling in. Take this time to plant the seeds for future sales by refreshing the store, training the staff, and getting creative with your marketing.

That’s how you beat the First Quarter Blues.

-Phil Wrzesinski
www.PhilsForum.com

PS I would love to hear your suggestions for additions to this list. I know there are some really good ideas out there. Help me share them with the world.

Two Pictures to Make You Feel Better (Or Worse?)

I started writing this blog August 9, 2008, shortly after my first gig as a public speaker for the retail industry. My first post was about a Christmas present I received and the announcement that I would be playing guitar in public* for the first time at the Nomad Bookhouse.

(*Apparently back then I didn’t consider playing guitar in church as part of worship “playing in public”.)

By October of 2008, a group of us local business owners had launched Jackson Local First, our Shop Local organization for the community, and my blog changed. From that point forward it was less about toys and Toy House and Phil, and more about you, the indie retailer and small business owner finding new ways to compete with national chains and the Internet.

Since those early days (and you can find every single post archived on my website) my goal has always been to help you feel good about being in this career by showing you concrete ways you can compete and win, while also giving you the background information why those ways work. If you are new to this blog, you might want to sift back through some older posts. There are some true nuggets tucked away for those willing to look. (Okay, so maybe you’re a little busy right now. Put it on your calendar for January.)

This post, however, might not make you feel all that great. I’m going to post two pictures taken in the two malls here in Jackson.

Here is picture #1 …

This picture was taken on the Saturday of Labor Day Weekend—a typical shopping holiday—in Westwood Mall at 11:30am (anchor stores of JCP, Younkers, and Walmart). Notice the lack of shoppers. Now, in all fairness, Jackson is a county filled with lakes, so it is possible the lakes trumped shopping. You could roll a bowling ball the length of that mall without fear of hitting anyone.

Here is picture #2 …

This picture was taken last night at 7:46pm in our other mall, the bigger, busier one with Toys R Us, Target, Best Buy, Kohl’s and Sears as anchors.

Once again, this could be the result of the economic woes in our county and the shrinking population—the two factors that led to our choice to close shop. Or it could be a symptomatic problem with a much bigger cause. (What I find most amazing in this pic is that this is the “walkers” mall and there isn’t even a group of walkers pacing the corridor.)

Malls everywhere are in decline. This problem was reported heavily in 2016. And now with the Retail Apocalypse of 2017, you can expect traffic to decline even further.

Like I said, this may not make you feel better, especially if you are in a mall location.

Here is why you should feel better.

The decline in mall traffic is really caused by two things—cellphones and incredibly poor customer service. Cellphones have replaced meetups. You don’t go meet your friends at the mall anymore because you’ve been texting them all day long. Many people thought teens hanging out at the mall would be a bad thing. It wasn’t. Someone had to drive those teens (malls weren’t typically located in high-density neighborhoods). Parents who drove their teens to the mall would often stop in so as not to waste a trip. That familiarity led to future trips.

Unfortunately, those days are long gone. The mall is no longer a meet-up, drawing its own traffic. You have to want to shop there to even bother making the trip.

That’s where the stores, themselves, have failed. Too many mall stores relied only on the mall and its anchors to draw their traffic. They never knew how to draw traffic themselves. As the malls drew less and less traffic (and/or the anchors kept expanding their departments to eat into the mall stores categories), these stores cut back on personnel to match dwindling sales. Of course, that led to a downward spiral in what was already poor levels of customer service.

Is it any wonder that Outlet Malls, where Transactional Customers don’t expect any service in the first place, continue to draw traffic while traditional malls suffer? When someone else is drawing your traffic and options are fewer, you can get away with poor customer service. That type of retail climate no longer exists.

Nowadays ALL retail is destination retail. People only go to shops by choice.  Since independent retailers have always been destinations by nature, you are best suited to win the brick & mortar dollars of today (of which by last count there are still over a trillion of them). You win in this game by being the destination, the store everyone wants to go to because it is fun, exciting, worthwhile, important, friendly, helpful, surprisingly delightful.

Those pictures aren’t meant to scare you. They are meant to inspire you. The malls didn’t lose to the Internet just because the Internet exists. They lost because they didn’t take care of their customers.

-Phil Wrzesinski
www.PhilsForum.com

PS This does beg the question … If you are in a mall, should you move? The answer is complicated. If you truly have created a destination store, you can make it work almost anywhere. If you are paying mall prices and not getting mall benefits, however, you might want to contact a realtor and see what is out there. We’ll discuss the pros and cons of location later, okay?