Economy

Pick your poison…then cash in

by Cinda Baxter on August 31, 2008

Some of the best advice I’ve ever received came from my friend Al Fahden several years ago, as I was bemoaning the fact a (smarmy) discounter had relocated to a store across the street from mine. He reminded me that retailers make a choice to be one-—at most, two-—of three things: a price leader, a product leader, or a service leader. You can’t be all three at once. Just isn’t possible.

He was right. I opted for product and service, then kicked butt against the price princess less than 250 feet away. Sweet.

I’m reminded of that often, as retailers struggle with how to approach the flagging economy. Al’s advice stands true today-—pick one or two and go for it. Apparently, Virgin Atlantic’s CEO, Steve Ridgeway, is of the same ilk, believing that if you offer quality product and great service, customers will come.

Well folks, the proof is in the pudding…or the profit, as is the case here. VA’s annual revenue is up a whopping 38% among airline competitors that appear to be racing to the bottom of the pile as fast as they can, slashing everything but the toilet lids along the way (just wait…they’re next).

And to what does the wise Mr. Ridgeway attribute this growth? Instead of trying to make money by cutting out everything but the bare necessities, he reminds us:

…the winners will be those airlines that focus on offering the best customer service. We have … focused on providing the best product in Upper Class, Premium Economy and Economy….

Granted, it’s not as simple as “If you build it, they will come;” you still have to market the heck out of your product, then provide seriously great service. But pull that off and you’ve got a fighting chance at making some money.

And that, my friends, is true for retailers. Great product is vital, but more than that, service, service, service is the key. Customers are frustrated by the economy. By the election. By the stuff that just pulls them down. Give them a safe haven where they can hang out, laugh a bit, and feel like they’re the most important person in the room, and you’ve got a winner.

A little hospitality never meant more.

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Numbers Unplugged

by Cinda Baxter on July 25, 2008

in Economy, Independent Retailers, Marts, Rant, shows

My heartfelt rant about the numbers game and Atlanta attendance is apparently getting some traction. Have had a couple of phone calls and emails from vendors asking where, then, I think the disconnect is between what they saw in their showrooms and the actual attendance count data. Here’s my response:

1. Look around your showroom. Are the products offered also begin carried online? If so, there’s part of your problem. Retailers are avoiding things that can be found in their stores, then purchased online for a discount. Why in the world would they want to be some e-tailer’s free showroom?

2. Are your vendors selling to big boxes? There’s another part of your problem. Independent retailers have had it with Target, Kohl’s, WalMart, and the like. They’re trolling those aisles before they come to market, making darn sure they don’t pick up the same stuff.

3. Did your vendors offer new product? Did you show new lines? If not, well, duh. Explains why the temps had foot traffic and you didn’t. Lots more newbies…less overexposure.

4. There are three types of buyers right now:

(a) those with ample spending money
(b) those closely watching budgets while buying responsibly, and
(c) those who don’t have money, period (aka: the “Lookie Loos”)

Group A showed up and ordered. Group C skipped the show entirely (don’t even try to tell me that’s a bad thing), and Group B-—the vast majority of buyers-—will be working with your road reps or faxing in orders from catalogs. That’s not lost business. It’s rescheduled business, if you play your cards right and attend to their needs without making them feel pressured.

5. Smart buyers aren’t front-loading with as much inventory as before. Smart buyers are bringing in sure sellers, at a conservative pace. They plan to place reasonably sized re-orders as needed, rather than take on a whale-sized shipment all at once. As cash comes to them, orders will come to you. Can’t judge a show on just the paper written at it any more; technology and a sagging economy stretch that window out by six months.

6. Double check your math. When pondering quieter hallways at the show, did you factor in the reality that most buyers are clipping their stays down to two or three days? Ex: Let’s say you have 100 people (for the sake of easy numbers), five days, and a hallway. In a good year, all 100 people are in the hallway every day, from morning to night. Makes it look like 500 people were there (100 x 5), but there really were only 100. Now…let’s say those same 100 people each cut their time in the hall to only two days. Still had all 100 people…just never saw them in the hall at one time. Some days, could have been as many as 80 of them there…other days, could have been as low as 20. Never all 100 in a single glance. Trying to gauge show attendance by traffic levels without factoring in frequency is flawed math. Badly flawed math.

It’s all cyclical, folks. Let’s use this economy to hone our skills and survive together.

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Numbers Nonsense

by Cinda Baxter on July 25, 2008

in Atlanta, Economy, Marts, Rant, shows

This is absurd.

The 30% tale has now ballooned to an eye-popping 40-50%, as stated by someone in a large, visible industry group (who shall remain nameless).

By NYIGF, I fully expect to hear that only seven buyers showed up in Atlanta all week. These rumors make the children’s game of “Telephone” look like an exercise in astrophysics.

Enough already.

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The Numbers Game

by Cinda Baxter on July 23, 2008

in Economy, Marts, Rant, shows

Prepare yourself. I’m about to climb on my soapbox.

We all know the economy’s tight. And we all know that a tight economy will have a negative impact on the gift industry. And we all know one of those negative impacts is lower attendance at the gift shows.

No shock there.

What is shocking, however, is the rampant rumor mill surrounding attendance at the Atlanta gift show last week. Granted, I’m partial to Atlanta as one of its Advisory Board members, but that doesn’t make me stupid. I’ve got it a bit more together than that.

Here’s where I climb up on my box, so buckle in.

A person (who shall remain nameless) told me Atlanta’s attendance was down 30%. I assured him that number was wildly (read: incomprehensibly, extraordinarily, over-the-moon-ily) inflated…which it was. Having attended last Monday’s meeting, I know the actual number, and folks, it ain’t even remotely close to this sky-high 30% stuff; attendance was significantly better than that.

As in double-digits-significantly.

What gets my goat, is that the same rumor found its way to Chicago in a mere six days, where it had grown to a whopping 30-40% drop. The person who told me (who shall also remain nameless) is someone of the highest moral character…the kind of guy who simply isn’t into rumors.

Needless to say, I nearly came out of my shoes.

Yes, marts and shows are competitive, and yes, many “fudge” on the numbers to gain a (perceived) advantage. But-—and this is a big but-—Atlanta is using hard data. They count the number of buyer badges printed on-site; they aren’t using eyeball estimates of how many people are in the hall or strolling through a showroom. They’re counting actual breathing, physically present bodies. Besides-—they’re audited on this stuff.

Face it-—with most buyers opting for shorter market trips these days, showrooms aren’t going to look like they did when everyone stormed the hallways all at once. Buyers are coming in shifts, which lessens bottlenecking, just like highway on-ramp meters do. No mystery there.

Also, they’re getting pickier about whose product to take a chance on this holiday season. If it’s a sure hit, they’re in. If it’s the least bit iffy, well…as Heidi Klum would say “Yow out.”

Folks, we have a choice to make. Either we get real about what’s going on in our industry, then adapt -or- we allow rumors to perpetuate a gloomier reality that we already have.

Of course, the latter will only make things worse, which is just plain ridiculous.

Some showrooms saw 30% drops in their traffic and their orders. Some showrooms saw 30% increases in their traffic and their orders. My bet is product and attitude have a lot more to do with which end of the numbers game someone’s on than attendance, regardless of where they’re showing.

So…whadaya say we all put our pointy sticks down and stop trying to poke holes in one another? Maybe, just maybe, we can float back to the top en masse when this thing passes.

There. End of rant. Thanks for listening.

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Deep breath time….

by Cinda Baxter on July 15, 2008

in Economy

Yes, the news is scary. According to a CBS/New York Times poll released today, Americans judged the economy this way:

Getting better…. 3 %
Getting worse….67 %

Like the retailers don’t already know that.

The reason I bring this up is to remind retailers of an important lesson we all learned as kids.

Thank back to first time you recall getting a shot at the doctor’s office. Odds are, you were scared silly about the idea of some guy in a stiff white jacket shoving what looked like a javelin-sized needle into your sweet little arm. And, odds are, your mom or dad looked you straight in the eye, calmly told you everything would be fine, then gave your hand a good, solid squeeze of support before you slammed your eyelids shut, bit down, held your breath, and counted on them being right.

My point, dear reader, is that that attitude of positive confidence is what sold you. If they said you’d be okay, well…you’d be okay. Period.

The same rule applies to how you approach customers right now. Yes, they’re scared; they feel the “sharp pointies” as much as you do. The difference is that they’re looking into your eyes, listening for your reassurances, seeking proof that their neighborhood haunts are safe havens where things remain solid and safe and familiar.

“Psychology is critical,” reminds CBS correspondent Anthony Mason, “because fear comes out of uncertainty. Psychology and confidence are critical.”

So as hard as it is…as scary as it might be…you’ve got to be the parent. You’ve got to look customers straight in the eye, smile with confidence, and tell them in a calm tone that everything is okay. Doesn’t matter if you believe the polar opposite or are jittering beneath that calm exterior. Give their hand a squeeze and convince them their world is solid. Make your store an island of “normal” and there’s a better than good chance yours is the one they’ll continue to visit, continue to shop in, and continue to spread the good word about.

Don’t give them that safe zone and they’ll run like rabbits faster than it would have taken you to bundle up your sleeping bag, fuzzy bear, and lucky nickle, headed to your best friend’s tree house.

Besides, maybe…just maybe…you’ll feel a little bit better too.

This psychology thing works both ways, after all.

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