Seven days that will save your store

I read an article on the Glee newswire that really resonated, discussing trends in the hardware business—a market segment eerily similar to the gift industry (Glee, for those of you unfamiliar with the British shows, is the annual equivalent of our NSS, instead focused on garden, pet, and outdoor life products). Zeroing in on consumer motivation and big box competition, the article makes it clear—the keys to survival for independent retailers are necessity, communication, and information.

Based on comments made in the piece, here’s my suggested strategy for survival in this crazy, topsy-turvey business climate-—all of which can be accomplished in one week:

Necessity: Identify your new 20

Excerpt: “So, with little hope of a boom in home makeovers on the horizon, retailers need to know what this new consumer wants. However, the issue is no longer what the consumer wants; it is what the consumer needs.”

The 80/20 rule holds as true today as it did yesterday—80% of your revenue is likely coming from only 20% of your inventory. The key to success is identifying that top 20, then continually keeping it in stock. Odds are good, however, that your top 20 may have shifted a bit in the past six months, maybe as recently as in the past four, as consumers tighten their belts and redefine “necessary.” If you’re using a POS system, start reviewing numbers now; if you do manual inventory, look at your reorders for the past six months to locate the break in pattern. Then, stock up. There’s never been a time when that top 20 was more important. Truth be told, it might be responsible for a lot more than 80% of your revenue if the rest of your inventory is truly “optional” in the eyes of your customers.

.Communication: Talk to your peers

Excerpt: ”How can [small businesses] compete? [Retailer Vin] Vara once again says the answer lies in communication, this time between independent retailers themselves; through groups and trade associations. To illustrate this point he holds up a pencil and snaps it effortlessly in half. However, when he grabs a bunch, they stay intact.”

Shared experience, ideas, and sources give you an edge over larger chains and franchises…and an even greater advantage against online retailers, typically lone islands on a technological sea. Obviously, you’re a sharp cookie if you’ve managed to make it this far, but no one retailer has all the answers. Find a group or association that fits your particular needs—then join. In my biased opinion, the best one is RetailSpeaks ($40.00/year) since membership includes territory protection preventing your competitors from listening in; additional options include Giftbeat’s message board for their newsletter subscribers—retailers, vendors, and reps ($149.00/12 issues); or any one of a number of open forums that require only a tax ID for admission.

.Information: Train—then quiz—your staff

Excerpt: “‘I still think shopping must be fun,’ [European DIY Retail Association executive John] Herbert reminds us. Retailers still need to get consumers excited about innovative products and be in a position to tell consumers that they need those products.”

Independents have the upper hand in knowing their products better than chains who carry 15,000 SKUs…as long as the staff is on the same page. As the buyer, there’s little question you know the lines, the logic, and the companies behind them, but have you transmitted that information to your employees? Can they accurately explain why item A is better than item B, or tell the story about how and why it was created? Are they able to romance the product in a way that makes a consumer fall in love and buy it? With the right information, employees can make the difference between “Just looking” and “That’s perfect!” Without the right info, though, they help brand your store as another ho-hum-no-big-deal outlet.

.

You can cover these three bases in one week with a little bit of effort—find your top 20%, join an online retail community, and sell your employees on the product you carry. Could be the smartest week you invest all year. Could be what saves your store for the rest of it.

Note: Prices for RetailSpeaks and Giftbeat are current as of the date of this post, but are obviously subject to change.