John is a veteran of the industry with more than 20 years experience on both the wholesale and retail side. “A man of great wisdom and advice” is what I would call him! He is also a very nice guy which a bonus.  After all these years, he still loves what he does, and it shows. Thanks for the contribution John! There is some great advice here, I hope it helps some of you; be sure to read it all the way through!

John Licata - VP of Sales, Stride Rite

  INDEPENDENT RETAIL – SURVIVING AND THRIVING IN 2009

With the current economy and with consumer confidence and spending down to levels we haven’t seen in decades, it’s critical for independent retailers to have a plan that they can put into action. Not everyone will survive this downturn, but those that are executing their plan will survive and perhaps even thrive in 2009.

CONTROLLING COSTS

Now is the time to analyze inventory levels, as well as order backlogs and make sure that what you have on hand and what’s on order is sale-able, efficient inventory. Running too lean will deter you from making and hopefully exceeding sales plan. Keeping inventory right on plan or down just slightly is the way to go. Utilize vendors that stock inventory by reordering your best selling items frequently. Make sure that past season inventory is marked down and promoted out as cash is king in 2009. Eliminate smaller, under-performing vendors. Now is not the time to increase your vendor matrix. Give your larger, more profitable vendors a larger piece of your business and in turn, ask them to give you even more support in helping to ensure your inventory is turning and profitable.

Watch payroll but make sure you’re not cutting hours for your very best people. Everyone is feeling uneasy right now and you don’t want your best people worried about losing hours and looking elsewhere for employment. Take care of your good people and cut hours elsewhere. Spending more hours in the store as an owner or manager will not only save money, but also help improve revenue.

Discuss your business dynamics with your landlord. If you can show the landlord that sales were down 10% in 2008, ask him for a 10% reduction in rent for 2009. That’s not unreasonable and vacancies are becoming more prevalent in centers across the country. If you can show your landlord on paper that your business is hurting and are reasonable with your requests, they’ll be more likely to work with you.

STORE OF CHOICE

In every community, there are lots of footwear choices for consumers. From department stores to family shoe stores to specialty stores to big box stores to athletic specialty stores to discount outlets. The key for any independent retailer is to do everything possible to become the store of choice in their community. This goes beyond carrying the right brands and offering good customer service. Here are some ideas on how you can make sure that your store is THE store of choice in your community:

1. Educate your customers EVERY TIME they walk into your store. Point out product knowledge tidbits from your various vendors when showing product, discuss the importance of wearing the proper size and why you measure feet, the fact that you carry widths for proper fit and that you have a shoe for every occasion. Customers need to be reminded that they shop your store for a reason and they can trust you and your staff to properly fit and meet their family’s footwear needs.

2. Engage your customers more than ever before. Now is not the time to discontinue or even scale back marketing efforts. That doesn’t mean you have to spend thousands of dollars on direct mail. Push email is the most effective form of advertising right now. If you’re not already collecting customer email addresses, start immediately. Let them know that you won’t share their email address with anyone and you will alert them to upcoming promotions and events. Many vendors provide seasonal push email templates that you can use for emailing and the return rate on push email is much higher than it is for direct mail. Use thank you cards. The personal touch that the thank you card offers is an old-fashioned tactic, but still carries lots of weight with customers. They’ll tell their friends about your great service. Again, a very inexpensive way to advertise your store and build loyalty. Call select customers a few days after their purchase to assure their satisfaction. Again, this shows them you care, builds loyalty, and motivates them to spread the word.

3. Plan events with your vendors to drive traffic into the store. Trunk shows can still be effective. Another idea that works well is to invite some of your best customers to view a vendor’s new product line with you and help you choose the best styles for the upcoming season. Everyone wants to be a shoe buyer and customers will be so excited and feel so special that you chose them to assist you in buying the line. Most vendors will be willing to come to your store early and even pay for coffee and muffins. Tell moms to feel free to bring the kids along and hand out some gifts for the kids or a few door prizes. Again, it’s innovative events like these that increase customer loyalty and motivate customers to spread the word.

4. Promote your store. You don’t need to be on sale every month of the year, but you do need to be aware of key times of year when it makes sense to promote. You should plan on at least three major events each year – BOGO sales or clearance events that drive traffic, sell-through, and spike sales. Remember, the key to 2009 is to raise cash and keep the inventory turning. You can’t afford to sit on inefficient inventory. If competitors are running events and the customer wants you to match price, oblige and make the sale. Now is not the time to turn customers away. Let them know you’re matching price because you value them as a customer; romance your store and all it has to offer and let them know you’d like them to become a regular customer of yours.

EMPOWER AND MOTIVATE YOUR PEOPLE

Involve your sales people in the goals and objectives of the business. Break your monthly goals into daily targets by salesperson. Post daily results on a board in the back stockroom. Run contests to spike competitiveness and create an atmosphere of fun. Make your people feel like they’re important and an integral part of the success of the business. Empower them to make decisions and give your customers the best possible customer service.

With all of the doom and gloom we’re bombarded with on TV, the internet, newspapers, radio, etc. it’s easy for us to feel negative about business and the future. It’s important to stay positive and especially for your people to see that attitude from you. Keep a positive outlook and involve your people in the business. Run contests and challenge them to get on the phone and invite customers to come in and see your new collections for the season. This positive attitude will not only rub off on your people but also on your customers.

Execute your plan – control costs, position your store as the store of choice, and involve and empower your most treasured resource, your people – this is what will separate the retailers that struggle to survive and those that not only survive, but thrive in 2009. 

John Licata

VP Sales

Stride Rite