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Tackling A New Year...With Wisdom

Saturday, January 3, 2009

Tackling A New Year...With Wisdom(GIFTBEAT)Yes, Virginia, your store is feeling the effects of a stalling economy. And it's likely you're worried about fourth-quarter sales. Nonetheless, there will still be a Christmas season--and a new year to come. So, what's a store owner to do? This month, Denny Nisch, national sales manager for Kansas-based Palmer Marketing Direct, addresses retailing, merchandising and planning strategies with contributing editor Sharon Bopp.

Q. In your opinion, should retailers revise their strategies to address today's poor economy?

A. It's such a tough year. Everybody's looking for some secret weapon, and I don't think there is one. People keep asking me, "What's the new rulebook for fourth-quarter 2008 and in 2009?" To me, the rules haven't changed, they've just intensified. [Store owners] who are doing the best are doubling up their efforts on what really are the same rulebook and techniques from last year. It's about effort in, effort out. If you work hard, you will probably be doing better. Retailers can be at different steps in the rulebook but they need to "ramp up" wherever they are. [For example], the person who hasn't been promoting better start promoting. Those who are promoting need to step it up and increase the promotions they're doing.

Have simple, easy-to-understand displays with one to three items per display. Nothing complicated or elaborate. Make sure signage is [done well] and is also simple and easy to understand. If customers are going down your store's main aisle, they should be able to look left and right and see that every display is made up of one to three items. These main-aisle displays should showcase the best of the best that your store has to offer.

When you go into a store, a lot of retailers feel that Christmas has to [take up] 100% of the front of the store, that that area has to shout Christmas. [At Palmer Marketing], we say that good, everyday product should share space in the front. It goes back to buying. If you bought correctly, Christmas and everyday items can share that front store space.

Remember that you want customers to have the mind-set that you have great everyday gifts available for them 365 days a year. That way, if a customer purchases a monogrammed product as a Christmas gift in December, the gift recipient may love it so much that they buy something similar in your store in January, February or March. Perceived value of the product that you're presenting has always been important but will become even more important´┐Żgoing forward.

Q. What steps can retailers take to help boost December sales?

A. December is the biggest [sales] month of the year. It represents 22% of your business. Anything you do on December 1 would have to be much more impactful than if done at another time of the year. If you're planning to build a display, build it on the quietest day [in December] and not on the busiest day. If common sense tells you that Saturday is the best day at your store, your best staffers had better be there. Store owners are trying to save money on scheduling. But December is not the month to be paranoid about correct scheduling. Because December is a 22% month and January is a 6% month, the productivity of a staffer's hour in December is worth almost four times the productivity of that same hour in January. Figure out how to scrimp in January, February and March!

Q. What merchandising techniques will help store owners grow their businesses in 2009?

A. You have to draw attention to some of your best finds from your gift show experiences. If you find a great diffuser at a great price and then don't draw attention to it through signage and display, that's a real shame.

Retailers should never order a vendor's fourth, fifth and sixth best sellers at the expense of ever being out of the vendor's first, second and third best-selling items. For example, if a candle vendor has two candle sizes and one sells better, the range of candle colors that a retailer selects should be equal to the popularity of the size.

Great-selling merchandise should take precedence over discontinued product in key areas of the store. It may be more advantageous for you to have sale product up front, but is that in the best interest of the customer? The customer will think, "Wow, this store has a bunch of old stuff," versus thinking, "They have items that I need in the front of the store." Show customers what they want!

Q. What aspects of their business should store owners focus on right now? A. Give your business 100%. Ask peers and vendors questions like "What's your best display?" and "What's your best product?" If you're not sure [about a retailing issue], seek advice. Seek out other people's successes and try to institute them within your store. If you went into a Bed Bath & Beyond and were really impressed that they gave you a $5-off coupon, ask yourself if you should do that in your store. Be aware of what's working around you and see if it's applicable to your business.

Also, customers want to know if a store they are shopping is family owned. Don't underestimate the value of conveying that idea in your advertising. For example, you might say "Family owned and a part of your community since 1953."

Remember to put yourself in your customers' mind-set and then walk around your store. Would customers be able to easily identify the three best-selling items in your store? Can customers identify an item's perceived value without turning it over to read the price tag? Do they feel a sense of excitement and warmth when they enter the store?

Q. Why does preplanning remain a key task for retailers?

A. Nothing gets a free ride this year [or next]. All aspects of running a retail operation have to be on all eight cylinders´┐Ż24/7. Store owners must think and act in smart ways. Analyze what you're doing so everything is optimal.

Preplanning is probably more important than ever. Before buying for 2009, be aware of the store space you have available and what your focus will be. You need to capitalize on those categories that exceeded expectations in the previous year and be willing to let go of categories that were disappointing sellers. Look around and see if you can find something new to add to your product mix, but make sure that your basics [i.e., strong sellers] are covered first.

Think about having a dinner party. Are you going to experiment with dessert or the main course? If you sell scrapbooking supplies, albums and refills are the main course. You need to have these key items totally covered. Trying to find a new main course [in retail] is not the thing to be doing now. If you burn the pot roast, who cares about dessert?

Note: Palmer Marketing can be reached at (800) 654-1511 or palmermarketing.com.

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