Are you a proactive or reactive retailer?

proactive

Here are ten questions that will help you make that determination!

  1. Are you open to new technologies that will help you better connect to your customers?
  2. Have you taken the necessary steps to be EMV complaint by October 1st. 2105?
  3. Do you collect customer purchase data?
  4. Do you personalize offerings to customers using their purchase data?
  5. Do you review your credit card processing costs every year?  You understand your rate is not the sole factor when analyzing your total cost.
  6. Do you review these numbers every month: Year over year sales, gross margin by department, average transaction, number of item per transaction, number of transactions?
  7. Do you hold a weekly meeting with your staff to review problems that they encountered and discuss best practices to resolve those problems in the future?
  8. Do you have a social media presence for your business and respond to both positive and negative feedback?
  9. Do you review your website analytics monthly and explore options for improving your SEO (Search Engine Optimization)
  10. Do your review all variable expenses at least twice a year

Bonus question:

  1. Can you name three strengths of your business that distinguish you from your competitors?

The minimum wage debate in retail, a practical solution!

The debate is on, what effect will the increase in the minimum wage have on independent retailers? Some states and even some cities have taken it upon themselves to mandate the new minimum wage at between $12.50- $15.00 an hour to be phased in over the new few years. Wall-Mart has announced it will increase their minimum but not to the$15 level. The main issues central to the debate are how will these increases effect store profits and will there a net negative effect on retail employment. We don’t a lot of data to reference but both Costco and Trader Joe’s have consistently paid above the minimum wage scale and maintained their profitability. Costco has been a model of worker productivity resulting in greater profitability. One of the factors for this is certainly their compensation plan. Economics 101 tells me that when a minimum wage worker receives a $2 or $3 per hour increase 100% of that goes back into the economy as retail spending, the prime driver of our economy. The issue has been become political fodder with no real substantive debate. I have a simple and pragmatic solution. Tie the minimum wage to the CPI and adjust it yearly the same way Social Security benefits are adjusted. This approach accomplishes a couple of things: It takes the issues out of the political arena, and the incremental adjustments become manageable for retailers to absorb. My closing thought is a few years ago congress decided to avoid the political debate over their salary increases and make them automatic, so they do understand the concept of how depoliticize an issue.

Six things you should know about EMV compliance and the liability shift!

October 15 of this year is the target date for retailers to implement the new EMV credit card standard. Retailers are not mandated to have the new technology in place, and in fact it is estimated that over 50% of small (under 1million in annual sales) will opt not to be complaint. Their feeling is that they are small and will not be targeted by hackers. This is high risk stance considering the potential penalties and charge backs based on the EMV liability shift. Here are 6 things you should know about the Liability Shift.

  1. Banks will no longer be the only party liable for the cost of fraudulent activity.
  2. Liability will fall to the least compliant party
  3. A non-complaint retailer still using swipe and signature would be liable if loses resulting in their inability to process chip and pin cards
  4. The bank or processor would be the responsible for fraudulent activity for retailers who can process chip and pin transactions
  5. Retailers who have chip and pin technology in place can also process contactless payment options ( NFC, Apple Pay)
  6. Retailer who cannot process the new chip and pin credit cards will be viewed by customers as less secure

R.E.T.A.I.L (2)

R: Remember why you started your business and reconfirm it as your guiding principle

E: E-Commerce is growing at a rate of 4-5% annually which is greater than in stores sales. If you not meeting that growth maybe you site needs an upgrade

T: Trust your instincts. Retail has become a data driven business but don’t ignore your gut.

A: Adapt to survive. Retail has become a quickly evolving landscape. You don’t have to embrace every new technology but you need to be aware of them and implement those that fit your business model.

I: Interaction, every customer interaction with a customer either strengthens or diminishes your relationship with that customer.

L: Losing customers is evitable but if you lose a good customer take the time to find out why.

Another retail initiative that’s a race t the bottom!

Nordstrom’s just announced they are launching a curbside pickup at twenty of their stores. Nordstrom’s has been at the forefront of omni –channel fulfillment. The new initiative is another step toward providing the ultimate convenience to shoppers. One of the basic concepts of retail is to get people into the store to maximize their spending potential. The omni –channel strategy makes sense, buy on line or at any store and pick up your merchandise at the most convenient location. The curb side pickup is counter intuitive to the whole concept of retail. The convenience factor may initially be thought of as an attempt to cater to the busy consumer, but if their successful and it grows there may be unintended consequences.

Retailers are still trying to figure how to wean shoppers off the price promotion game they created about ten years to spark holiday sales. They kept one upping each other by offering greater discounts. Margins have taken a beating, but its slow process reversing consumer behavior that the retailers created. Curb side pick could another one of those good ideas that has the unintended result of keeping shoppers out of stores.

Retail is all about –R-E-S-P-E-C-T!

R: Recent data is the most relevant data to use when analyzing both customers and inventory.

E: Everybody’s voice counts. Listen to any feedback from customers and employees. Good or bad it’s all valuable.

S: Sales are old school retail. Promotions are more effective in moving inventory and creating incremental sales.

P: Personalize your customer marketing by using customers purchase history.

E: Embrace: There are new technologies that help you engage more actively with your customers both in-store and through social media. Don’t ignore them. If you’re not engaging with your customers your competition is.

C: Consolidate all your customer purchase data into one silo, whether they shop on-line or in your store. A single view of all a customer’s activity is essential when designing marketing campaigns.

T: Trail and error is the key. Track the results of all your promotions and campaigns. If it works refine and make it better. If it doesn’t work, scrap it.

Respect is the Key

The Omni channel challenge!

Omni channel has become the new hot topic in retail. The concept is to allow the customer to buy in-store or online and choose if they want their purchase delivered or to pick it up at any store location. The primary challenge that must be dealt with is dealing with the internal logistics of moving product between locations. The basic principles to maximize inventory are: The right inventory, at the right time and the right price. It sounds so simple but the execution is what separates the average retailer from the great retailer. Omni channel adds another dimension to the equation, that of having the right product in the “right place”. The mobile enabled consumer is demanding more options when they buy. Meeting those demands requires some well thought out planning. It’s better to delay initiating an omni-channel strategy until you can meet the customer’s expectation.

Omni- Channel, think before you leap!

Omni-channel is the hot topic this year. The concept is simple enough, allow a customer to buy online or at any store and have it shipped or pick up at any store. Amazon is partnering with local pick up locations for next day pick up or in some cases the same day and announced today that they expanding one hour delivery for certain products to one hour. In this day of the mobile consumer they want to be able to choose the most convenient option for getting their purchase. This also opens up another potential problem in meeting customer expectations. Before you leap into the multi-channel arena make sure you have the infrastructure and POS software in place to meet customer’s expectations. Here are five questions to consider:

  1. If they order on line will your E-commerce software allow the customer to have it shipped or select a store location to pick up their purchase?
  2. Will your E-commerce system allow you to select a store to fulfill the shipment if your warehouse is out of stock on the item?
  3. Will your system show which store location is best stocked to fulfill the order?
  4. Will your system allow you to transfer the item to the store location the customer has selected to pick up the item?
  5. Does your system provide an audit trail of the transaction to ensure that it was successfully completed?

Before you venture into any new way to fulfill and meet customer’s expectations give careful consideration to how your system will allow you to process the transaction. It’s critical that you deliver as advertised before venturing into Omni –Channel sales.

It’s a thin line, or is it?

Five things retail should do to avoid having their marketing message becoming background noise:

At first consumers were reluctant to give retailers their contact information but this has slowly eroded once there was a quid pro quo. You can have my email address if there’s a benefit to me. This started the progression from collecting data to loyalty programs to full blown CRM. Customer data became a valuable commodity to retailers who understood how to use it to grow their business. Amazon became the model for using data to suggest other items – Collaborative marketing: People who read this book also liked these books. The question was always how much is too much in this new age of digital marketing. The question is at what point does the consumer stop paying attention to the continual barrage of offers? We’re now entering into a phase of digital marketing driven by Near Field Communication (NFC). Once a customer opts in location based technology alerts the retailer when a customer is in the store. This opens up a new world of marketing opportunities to the hyper connected consumer. Offers and coupons can be sent to their smart phone while there in the store. When you add the marketing power of social media to the mix the connected consumer becomes empowered to become an integral piece of the marketing landscape. The business to consumer dynamic has become a total 360 degree circle. The dilemma for retailers is to keep their offers and messages relevant to their customers.

These are five things retail should do to avoid their marketing message becoming background noise:

  1. Keep your offers salient based on the customer’s purchase history
  2. Develop marketing campaigns that will promote up selling and cross selling
  3. Measure the results of each campaign
  4. Refine and repeat successful campaigns
  5. Less is more. Run fewer more targeted campaigns that have specific measurable goals.

Shiny new software, look before you leap!

The credit card compliance issue has forced many retailers to consider upgrading or replacing their POS software. If it’s been a while since they looked at new software their seeing systems that offer a wide range of new features and modules. Their seeing more robust reporting capabilities, advanced CRM and customer loyalty, Omni-channel, buy it online or at any store and have it shipped or pick it up at any store.   In addition slick new mobile POS options, advanced promotion management and integrated open to buy to name new a few of the new features. The process can be a bit overwhelming unless you develop a realistic plan. Here are five key things to consider when thinking about a new system with all these advanced features.

  1. Which of these new features is relevant to your business?
  2. Which of these new features can you realistically implement?
  3. Do you have the internal resources to manage the execution and implementation of these new features?
  4. Develop a priority list focusing on the features that will provide the best return on investment for you r business.
  5. Develop a detailed timeline assigning tasks and benchmarks to specific people to monitor the phase in of each phase of the implementation.

The shiny new software is only worth the investment if you have a plan to utilize and get a return of your investment.

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