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Retail Advice During Economic Crisis
Posted: November 7, 2008
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Keep an eye on your credit. If you are a small retailer, you probably use a credit line to get you through different periods, or you occasionally need a small business loan. You may believe that banks have all but shut off the credit they are willing to give to small businesses these days, but the truth is, if you have a good credit score, collateral, and income, you can still qualify. So make sure you're doing everything you can to protect your credit. Pay your bills on time, cut expenses to save as much money as possible, and if you are going to be late on a payment, let the company or bank know in advance.
Perform an inventory overhaul. Your inventory is your single biggest investment. In many cases, it's what defines you. The flow of merchandise in and out of your inventory determines your success. You should be evaluating your inventory at least every other week in the best of times—and during slow economic times, once a week is probably best. "You need to know what you have that isn't selling, and you need to know if you've overbought a certain item," points out Segel. "Look at your inventory level in dollars as opposed to unit count, and then look at sales, what merchandise you have received, and what is on order. Make sure you have enough inventory to generate the sales you're projecting."
Ramp up your e-commerce marketing efforts. You may be tightening up your marketing budget, but that doesn't mean you have to do less marketing. There have never been more no- and low-cost marketing opportunities available than there are right now. If you are not taking advantage of these tools, then you need to start. Here are a few options that will cost you next to nothing but can bring in tons of people to your spa:
- Create an e-zine or e-newsletter that goes out to your customers and informs them of what's new in the spa and provides them with exclusive specials or price offerings. Provide an option that allows them to sign up their friends or family members for the e-zine or e-newsletter.
- Use e-mail marketing to send short, targeted messages to your mailing list. E-mail marketing is a great way to inform your customers about upcoming sales and store events.
- Re-evaluate your Web site. Make sure it is easy to navigate and always up-to-date. If you have an online store, make sure it is easy to use. Always provide a "Contact Us" option that allows online customers who aren't in your area a way to easily get in touch with you to make an order.
Pump your vendors for information. Small business owners are usually trapped in their stores. That means you may not have a good feel for what your competition is doing or what hot products are emerging. Let your vendors be your eyes and ears in these areas. They go to tons of different spas in different locations every day. Ask them what stores like yours are ordering and if they've noticed any products you aren't currently selling getting hot with consumers. Ask them what prices your competition is putting on their merchandise. Find out if they've seen any unique marketing efforts from any other stores.
Conduct a "signage audit." Retail signage is one of the least appreciated and most effective forms of brand-building and brand recognition. It enhances the shopping experience and sells more goods than any other tool available today. And it can be a difference maker in a slow economy when customers are choosing between your store and someone else's. "The key is knowing what types of signs to use, when to use them, and how many are too many or too few," says Segel. "Take a look at how many signs you are using. To determine if you are informing, selling, educating, entertaining, and creating an emotional connection with your customers through signage, include a question about it in your customer surveys and focus groups. Find out how customers are really reacting to your signs. Can they recall what your signs even look like? Or were they compelled to check you out because of a specific sign? All of this will help you pinpoint what really works to bring people into your store and what doesn't."