A friend of mine sent me a link to this post the other day. It not only offers hope for brick and mortar stores, but some good advice as well!
Absolutely! There is hope for the concept in general and for many stores that exist today.
However, there is also no question that competition from online retailers is presenting challenges and that store owners are going to have to adapt in order to survive.
Is adding an online store of your own the answer? Not necessarily. If you can't compete on price for the same products that are already available online, then don't even try. In my opinion, selling online only makes sense if you sell unique items or if you have a captive market. That said, you should definitely have a website that makes shoppers want to come to your store and you should definitely sell gift cards on that site to drive traffic your way.
You also need a facebook page where you post at least weekly and respond to every comment within a day. Otherwise, it will detract from your image rather than enhance it.
Back at the store, you need to carry products that can't be easily purchased online or that people want to touch and feel before they buy. Great examples of this are plants, clothing, bath soaps, and unique types of gifts. In other words, you have to give customers a compelling reason to come to your store to shop instead of purchasing online or going to a different brick and mortar store. That doesn't mean that you can't also sell items readily available online; it is just that those items won't bring people into your store. Customers won't come to your store just because they like you, either, although that is helpful!
So, yes, it does take more than location, location, location to succeed as a brick and mortar store today, but success is definitely possible if you are willing to adapt.
Last week I wrote about the importance of the customer experience within your store. It is also important to make it easy to get to your store.
That means, first of all, that you have to be located near your customers or near an area where your customers are likely to shop.
In addition, you need to have plenty of parking and your parking lot needs to be easily accessible from all directions. There is a grocery store in my neighborhood that is only accessible via the northbound lanes of a busy street. The only exit is via the northbound lanes, too. So, it is really only convenient to go to this store if you are traveling north. Think of how much business they are losing because of this!
Easy customer access is even more important if you are competing with online stores for sales. Your customers already have to go to the extra trouble of getting dressed and leaving their comfortable homes to come and visit you. Don't make it any harder on them by putting up barriers to access. :)
With all of the competition from the internet, it is more important than ever for brick and mortar stores to make sure the customer experience is exceptional. The cashier/register clerk/counter person is typically the last person your customers see when they leave your store, so it is important that he/she leaves a good lasting impression.
I saw the perfect counter person in my bakery a few weeks ago. (I haven't seen her in a while so I suspect she has gone back to school.) Here is why I thought she was so great: She was friendly, helpful, polite, cheerful, and efficient. She also seemed genuinely glad to see the customers that came in the store.
I encourage you to make sure your staff is leaving your customers with a good impression. It is a relatively inexpensive way to keep those customers coming back.
Our company is 35 years old today!
Thank you to all of our wonderful customers and employees - both past and present - who have made this possible. We couldn't have done it without you!
I recently read a great book on leadership, called The Magic Cup, by Howard Behar. There are several things I like about it. First, it is a story; not an instruction manual. Better yet, it is a very entertaining story and easy to read. What I liked best, though, was that I could really relate to the thoughts and emotions of this leader throughout the story. I think any well-meaning leader will feel both validated and inspired after reading this book. I highly recommend it!
Knowing what to stock in your store is a matter of personal taste and having a "feel" for your customers. It is more of an art than a science. The same is not true, however, when it comes to how much to stock in your store. That needs to be based on historical data, when possible, and a bit of restraint when it is not possible.
For example, let's say you sell ten non-seasonal widgets a month and that all ten fill an area of about six cubic feet. Now, let's say your vendor is offering a promotion of 5% off, if you order 100 of these widgets and take delivery now. Before you say "yes" to this deal, you need to figure out if the 5% makes up for the cost of storing the extra 90 items. You also need to make sure that this deal won't tie up cash that you would rather spend on something else. I had this point hammered home myself just yesterday when I found a 500-count box of 6x9 envelopes. I admit that I probably approved that order, but I clearly wasn't paying attention, because we probably use less than 15 of these a year! So, no matter how good of a deal we got, it was a poor use of cash flow—and the box has been taking up precious shelf space for months.
Seasonal items are more difficult because they change every year and you have a small window in which to sell them. Before you place an order for seasonal items, look at how similar types of items sold last season and what sizes sold best. Place as small of an order as you can unless you know in your heart that it is a winner. You hate to be in a situation where you are missing out on sales because you've run out of stock, but that is better than having to discount merchandise below cost to get rid of it.
Many retailers believe that the cost of an item of inventory is the cost of that line item on the invoice. Typically, that is only part of the story.
For instance, that invoice may include freight and/or discounts. When that freight involves inventory, it should be prorated and included in the cost of the inventory, rather than treated as an overhead expense. And, as much as you might like to think of your trade and promotional vendor discounts as bonuses, they, too, need to be applied to the cost of your inventory in order to arrive at a true valuation.
In addition to the inventory cost described above, all of your inventory also has a "carrying" cost. That is a little more difficult to measure and includes the following:
There is one other potential discount that I have not mentioned and that is the discount you receive for prompt payment of your invoices. Depending on how you account for this, it may or may not be included in your inventory cost. If it isn't, then be sure to include it as an offset to your carrying costs.
Why is it important for you to know the real cost of your inventory? For one thing, it is information you need to know when establishing selling prices for your merchandise—or deciding if a product is even worth offering. For another, it is an important consideration when determining how much inventory to order.
If you are like most retailers, you are very careful about recording the stock that you receive and the inventory that you sell. But, how careful are you about recording other types of inventory movement? For instance, do you keep track of:
If you think these transactions involve quantities that are too small to worry about, you might want to think again. For one thing, you probably need the money/inventory from returned goods much more than your vendor does. For another, you might find that you are donating more items than you can afford, or that you need to do a better job of buying. Also, if you don't know how much of your inventory is missing as a result of valid transactions, you will have no way of knowing how much is due to other causes, such as outright theft.
Knowing where those missing bits and pieces are going is the first step in reducing shrinkage—not only of your inventory but also of your bottom line.
All retailers know they are supposed to "control" their inventory, but that means different things to different people. According to Merriam-Webster, the definition of Inventory Control is:
"Coordination and supervision of the supply, storage, distribution, and recording of materials to maintain quantities adequate for current needs without excessive oversupply or loss."
This definition might seem obvious but the devil is in the details, as they say. For example, what does "supervision" really mean? What needs to be recorded besides purchases and sales? When is oversupply considered excessive?
Inventory control is one of those areas where minor adjustments can have a huge impact on profitability. So, over the next few weeks, I'll explore some of the less-obvious aspects of inventory control and also provide tips on how to handle the more obvious aspects more efficiently.