Photo by Robtostes
I have to tell you something. I am feeling a little depressed. We’ve gotten dozens of phone calls in the pass few weeks for retail check ups. Some of these stores had been doing “ok” business but now find themselves overstocked and with no traffic.
I can’t stress enough how important the right location is! You can spend all the money in the world and have the best PR person but you cannot make people go out of their way to shop!
Maybe these stores got by (which you know is not what retail is about) but now…I don’t know what to tell them. Well, actually I do…move the location or close. But most of the stores really just need a little kick in the pants….no cry babies allowed. You can’t sit and wait for the customers to come in…you have to give them a reason to. Hear is SOME GOOD NEWS, people are shopping and they are shopping at full price!
The key is to have something different. You need to have items in the window that make people stop in there tracks and say WOW! Trust me, everyone will find a way to justify spending if you give them a reason. In the words of DV “give them what they didn’t know they wanted”.
Here are a few more key tips.
- 1. Suck it up and kill (markdown aggressively) goods you know are dead. Use that money to buy in season off price items you know are selling well. If you are not a resort store you have about 2 weeks to do this (before Memorial Day) because after that you won’t be able to give goods away. Think July as your vacation, inventory and clearance sale month.
- 2. Take a good look at your floor. Does it bring people in or is it cluttered with merchandise and decorative items? Track how people walk around in your store! Look for the “dead” zones and find ways of driving traffic there.
- 3. Set up some spy shopping in your store. Test out your sales team. Do some sales training…..sales is not something that you just learn, it really is an art.
- 4. Check your customer service….policies allowing returns only for store credit have to go! You need to be competitive.
- 5. Take the time to review every penny spent. You WILL lose your business in nickels and dimes. Check your credit card rates, cell phone service, and anything you think can be negotiated.
- 6. No every form of promotion cost an arm and a leg. Do thing different to get written about in your local paper. Do you have a my space page? A mini website? Do you send email blast?
- 7. Feeling overwhelmed? Call us for a retail check up. It’s an excellent return on your investment and the changes we implement will affect your business immediately.
For those of you thinking about opening a store….funny as it sounds, there probably hasn’t been a better time in the past 5 years! You will be able to find great locations in hot areas, you will be able to better negotiate rent and terms and you will be able to find excellent staff. I say go for it.
Studies have always shown that business that open during slow economic times do better than business that open during a boom. Why? Because they have better leverage in negotiations and that have to learn early to count every penny.
The trend in retailing is also all about the boutiques! Mall traffic is down and people just don’t want to shop in big boxes….it is all about the personal experience and having something different!
Have a question? Feel free to post a comment!
Right to the point! Thanks for the updates.
I am planning to open up a handbag boutique. I plan to carry high end handbags and accessories. My prices will start around $100 up to $8,000 for handbags. I am planning to carry exotic skin handbags. I am going to WSA show in late July 2008 and I am planning to attend the MICAM Shoe Event and MIPEL Bag Show in Milan in September 2008.
I have been in contact with the Italian Trade Commission and they have put me in contact with various vendors of high end bags. I am planning to put my boutique in Birmingham, Michigan which is a upscale walkable area with thriving shops and eateries.
I have over five years of retail experience in high end stores like Saks Fifth Avenue, Neiman Marcus.
And yes I have written a business plan with cost projections. How much should I spend on my stock for my store? I will carry some one of a kind handbags.
$100 to $8,000? I like the idea of good, better, best pricing but that’s a huge jump. I hope at the high-end you are going to have designer brands....which takes me to your first problem.
Designer will not sell you a line without at least having a concept book. Most don’t even want to sell new stores and they all have huge min’s. This brings me to your second problem. OTB. This is not a quick answer in a comment box. Our business of retail is NOT a fashion business it’s a business of numbers. And the OTB is key to staying in business. Here’s a quick very general guide and tips.
*Your opening inventory is going to be very different than your maintained.
*You need to figure out what your (worst case) over head is so you can set sales projections.
* A good rule to follow is a stock to sales ratio of 3 to 1.
* It’s also a good idea to plan your margin builders now. With the designers lines you need to keep a MSRP and it’s just too easy to Google apples to apples. You start looking for secondary brands that you can “jack” up a little more.
One happy note....bags and in general accessories stores are doing very well.
Best of luck....keep us posted. Oh, skip the trip to Italy this season...the prices are insane
for sure i can say that people get soooo wrapped up in the fashion (which is great and that is where there is a lot of passion) but there has to be balance for what will open your doors in the morning & that is the financial side. you have to be as comfortable with inv. turn, P/L stmts and B/S as much as you are spotting new fashion trends.
ask vera wang what her margins are on her wedding, ready-to-wear, lingerie, or home fashions lines and i’m sure she can rattle them off as well fast as she can tell you what the hot trend will be for spring and how she is inflencing those trends. i’m sure she has a great relationship with her CFO as well as her in-house designers. i’m saying be able to talk the language of both those folks to really make it.