Fresh Thinking For Uncertain Times

Inc.:

It’s no secret to anybody running a small or independent retailer that we’re operating in an unprecedented economic environment.

Right now, it feels like the only thing that we can be certain about is uncertainty.

Credit is extremely tight, and forecasting sales is like throwing a dart. The only bright spot is that gasoline prices have begun to descend from the stratosphere.

Most retailers are struggling on the top line right now. The only major national retailers who seem to be reporting increases are Wal-Mart, TJX and the warehouse clubs. For everybody else, the internal metrics are just about the same; weak traffic counts, conversion rates, average sale and units-per-transaction.

Here’s what I would recommend many small and independent retailers to consider. First, identify narrowly defined categories of merchandise that you can develop promotions around. Each offering must be meaningful and compelling. It might be a specific sub-category of merchandise, such as dresses, or silk flowers, or lamps (depending on the store’s particular retail niche), or it might be a specific vendor’s branded or designer line. The offering may also be driven by inventory levels, focusing in on categories or subcategories that are somewhat heavier than others.

Then, establish a promotional calendar, through the rest of this year and into the early part of next year, at least. Plan a promotion every two to three weeks, each lasting no more than two to three days, and running on the best sales days of the week.

Do not run the promotion longer than several days; if you do it tends to blur the distinction in your customers mind between promotional and non-promotional periods. Determine which grouping of goods would be most attractive for each promotion, and be sure that each promotion in turn is featuring distinctly different merchandise from the prior promotion.

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Photo by malko.

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