My shops are staffed by good managers but in this economy I fear we won”™t have enough walk-in traffic to maintain sales. My managers need to be playing a stronger role, but I”™m not even sure if it”™s selling or marketing we need. Your thoughts?
Many retail operations get stuck when walk-in traffic declines. That doesn”™t mean the business has to roll over and die. When the going gets tough ”¦
Let”™s take a look at some facts and then we”™ll talk about the role of shop managers. We”™ll finish by looking at a variety of sales and marketing efforts this company can deploy to improve its chances for success.
Bad news/good news
In September, retail sales were down twice as much as predicted. The trend continued in October and November, in medium-price, low-price, discount and luxury stores. Problems are impacting retail businesses of all sizes. Investment failures, declines in housing values and job losses are hitting every sector, including the formerly well-heeled, retirees, hourly and salaried workers, blue-, white- and no-collar.
While the unemployment rate has climbed from 5 to 6.8 percent nationally over the year, in non-farm jobs we still have some 1 million more people employed than at the end of 2005 (roughly 136 million now vs. 135 million in 2005), according to the Bureau of Labor Statistics report of Dec. 5, 2008. While consumption dropped, personal income increased between September and November. Savings increased as well.
What does this mean? A lot of people have jobs. They are putting money aside to get their finances in order. And they do have money to spend, they”™re just being more careful about what they spend it on, and when. Discretionary spending may be down, but it”™s not gone, just more competitive. And most small businesses don”™t have a predominate share of the market in which they operate. They are small enough that it”™s a matter of competing better in order to get more share, rather than having exceeded their potential to grow.
Roles to play
Many retail managers make the mistake of thinking of themselves as caretakers ”“ responsible for helping customers who walk in, asking for help. They excel at knowing their products. They sometimes shy away from closing a sale, not wanting to “pressure” a customer. They may let a buyer walk out because they don”™t have exactly what he wants, rather than making a deal to understand and solve his need on the spot. They may think that if the customer is really interested he will return, without realizing that when the customer walks out the door other competitive opportunities may get in the way of him returning. These behaviors have to change.
When the customer walks in the door, the shop manager has one opportunity to solve that customer”™s need. It”™s time to hustle ”“ efficiently and politely ”“ and get the sale transacted. If the customer has questions, answer them. If the customer is “just looking around,” find out what he”™s looking for. If the customer isn”™t sure, find out about any deadline he”™s on, budget needs and what kinds of things he likes. Then get his e-mail address to send him information matched to his needs.
Marketing techniques
Marketing is how you get more traffic to walk in the door. There are all kinds of efforts you can explore.
First, know your customer. Who buys from you and why? What kind of needs are they trying to solve? Are they new in town? Shopping for gifts or personal needs? Young, middle-aged or old? Single, married, with or without children?
These demographics help you figure out where to find your target customer. Middle-aged customers with children probably are involved in local school activities and will find your message if you sponsor school events. Newcomers can be found through new resident records. Seniors are often well established in their communities and are likely to get information from peers as referral sources.
Figure out how to get your target customer into the store. Get your shop managers involved. Ask them to network with other shop managers in the area to put on community events that draw traffic. Perhaps they can partner with another store that has a complementary product or service, to offer each other”™s customers coupons. Build in-store promotions by offering customers referral rewards. Team up with another store to sponsor a local sports team. Call five customers a day to leave a voicemail making them aware of new items in the store. Entice customers who haven”™t been by in a while with a time-sensitive coupon. Increase average buy with add-on promotions. The list is really endless.
The point is, it”™s not just your job as owner to solve the problem. Your shop managers and staff depend on sales to keep their jobs. Ultimately if they can”™t get enough sales going, you”™ll have to close the shop.
Andi Gray is president of Strategy Leaders Inc. of Chappaqua, a business consulting firm that specializes in helping entrepreneurial firms grow. Questions may be e-mailed to her at AskAndi@StrategyLeaders.com
