Tag: Sales

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Retailing in a Recession: Part Two

retailing in a recession

Although we aren’t in a recession, we want to give all retailers the tools to succeed if there is one. In part two of our series, we cover how customers can spend more in your store.

Recession Tip: Find the Needs-Offer Gap

A great way to retail in a recession is to get customers to spend more. Easy right? All you have to do is give them what they want. The challenge lies in figuring out what they want (and no, unfortunately it isn’t more of what you’re already selling). Enter the needs-offer gap.

To identify your needs-offer gap, you’ll need more than data. Unfortunately, data will only tell you what is selling, not what could be selling. However, if you do the work to identify your needs-offer gap your store will reap the benefits.

Take this example. A retailer was experiencing a decline in apparel sales. They could have limited the apparel they were offering and expanded their accessories and handbags (which were selling), but this would have led to over serving. Instead, the retailer looked at why their customers shopped elsewhere for apparel. They found out their customer base wanted “clothing for the right occasions, in the right styles, at the right price, and with the right fit.”

This led to the retailer evaluating their merchandise initiatives. By introducing new brands, offering more wear-to-work options, and expanding mix-and-match basics, the retailers saw their margins improve.

For more information on the needs-offer gap, check out rule number two in the Harvard Business Review’s Five Rules for Retailing in a Recession. And stay tuned next week to learn more on good versus bad costs in part three of our Retailing in a Recession series.

If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Sales Opportunity or Trap?

sales opportunity or trap?

Not every investment is a wise one, but that’s hard to remember when you’re fighting for a positive cash flow. Try the below exercise to find out if your next big idea is a sales opportunity or trap.

Step 1

Write the following at the top of a piece of paper:

  • Your vision for your business
  • Your 10-year business goal
  • Who you serve
  • What you sell

Step 2

Next, ask yourself the following questions. I find it helpful to write these on the left side of the same piece of paper:

  • How will my idea impact the business in the next 10 minutes?
  • How will my idea impact the business in the next 10 months?
  • How will this impact the business in the next 10 years?
  • Does it help me reach my vision in 10 minutes, 10 months, or 10 years?
  • Does this opportunity allow me to serve my customers in the next 10 minutes, 10 months, or 10 years?
  • Does it align with or complement what I sell?

Step 3

Now, think of your idea and run through each of these questions. If for each idea you can honestly answer yes, then it’s an opportunity. But if you have any doubt, forget about the idea—it’s a trap. If you run out of ideas, then it’s back to the drawing board. For more ideas, ask customers, employees, and even other stores for their thoughts.

On the other hand, if there are multiple ideas that work, then start with the one that will have the biggest impact in the next 10 minutes.

Inspiration for this post comes from “Opportunity or Trap” by Jacob Curtis, CPA, published in the February 2023 issue of Creative Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

If you still can’t get enough, register for the Creative Retailer LIVE Spring 2023 event May 2-4 in Pawhuska, Oklahoma for opportunities to learn from peers and network with industry professionals.

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Budgeting for Inventory

inventory budgeting

Are you spending money you don’t have for inventory? Continue reading to learn how to avoid this financial situation.

Budgeting

To avoid overspending set aside a portion of every sale in a separate account to be used specifically for inventory. If the account is empty, do not order inventory (even if a calendar reminder is telling you to do so). Once the account has money in it, the first thing to cover are orders placed but not yet paid.

To determine how much of each sale to set aside, check last year’s cost of physical goods. Then compare that as a percentage of your total sales. If you can’t find this information, anywhere from 40% to 45% is a good place to start.

Note, this account is for inventory only, not classes. As you use this system ensure the account has enough funds for basic products, as they are the backbone of your inventory.

Inventory Scheduling

Another piece of inventory is when the product arrives. The first thing to avoid is feast or famine, meaning you don’t want all of your product to arrive the same day. That means you won’t have anything new to stock your shelves with for the next three months.

To avoid this, inventory tracking is essential. Once you know how long it takes a product to ship, you have the option to contact the vendor to deliver when you need it. Most vendors are flexible on delivery dates after payment, as the sale is what matters most to them.

The other option is to cut your order. If you know the order isn’t arriving for two more months, take a look at the list and determine what you can do without.

Inspiration for this post came from The Not-So-Obvious Basics of Buying by Gwen Bortner published in the October 2022 issue of Creative Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Pandemic Profits

pandemic

It’s been 30 months since the pandemic began. How does your business stack up? If your business benefitted from the side-effects of stay-at-home mandates, know that an increase of sales doesn’t equate to an increase of profits. Read on to determine if your increase in sales actually equated to a better business operation.

Gross margin percentage

The first place to start is your gross margin. The gross margin is listed as a percentage on your income statement. Look back for every year back to 2018. How has it changed?

To determine why these changes occurred, go to profitsplus.org and use the free “logical profit and loss statement” calculator. Expenses are grouped by category including advertising, payroll, operating expenses, etc. Compare these expenses to your percentage of sales.

If the past 30 months really has made you a better business operator, your gross margin percentage should have remained the same or even increased since pre-pandemic years. Business owners who equate in increase in sales to an increase in profits aren’t seeing the full picture.

Pandemic prices

Another thing to keep in mind is the increase in product price. Do you increase price on the sales floor when new product comes in at a higher price? If you’re selling inventory based on what you paid, you might want to reconsider. Remember, your cost of operating has increased just as the cost of inventory has increased also.

Inspiration for this post came from “Growing Beyond the Pandemic” by Tom Shay published in the August 2022 issues of American Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Make the Most of Mannequins

mannequins

Did you know customers are more likely to notice mannequins than any other fixture in your store or window display? This is simply because mannequins look like them. Read on for six ways to dress a form to add to your store’s environment.

How to Dress Mannequins

  • Be dramatic: Think of items you can style on your form. The goal is to spark interest to products customer wouldn’t have otherwise thought of to increase sales. Pro tip: use items that are experiencing a sales slump!
  • Add-on: Consider adding surprise items, such as a button necklace, to your mannequin. This might entice shoppers to head to your lightly visited button area in the corner of your store.
  • Tell a story: Use your mannequin to tell a story about the product. It’s a much more effective way of connecting with customers compared to showing a slew of choices in a strewn-out manner.
  • Think light: Less is more. Try not to overdue props or supplies as the product should stand for itself.
  • Try marketing: Use your mannequin in social media. Consider adding a competition for followers to name the mannequin (where the winner gets a prize)!
  • Be intentional with color: Colors that highlight current trends (think Pantone’s Color of the Year) are a great way to show your signature style.

Inspiration for this post came from “Dress Them Up” by Anna Woodward published in the August 2022 issue of American Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Set Up Your Demonstration Station

demonstration

Showing is always better than telling. If you don’t have a demonstration station set up in your brick-and-mortar store, this is your sign.

Prep for your demonstration

Set aside an area to set up your demo. This should include a sewing machine (even if you don’t sell them) with tasteful and colorful fabric and matching thread in the bobbin (both upper and lower). You should, of course, have the thread and fabric as products in your store. Better yet—products the customer can’t purchase at big box retailers.

Also completed should be a sample with examples of what you’re about to demo. For instance, if you’re demonstrating appliqué your sample should display needle turn, satin stitch, decorative stitch edge, raw edge, embroidered appliqué, etc.

Execute

The customer has entered the store, you’ve greeted them, and they’ve asked for your help. Now what?

Simply ask if they have a moment to show how it works. Never make assumptions during the demonstration as to what knowledge the customer is bringing with them.

As you walk through each step of the demo, highlight the products you’re using and show the customer why they’re your favorite. Allow the customer to take a few stitches on the machine, showing the needle down feature and how the knee lift helps with accuracy.

Once finished, ask the customer if they have any questions. The more demos you give, the more objections you’ll learn to handle, and what responses work best.

Inspiration for this post came from “The Power of Demonstration” by Kay Brooks published in the April 2022 issue of American Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Optimize Your Website

websites

Businesses should leave an impression. These days, most first-impressions are made by websites. Read on to discover how you can optimize this essential online-tool.

Websites: Where to start

Making a website is just like making a quilt — it can be as simple or as complex as you want it to be.

The first place to start is by choosing a partner that understands your business. For example, some software providers have solutions for assembling kits, fractional yards and fat quarters that can integrate into inventory management processes.

These same software providers can also add other tools including classes and block of the month subscriptions.

Website goals

The next step is to decide what sort of goals you have for your website.

From the above, increasing productivity is an obvious goal. You can go one-step further and tie in back-end business systems to your site as well. Further, you can make changes in one place and it will automatically update your website and in-store system.

It goes without saying, but your website should also help in two large ways: increase sales and drive foot traffic. To accomplish both of these, you’ll need to inform customers of your products and services, as well as determine how each section of your website will increase revenue. We’ll touch on both of those next week.

Inspiration for this post came from “Increase Your Website’s Value” by Brad Tanner of Rain Retail Software and was published in the April 2022 issue of American Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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How Weather Affects Sales

weather

Spring has sprung and warm weather has come with it. Have you ever thought about how the weather affects your sales? Keep reading for insight on how the biggest force of nature affects your business.

Bad Weather Means Bad Business

Did you know that customers are three times more likely to complain on a rainy day? Additionally, the weather only has a 15% chance of being the same as the year prior – so it’s difficult to plan precisely.

So what does this mean? When it comes to staffing employees, think of where and when you need help. Foot traffic increases in brick-and-mortar stores during warm weather, so that’s where your staff should be. On the flip side, colder weather means more online sales. This means shipping costs increase and you’ll need employees to fulfill those orders.

Unfortunately, sales will never even out over time, just like the temperature changes year round. That’s why it’s important to have strategies in accordance with the shopping patterns of customers, while also remaining flexible enough to adjust to the weather.

Inspiration for this post came from “Weathering the Weather” published by Jacob Curtis, CPA in the February 2022 issue of American Quilt Retailer.

Next AQR Academy

Before we go, we want to remind you of the next AQR Academy workshop on April 12, 2022 from 9:00 – 10:30 a.m. CST. The theme is “Jazz Up Your Fabric Displays” where we’ll cover how to get more product noticed and entice customers to spend more time shopping! Register now and you will also receive a copy of Visual Merchandising 101: Making the Most of Your Store to download instantly.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Profit First Cash Management

profit first cash management

At the end of the day, profit is how we’re able to run a business. If at the end of the year, year after year, you’re unhappy with the profit you’re seeing, something has to change.

Enter profit first cash management. What does this mean? Essentially, Profit = Sales — Expenses. Simple right? What if we switched this equation around to account for human behavior. In other words, what if it looked like this:

Sales — Profit = Expenses.

Game changing, right?

What is Profit First?

What do we mean by profit first? Profit first teaches you to take the profit first then use the remainder to run the business. Essentially what we’re putting into practice the time-tested adage “pay yourself first.” The first step to get started is to complete the profit assessment, which you can find here.

If you’re beating yourself up for the numbers you see after completing the assessment, you’re not alone. Thankfully, this is just the starting point.

Open Your Accounts

Now that you know where your finances stand, it’s time to set up your bank accounts. The five foundational accounts include:

  • Income
  • Profit
  • Owner’s compensation
  • Tax
  • Operating expenses

And it’s recommended quilt shops should open an inventory purchases account also.

Another way to do this is to open a profit account, then transfer 1% of each sale into that account. If your business runs on $1000 / month, it can survive on $990 / month. Although this feels like nothing, you’ve started a habit that will grow month over month and change your business habits forever.

Inspiration for this post came from “Overcome Financial Stress” by Jacob Curtis published in the October 2021 issue of American Quilt Retailer.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

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Sales, Sales, Sales

Flash saleWith the close of small business Saturday and cyber Monday, hopefully your sales (both online and in store) exceeded your expectations. Have no fear if they didn’t; check out the below to see what you can do from now until January 1st.

  • Shoppers always want to think they’re getting a discount, so play into that. The two that work best for small businesses include the bundle sale and the two-fer sale. The two-fer sale sounds like it’s buy one get one free, but really it’s buy two items for one price. Since you know the bottom line, it’s easier to make sure you’re getting your profit.
  • Give something away for free. Food and drink go a long way around the holidays, so bake those Christmas cookies and stew up some hot chocolate because free means more customers.
  • Coupons, coupons, coupons. Send coupons via email to your customer base, and post coupon codes on your social media. To make your most loyal customers feel appreciated, send them an exclusive offer, whether that be an event or an even better sale. Don’t shy away from having online-only coupons too.
  • Going off the exclusivity, only stock your shelves with a couple items. When the customer grabs both, they’ll think it was a sign that they came in to shop that day. If you have an option to book appointments on your website, show limited availability. As those times fill up, open up others to make sure your schedule stays full. Being elusive is in.
  • Time is money. Since you’re already sending email blasts and being active on social media, post about certain deals that last only one day or even one hour. This sense of urgency will create the extra push some customers need to get off the couch and in your store.
  • Tis the season, some of these flash deals can have a charitable component to them. Spread holiday cheer by donating some of the proceeds to charity to celebrate the most wonderful time of the year.

Hopefully these tips will make you ready to enter the New Year with new goals and no regrets left in 2018.

If you’re looking for more information to guide you in owning a retail business, subscribe to American Quilt Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you.