MY DOORS ARE OPEN and I survived the summer…NOW WHAT??
Now that summer is over, I’ve been chatting with specialty retailers across the nation on ways to boost profits, manage inventory & orders, keep customers coming through the doors and much more, as we head into 4th quarter.
With uncertain consumer spending, retail closures, bankruptcies & job losses, and a consumer who wants an engaging retail experience along with quality, value and competitive pricing, the savvy specialty retailer will be looking ahead to see where all of these factors will lead 1, 3, or even 5 years from now.
Consider the following questions as you strategize and plan–“how have my customers changed over the past 6 months, and what can I learn from it?”, “what products might my customers be interested in that I am not currently stocking”, and “how can I improve their customer experience when they walk into my store”.
Here are some areas that, I believe, require focus and commitment in the months ahead:
1) Manage orders & inventory levels to maximize sales of high margin items & private label/shop-logo goods
Many shops this summer were selling record numbers of surfboards, skateboards, accessories and more, often causing shortages and lost sales. Meanwhile, sales of high margin soft goods overall were down, compared to prior summers. While such hard good sales boost monthly numbers quickly, their low margins are usually below the cost of doing business, thus jeopardizing true profitability.
NOW is the time to focus and prioritize on high profit, high margin items such as t-shirts, sweatshirts, hats, some accessories and certainly your shop-logo/private label items.
a) Display and merchandise high margin items in the front of the store and near the counter
b) Feature shop-logo products and top-selling items on the home page of the shop’s website
c) Use private label items as a “special”, gift-with-purchase or purchase-with-purchase to help boost sales, as add-on sales or to help move slow-moving items
d) Have a “shop special”—i.e. buy over $50.00 in product, get shop t-shirt for $5.00
e) Offer gift cards/gift certificates at all times; display prominently throughout the store and on website
2) Thorough review of costs and expenses that are reducing NET profit
As I’ve discussed in prior Surf Expo seminars, NET profit is the money that ends up in your pocket at the end of the year for all of the hard work! We all know that the margins on surfboards, wetsuits and skateboards in particular are lower than the costs of doing business. If you want to be profitable by the end of the year, it’s time to fine-tune costs and expenses wherever possible.
a) Meet with your landlord and review & re-negotiate your lease/rental agreement
b) Closely monitor “bro” deals, discounts, giveaways and donations
While these are important to keeping customers loyal, they must be tallied and accounted for each month in a budget (usually as a percentage of sales). To me, these should be filed under advertising, marketing or promotion. MOST retailers do not track such discounts and are surprised when they start to monitor them—trust me, these add up quickly!
c) Watch employee overtime hours
d) Send back returns, defective items to your vendors—yes, they’re piled up in a box somewhere!
3) Constantly fine-tune your website to ensure that it’s efficient and easy to negotiate
Online/e-commerce demand will continue to increase and be an important element for growing sales, providing information, communicating to new and existing customers and much more.
a) Check to ensure that all store information is accurate and up-to-date. Make sure that hours, Google maps, product links, photo downloads and more are correct and smoothly working. Add new photos, change color scheme, update blog or videos
b) BOPIS (buy online, pick-up in store) is a real concept and should be a streamlined, efficient piece of today’s new business model…in addition to in-store and online sales
c) Put top-selling, high margin & private label products on the FIRST page of the website. I’m shocked at how many sites have their high margin, brand building shop-logo products buried on the last page (after the less-profitable branded products)
d) With the growing use of mobile devices/smartphones for product & price information, shop hours & direction, and most importantly, online orders, consider flexible payment programs such as AfterPay, Affirm or Klarna
4) Keep your customers “loyal”
As we all know, there are many, many choices for today’s consumer to get surf & skate products. If a customer has walked through your door once, it is your job as a retailer to keep them coming back. If you don’t ask them to come back OR give them a reason to come back…they won’t!
a) Make it a top priority for all employees to sign customers onto the mailing list. Giving a free shop t-shirt or discount gift card to any customer who signs up for your mailing list will be money well-spent in the long run. Encourage the “shop local, support local” theme!
b) Give shop stickers away to EVERY customer, and with every purchase—the cost of these is low but the marketing value and long-term visibility is high. Stickers should be high quality, 4ml vinyl with UV/fade-resistant inks—don’t use those cheap ones!
c) Communicate regularly to your customers regarding new products, special events, surf schools, lessons, rentals, demos or clinics. Make them feel special and valued by offering special pricing or packages only offered to them via email , Instagram, Facebook or direct mail flyer. Announce the “special” services that you offer, i.e. free local board delivery, free t-shirt with any online purchase, etc. Post online videos of new products arriving in the store, review of latest surfboard or fins. Partner with local gym, physical therapist, yoga studio on how to stay in shape for surfing. Raffle off a high-ticket (but slow moving) item—surfboard, skateboard, bodyboard, wetsuit
d) Don’t forget the power of direct mail, even in this age of emails, texts and tweets!
5) Make employee training a priority to enhance the customer experience
Most negative Google reviews for shops mention uninformed or apathetic employees, not receiving any attention or even “hello”, newcomers feeling like they weren’t “cool enough” to be in the store and other similar responses.
a) Establish a protocol for all employees in how customers are to be addressed, shown product, questions answered, etc. Practice role-playing different scenarios which might arise in dealing with both of these issues–create “what if” scenarios and have them act them out with each other, i.e. how to handle refunds, how to upsell without pressure, how to cross-merchandise, key questions in selling a surfboard, wetsuit or skateboard
b) Have a clearly-defined policies about price-matching and product returns.
c) Train employees on the subtle art of “upselling/cross-selling” to help boost sales and increase the positive interaction between employee and customer
d) Employees should never be sitting around, doing nothing…straighten racks, re-fold t’s, dust off displays, move and re-merchandise sections, restock shelves, break down boxes, etc—there’s always plenty to do in a shop!
e) Consider tracking sales per hour as a motivational tool to boost performance for ALL employees and as a measure for providing bonuses to the most effective, productive ones
I hope that this article inspires you and offers some insight, direction or prioritization for the upcoming months. Please call me if you want to discuss any of these thoughts in greater detail, or need private label products!
Mahalo
Dave Seehafer
info@globalwaveventures.com
949-466-4110
**obviously, first and foremost is the health and safety of you, your family, employees & customers**
**these ideas are based on continued compliance with federal, state and county mandates**