So What Do You Do Now?

It’s October 7th, 2008 and the US economy is in free fall. Politicians are scrambling, the world and the US markets are spinning and frankly it looks like no one has a firm grip on just how to turn the economy back around. Consumer confidence is so low that most people don’t know whether to buy, sell, save or spend. The last thing on a customer’s mind is buying anything other than the bare necessities. So what’s a poor merchant to do?

As a retail consultant I’ve weathered two previous recessions. Some of my client’s made it, some did not. What can you do to make sure you’re a retail survivor? First, become aggressive. If you sit passively by and hope for the best your business will decline rapidly.

Second, cut expenses - now. Take a close look at payroll, advertising; any variable expense that you have some control over.

Third, reevaluate all your merchandise buying decisions. Determine exactly what’s selling and what’s not. Don’t overbuy and for items that you can get quickly, start buying as you go and keep stock to a minimum.

Evaluate each potential point of differentiation and make sure they all help boost your overall value proposition.

Fourth, drive customers to your store. How? Through more effective advertising and marketing. The fastest way to capture new customers is to use the web. Google’s AdWords is an inexpensive way to reach local customers as is Yahoo! Search Marketing, MSN adCenter, online Yellow Pages, etc. If you don’t feel competent setting up your web own advertising, find a consultant via a referral or Craig’s List.

Make sure your website is up to par as there’s no sense driving traffic to a lousy site. Build an email newsletter that reaches out to your customers with specials, events, news, articles etc. You can also place ads in local papers which provide discount coupons, giving budget-minded customers a reason to come in.

Use PR to tout your business. For example, a beauty shop could hold special events such as fashion shows, make up sessions and make-overs. A music store could host a battle of the bands or offer in store demonstrations of the newest gear. A sporting goods store could run clinics on pitching, serving a tennis ball or proper running technique. Anything can work as long as it builds a community around your store’s brand. Participate in local street fairs. Sponsor or directly participate in charity events. Do whatever it takes to get your name out in to the community all the time and don’t stop. No time? Hire a PR intern from a local college.

Fifth, emphasize your value proposition in all your marketing efforts. What makes you so great? Why shop at your store rather than a competitor’s? Is it your competitive prices? Your unique products? Your convenient location? Your friendly, well-trained sales people?

Evaluate each potential point of differentiation and make sure they all help boost your overall value proposition.

Sixth, dress up your store. If you can get people to come in, make sure they like what they find. Ask yourself the following questions to determine whether you have all the elements that make your store sing:

  1. Do the window displays capture a prospective customer’s attention?
  2. Do the lights in the store provide both ambient light and display lighting and are track lights focused on important merchandise?
  3. Is music playing? Does it relate to your customer demographic? Remember that great music keeps customers in the store longer and they buy more while there.
  4. Is the store clean? Everywhere?
  5. Are the colors current? Do you need to repaint?
  6. Are the display fixtures in good shape and do they merchandise your products correctly?
  7. Are your products merchandised so your customers are drawn to them? If not, hire a part time merchandiser.

Once all of the above are in place, don’t forget to keep them there. After all is said and done, it’s important to remember that if you’re not moving forward with your business, you’re going backwards.

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