Quick! What's Your Inventory Turn?

By Kizer and Bender

That's a fair – and an important – question. Inventory turnover is a measure of the number of times inventory is sold within a period of time, usually a year. There are a number of ways to determine your inventory turn figure, but the easiest way is to simply divide your last year’s total retail sales by your year ending inventory at retail value.

Retailers with a better turn rate achieve that rate because they closely control their inventory. They are empathic about delivery dates so that the product arrives at the store when it needs to be there. And they are pit bulls about managing the inventory on hand and about reducing the selling price when necessary to recoup as much of their investment as possible. Here are some things to think about:

 

Take Control

 

So, how do you control inventory? Sell it at regular price in a reasonable amount of time or at a reduced price to clear it out – it’s just that simple! The only markdown exception is basic merchandise that you must stock every day of the year. Beyond that, reviewing your entire selection of items at least once a quarter is mandatory. With very seasonal items this review needs to happen at least once a month.

 

We recommend that you adopt a bin ticket system: a sticker with a date code that you place on fixtures so that each item has a designated home, and so that you will always know when each item in your inventory arrived. It’s an easy way for you to instantly know which products are selling and which ones are not. You will also want to encourage your store associates to keep the sales floor neat and tidy. They are not just cleaning, they are organizing the inventory. Face it: shoppers are expected to play with the merchandise. They move things around and leave them in places where they are not supposed to be. Don’t let misplaced items account for lost sales or the repurchasing of something you already own.

 

Adopt KIZER & BENDER's Dot System

 

Have you ever been on the sales floor, looking for a certain product, only to find that that merchandise has sold out and has been for weeks? Or maybe that shelf on the sales floor is empty, but there’s a load of what’s supposed to be there in the stockroom. Aside from those bin tickets that tell you what’s supposed to be in that empty spot, you need a backup plan.

 

Adopt the Dot System! Stop by your favorite office supply store and buy a bunch of small red and green adhesive dots. (Avery Labels makes the perfect size.) Place a green dot on the bin ticket if there is more of this product in the stockroom; add a red dot if there is no more of this product available in the stockroom. Instruct your associates to check the stockroom when they come across an empty shelf, and a bin ticket with a green dot – they need to refill that product ASAP. Once there is nothing left in the stockroom they can replace that green dot to a red one. The Dot System will quickly alert you to areas on your sales floor that need your attention.

 

Okay, we know what you’re thinking: “Why do I need to do this? My point-of-sales system tells me all I need to know.”  Now honestly, if you scan your POS reports on a weekly basis then you're good to go. But there’s a BUT coming here, and it’s a big one: You still need to do physical cycle counts to further control your inventory. This is important because non-selling products are expensive to stock; they tie up dollars that you could re-invest in merchandise that will turn (sell).

 

Let’s say you have $500 at retail in items that have sat on the shelf for a year with no sales, throwing off zero profit. Nothing. Nada. Zilch. If you sell these items by taking a 30 percent markdown you would get back 70 percent of those inventory dollars or $350. Now, if you reinvest that $350 in new and in-demand merchandise (that’s $750 at retail markup) and then turn this merchandise two times in one year, your sales would be $1500. Those bin tickets and little sticky dots will make you a better investor of your own money.

 

Encourage Sales with Daily Goals

Having a daily goal will help your keep your associates focused on selling. Set aside a few minutes each morning to complete a Pre-Opening Checklist that outlines everything that’s planned for the store that particular day. This checklist should include the daily overall store sales goal, departmental goals, item of the day, in-store specials, classes, sales events and promotions – anything and everything associates need to know about what’s going on in the store that day. The closing manager can fill out a Store Closing Checklist of tasks that need to be completed before the store reopens the next day. Drop us an email and we’ll be happy to send you customizable templates for both checklists.

 

Hold a Daily 10 Minute Meeting

Call it your Daily 10. Gather associates on the sales floor each morning for a short meeting before you open for business. Take 10 minutes to talk about what you expect form them that particular day. Talk about product, techniques, applications, customer requests, policies, trade shows, industry news, associate experiences, and upcoming events – whatever makes sense that particular morning. Clear and consistent communication will keep everyone in the loop and on their toes.

 

Everyone Needs to Add On

 

We call it Gimme 5!, a daily exercise that’s geared to increase sales. Hold up an item and ask associates to call out five items that could be added-on to this item to increase the sale. Add-on selling is good for you and it’s good for customers – you’ll up your average sale and customers won’t have to return to the store to pick up the additional items they needed to complete their project, but forgot to buy. And if you come across the rare item that had no add-on potential, recommend whatever is on special that week.

 

Manage Your Markdowns

 

Now, about those markdowns… Do you take markdowns in a timely manner? Kick the dogs to the curb before it’s too late? Good for you! Remember, as tough as it sometimes is, the first markdown, the one that makes merchandise more appealing to customers, is almost always the cheapest one to take. Be vigilant about keeping a close eye on your sales floor. If you wait too long you’ll start eating into the real money you have invested and your profit margin dollars will disappear.

 

You are in business to make money. Smart inventory control, plus a focus on selling, keeps your cash less tied up and opens opportunities to keep your assortment fresh. There are many schools of thought on inventory control, how to determine turn rates, flow of items and more – so many that we could never cover them in just one post. But no matter how the calculations are made, remember that the most devastating damage is caused by a lack of inventory management.

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How to Turn Non-Customers into Customers

By Kizer and Bender

 Sometimes, you just have to go back to the basics and take another look at how you are doing business. Our world has changed; customers have plenty of choices when it comes to buying what you sell. Customers themselves have changed: different generations want different things. And Gen Y and Gen Z are dragging some retailers kicking and screaming into using new technologies. But make no mistake, you will have to adapt to these new ways of doing business.

 

We get lots of questions these days about how to conduct business. Is there a new etiquette? The answer to that question is yes. And no. Consistently great customer service is still great customer service but it’s not always enough. Let’s take a look at three of the challenges and opportunities facing retailers today:

 

“Do I have to repair or service products that people purchase elsewhere?”

 

The easy answer is, you don’t have to, but if you want to stay in business you need to serve the people who need your help.

 

It costs up to five times as much to get a new customer than it does to keep an old one happy. Think about that for a moment. If a potential new customer comes to your store seeking help, help her. You didn’t get his first sale, so don’t miss the second. If you turn her away, you are not only walking potential sales, you are hurting your store’s reputation and potentially creating harmful word of mouth.  Who wants to be known as the store that isn’t willing to help?

 

It’s fair to charge for your services, just smile and explain your policy. Hang a sign in your store that politely tells these potential customers what you can do for them, and what it will cost. Then get to work turning them into lifelong fans of your store.

 

“What about customers who buy online or from another retailer and come to me for advice on how to use the product?”

 

This is an age old dilemma facing all retailers. We’ve met retailers who are openly hostile with customers like this who have the audacity to ask for their help. And we’ve met retailers who embrace the opportunity to get their future business. Think outside of the box! We know a scrapbook retailer who was getting killed on Cricut machines – everyone wanted them, but the big boxes were selling them for less than her cost. So she got creative and started a series of Cricut training classes, and people lined up to attend. At the end of each class, she gave attendees a coupon they could use for future purchases in her store.

 

So, offer classes and invite these customers to attend. Host in-store clinics where you teach the basics. And sell private lesson packages. Hang a sign in the window, and on the sales floor, that reads something like this, “It’s one thing to have a new toy, it quite another to know how much fun it can be when you know how to use it properly. We’re here to help!” Add this message to your website and social medias. Get the word out that your store is the Go-To store!

 

“Browsers drive me crazy. I need buyers.”

Questions like this make us scratch our heads, wondering why the person who asked it ever got into retailing.

There’s a home décor store not too far from where Georganne lives, and she and the owner have become friends. It’s a fun place to go and get ideas and to dream about changing or updating your home. Georganne used to go there a lot, and over the years she made many purchases, but then she stopped going there because the owner got snotty when she did not buy. Here’s the thing: Your store has an ambiance that customers can feel when they enter the front door. This ambiance comes directly from the owners or managers personality. In other words, if you’re not happy, customers can feel it.

 

Once a shopper enters your store there is a world of possibility to turn them into buyers. Show them around, if they don’t buy this time how they are treated will determine if they come back. Sign them up for your newsletter and email blasts. Tell them about events and promotions, offer ideas, and invite them to hang with you on social media. You know the drill!

 

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Power of Print Media: Print Catalogs are Alive and Growing

By Kizer & Bender

Holiday 2015 is closer that you might think. We’ve been working lately on marketing ideas to share to help you make this your best season ever. While brainstorming options for capturing and engaging customers we thought about catalogs. Do you currently use catalogs as a marketing tool? Have you thought about it?

We asked our friend Tom Ungrodt, President and CEO of Ideation, Inc., a catalog marketing company that services independent retailers, for his thoughts. Here’s what Tom had to say:

While large retailers have been mailing catalogs for years, now specialty retailers are gearing up and running with the idea. In fact, several of these mega-retailers have significantly upgraded their catalogs recently. Even digital retailers are now mailing catalogs to enhance and support their business.

Why is all this happening in a business that everyone thought was “a dying breed”? Because print simply re-enforces all aspects of a business, giving the consumer one more opportunity to shop from the mailbox. Social media is here to stay, but catalogs are as well.

After many years in the print business I have identified one advantage to print that is often overlooked, SHELF LIFE. When a catalog arrives in a consumer’s mailbox the next stop on the coffee table or kitchen counter where it remains for weeks on end until the family has the opportunity to review it. It’s the opposite of a typical social media post or an email blast that is generally read and gone within minutes. Catalogs have staying power.

To create even more staying power you can personalize it through data base management companies, allowing you infinite methods of directing your print to the exact customer you are targeting.  A retailer should begin to collect customer names and addresses along with emails, and then revert to a data base marketing company which will give you everything you need to successfully mail your piece to your local neighborhoods. Identifying and tracking your customers is much easier today than in the past, particularly if you use social media to collect your information then refine it for print. Catalogs have specific mailing dates and customer source codes allowing exact tracking of your sales objectives.

Retailers have also discovered that catalogs can be used for high quality content marketing. The use of high quality print pieces filled with stories, fashion images, etc. will drive more traffic to the store. If you own a gift store, for example, and have the need to introduce a new product line, a catalog is the perfect way to reach those customers that have an interest. And it’s a great brand-building tool.

Catalogs, social medias, ad, email blasts all potentially attract a different customer base – multichannel marketing is the key to successful retailing now and in the future. Given today’s new dynamics of multichannel marketing and commerce, and the new targeting measurement capabilities  catalog marketing has to offer, I truly believe catalogs are here to stay for many years to come.

 

To View Original Article: http://www.retailadventuresblog.com/2015/07/power-of-print-media-print-catalogs-are.html

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Guest Post: Increasing Customer Engagement with Pop-Ups

by KIZER and BENDER
While the notion of a pop-up store may still be a little new to you as a brand or a retailer, the notion of customer engagement isn’t — it’s what a brand is all about. Assuming that people already know your story is a mistake, and in these socially-interactive times, assuming people will express themselves about your brand, without a reason, can be an even bigger one.

 

Customer engagement allows for a couple of key interactions. First, it allows customers to experience your brand on a whole other level. Second, and sometimes more importantly, it empowers them to feel like they’re involved in the brand. They begin to feel that their voice is a part of the brand. You see it all the time: customers at a store taking pictures of themselves, which they’re posting on social media with a hashtag. This really allows customers to “inject” themselves into your brand, and pop-ups can provide them with a truly unique opportunity to do so.

 

Aruba Tourism’s “Pop-up Paradise” was an example of just that. In the middle of Times Square on Valentine’s Day, Aruba Tourism set up a booth for people to renew their vows. It was perfect: a romantic beach area where people could renew their vows and take a picture of what they would look like in Aruba doing that very thing. By appealing to people’s fantasies, the pop-up paradise resulted in hundreds of social media postings. The best part? Some of the participants got free trips, so they could do it for real!

That was a huge way for people to immerse themselves in this conversation about love, Aruba, and traveling. It got into people’s psyches and formed a connection between the words “love” and “marriage” and “romance” and “Aruba” — even the thousands of people who weren’t there but were reached through social media.

Brands need to encourage these kinds of customer engagements for many reasons, but one major reason is that the customer’s point of view becomes, “I have a voice, too.” In this way, you create real evangelists for your brand, because they feel like they are part of the experience of the product: “Look at the picture I posted. Look what I got for it. They valued what I had to say.”

 

Can’t These Experiences Be Created Online?

Many brands ask, “But can’t we do the same thing online?” 

 

There is an aspect of this type of experience that fares well online: the brand can put up aspirational imagery and give awards and host contests — so, yes, the answer is that you can do a lot of this online. However, in an actual physical space, you can accomplish all that and more. When a customer participates in a pop-up, they are literally walking into the life of the brand. While they might have reluctantly tweeted about your brand for one day, receiving an invitation to share your real experience with the brand is much stronger. You satisfy the touch/feel gap, which creates a much stronger engagement with you as a brand.

The Touch/Feel Gap

 

An actual physical experience gives customers something they can’t get online: an experience in all five senses. Online, you can certainly see a product, and even though people are trying to develop technology to enable you to touch and feel a product, it hasn’t happened yet! When it comes to the aesthetics of a brand, there’s no substitute for the genuine article, the real physical experience of being surrounded by the brand’s promise.

We don’t pay attention to just touch or feel, either. Notice how often when you’re in a certain store, it even smells a certain way? Certain restaurants and clubs are famous for using trademark scents that customers associate with them. Luxury body and bath shop, Sabon, is the classic example of this. The way they involve a customer with the touch, feel, and smell of the product immediately leaves the customer with all five senses influencing how they feel around the brand. It’s a total package.

 

Also, don’t forget the opportunity to hear from, and speak to, a designer or brand ambassador. Yes, you can chat with somebody online, but it’s not the same as an in person meeting.

So the “touch/feel” gap is actually much bigger than even one sense — it encompasses all of them. What you see, what you hear, and what scent surrounds you all contribute to how you feel about a brand. These things can’t be replicated online.

 

The Aspirational Connection

What makes people want to share images online? What makes them proud of the picture they’re putting up? What makes them excited enough that they’ll decide to become ambassadors for your brand?

Customers get excited about situations that, in most cases, aren’t attainable. When Sarah Jessica Parker worked at Nordstrom helping people try on shoes, that was a dream come true for a lot of people. How often does somebody that you watch on TV help you to try on your shoe? That’s a pretty big hook, and it inspires you to want to tell everybody you know. Something that you can’t normally get every day, something aspirational, is what turns the key. I aspire to win the morning. I aspire to be in paradise. I aspire to . . . whatever. Fill in the blank!

 

Aspirational is a great umbrella word: it covers a lot of territory. In order to be aspirational, a brand needs to really know their customer. This allows them to evoke key emotions — love, or romance, or being empowered to be more fashionable, to be on the cutting edge — and allow their customer to identify with that emotion and to share this feeling with their friends. So, in that way, a pop-up store can turn create an aspirational connection and, in turn, inspire conversations about your brand.

 

  

About the Author

Melissa Gonzalez is the author of The Pop Up Paradigm: How Brands Build Human Connections in a Digital Age, the first book to deeply explore the importance of pop-up shops in today’s retail landscape.

 

She is also the founder of the Lion’esque Group, a firm of pop-up architects™ who have produced over 80 pop-up retail experiences in New York City, Los Angeles and the Hamptons. Her clients include major retail brands like Marc Jacobs, J. Hilburn and Sole Society.

 

In 2014, her work was honored with the CLIO Image Award for experiential engagement, and was a finalist for the New York Design Award for marketing and branded experiences.

To view the original article visit: http://www.retailadventuresblog.com/2014/12/guest-post-increasing-customer.html