Smart retailing in tough times

April 24, 2009
Written by John Stanley
Retailers are experiencing tough times - put on the radio or TV and you will be told this numerous times often within the same news program.

But, take a walk down the high street of any town and I suspect you will see retailers who are enjoying the present economic climate whilst others appear to believe that the recessionary news means a downturn for every retailer in the marketplace.

It is a proven fact that in tough economic times, progressive retailers use it as an opportunity to gain market share and develop strong profitable businesses. This may be a deeper global recession than any we have experienced in the last sixty years, but that could also mean the opportunities are greater for those prepared to grasp them.

The first key to success is to accept that what worked last year will not work this year - you have to do things differently.

Change starts inside your business and inside your head.  The attitude of the owner is the first change to be made. In my own part of the world, I have found an overall deterioration in customer service over the last few months. The excuse last year for not training staff was that Generation Y employees were fickle and not prepared to stay in a job long enough. Therefore investing in training Generation Y was an expensive exercise that could not be justified. It is now 2009 and Generation Y are looking for stable jobs and are staying in the jobs they have. This creates an opportunity to invest in them and train them. Few businesses though appear to be taking this opportunity. 

I came across one major retailer recently who told me that they now carry out their pre-employment recruitment training online. They were checking for personality using an online questionnaire. Now I can see an opportunity in using online training for technical area of the job and product knowledge, but when you believe you can check personality online I have major doubts.

Smart Retailer Tip One: Invest in training in a downturn
You have the time to do so now, and your team have time to interact with your customers. Now is the time when you need to increase the average sale per customer as you may find your customer count has gone down. To increase the sale you need team members who can interact with the consumer in a positive way and who have the skills to increase the average sale per customer.

It is important that you get the internal skills of your team improved as the first priority. Your team are your front line in the battle to grow your business. Once you are confident they have the skills the next step is to ensure they want to stay with you in your business. One system that needs to be put in place to achieve this is an empowerment policy. In my presentations one of the most often asked questions is how do you implement an empowerment policy that works?  But, first let’s go back a step. An empowerment policy gives people responsibility for their actions with the customer. It makes them feel that they are trusted by management to make decisions in front of the customer. This empowerment makes them feel they belong in the organization.

One of the most frustrating things for a customer is to deal with sales staff who are not empowered where every decision has to be made by the owner. I discovered one business recently where the owner was quite open with me. He told me that he could not trust anyone - he even took the money at the till. How can this company grow to its full potential? It cannot.

A simple and effective rule that I find that works is allowing anyone in your team to make a financial decision in front of a customer to the value of the average sale per customer. Where the financial decision is higher than the average sale per customer then they have to pass that query on to a designated team member. Most decisions that have to be made in front of the customer are below the average sale per customer and any team member should be trusted to make such decisions.

Smart Retailer Tip Two: Empower Your Team

Introduce an empowerment policy so that all your team feel that you have confidence in them. When queries are thrown back to management that are less than the average sale per customer, throw it back to the team member and make them make the decision. Once you have implemented this policy, you must support the team members with the decisions that they make.

Take a look at your merchandising through your customers’ eyes. What do your customers see?  Yes, we have had a period when discounting has been the norm for retailers, but smart retailers are now moving onto other strategies to grow sales.

Consumers still want an experience when they go shopping. They will still look for new items, best sellers and ideas. Are you promoting your new products? Are you “bundling” products to offer a solution for your customer? Time is a premium for many shoppers and they want you to do their thinking for them. That means providing solutions and ideas as an opportunity to grow sales

Make one of your team members responsible for promoting products by having a signage strategy that works for customers. Consumers are not looking for more choice, they are looking for more solutions and that is an opportunity to grow sales

Smart Retailer Tip Three: Create New Promotions
Always ensure that you have a new product promotion on the shop floor. Identify your best sellers for customers and provide at least three solutions in store by bundling the correct products together. Silent selling tools can grow sales. Not all customers want to engage with your team. Some are keen to browse shop and discover for themselves, but you still have to make their journey easy for them.

Finally, the best way to market your business is to develop marketing strategies that work with your existing customers and let them spread the message to other customers. This can be a low investment compared to other marketing techniques, but have a higher return. Techniques to use could include networking with other local retailers. For example, the hairdresser in our town has started networking with the local florist, coffee shop and delicatessen. All are offering an incentive to consumers that shows they are working in partnership. Provide a perk for customers that come to your store. Ben and Jerry Ice Cream stores have a free cone day. The only challenge is as a consumer you do not know which day of the month the free cone day will be on. Find out who are the main tipsters in your community that can help grow your business. Ladies hairdressers are one of the best tipsters in our community.

Smart Retailer Tip Four: Review

Have another look at your marketing strategy and find out how you can develop strategies that involve your customers to help you promote your business. Look at the retailers around you and see if there are any opportunities to carry our neighbour to neighbour marketing.

Retailers who are proactive now will be the stronger retailers when the economies of the world improve. I am not saying it is going to be easy, I am saying that you have to change tactics to grow your business in a new environment.

John Stanley is a retail business coach, speaker and author.  His specialist areas are customer focused layout, customer focused merchandising, customer focused marketing and branding, and customer focused selling and service.  Email John  on This e-mail address is being protected from spambots. You need JavaScript enabled to view it or visit his website www.johnstanley.cc.


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