I believe that 2010 will be a landmark year for retail. The first quarter is definitely going to be tough, and I think it is probable that some retailers will run out of gas and close their doors. The ones that survive will do so because they followed the basic rules of retail today. I'm going to lay out a few of those for you.
Rule #1: You need a great sales forecast that you must use to plan the proper levels of inventory. That doesn't mean that you can't occasionally gamble on the "next great thing," but you do have to make sure that you are properly measuring customer demand and stocking merchandise to meet that demand.
Rule #2: You need to give shoppers a reason to shop. When the economy was flying high, people ambled into stores and bought stuff without your having to do much. Those days are gone. Shoppers will go into those stores that market properly. Marketing includes: store events, social networking, reaching out to your customers and showing them that you care about them and want their business.
Rule #3: You need to know your numbers. Retailing today requires great study of your sales, inventory, purchases, expenses, customer trends, and staff productivity. This is definitely not the time to "guess" or "approximate" the next move. You need to know what inventories to bring in at what times, and you need statistics to support and evaluate those decisions.
Not bad, right? Just three rules. Well, I'm going to add one more: You have to have fun doing all of this. When the economy gets tough, people just adore sharing the horrible news. The media is having a field day telling us all how we are just seconds away from losing everything we have. Customers already know that it's tough out there and don't want to hear it again. So, make your store a ray of sunshine and people will gravitate to you.
I hope all of you have a wonderful 2010.
About the Author
Dan Jablons is the owner of Retail Smart Guys, a consulting group that specializes on generating cash flow for specialty retail stores. He has worked in or consulted with retail stores for more than thirty years, and has worked with retailers such as Walmart, Target, JC Penney, American Apparel, Betsey Johnson, Donna Karan, Jimmy Choo, Charles David, Diesel, Oakley, Tumi, Hollywood Bowl, and Blue Bee. His specialties include open to buy planning, marketing, and computer science. Find out more by going to www.retailsmartguys.com, or write to him at firstname.lastname@example.org.
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