SPECIALTY STORES

SPECIALTY STORES UNDER SIEGE: A SURVIVAL GUIDE

"Department Stores Spell More Small Store Misery"
"Designers Eye Additional Retail Locations"
"Outlet Malls Invade Metro Areas"
"Everyday Sales Nourish Price- Conscious Customers"

Headlines taken from a recent sampling of industry publications are less than comforting. Whether television, radio, daily papers or the trades, the stories carry the same message. Taken in total, they are describing the independent specialty retailer under siege. Until recently, with obvious exceptions, the fashion apparel industry has gone along pretty smoothly, but recently, our live-and-let-live attitude looks more like dog-eat-dog:
Department stores and chains are promoting incessantly.
Designers and manufacturers are aggressively opening stores.
Manufacturers and suppliers are selling to anyone and everyone.
Without question, our industry is in turmoil. Specialty store closings are at an all-time high. For many of those remaining, volume is much less than just a few years ago. And if that's not enough, apparel manufacturing is confused and frequently out of touch. So what's going on? Is this the end of the line? Is it time to cash out and buy that bed-and-breakfast in the mountains?
The problem with all this doom and gloom is the generalizations. Not every independent specialty store is struggling. Many in our industry are stronger than ever. Their sales are up, their payables are current and their outlook is positive. With all that is happening to our industry, how is this possible? What sets these stores apart from the rest of the industry? In the legal profession, lawyers openly examine the work of their peers. In the restaurant industry, ideas and techniques are freely exchanged. But specialty apparel retailers exist in a vacuum. We seldom visit our competitors, network little and depend way too much on our suppliers for information. Being a successful retailer in the Nineties is not an accident. It happens only with the combination of hard work, skill and determination. Today's best stores have some common qualities that are worthy of examination:

Narrow Focus
While a cliche of the first order, niche retailing is the only appropriate response to the influx of big stores. Big stores sell everything to everyone. Best stores focus, choose and edit. Big stores are general. Best stores are specific.Passion for Change
The best stores are never satisfied. No matter the month or season, these retailers are looking for change. With few basics, no matrix buying and no heavy reorders, everything is up for grabs. Finding new suppliers is a best store obsession.

Essential Technology
The best stores have embraced technology. They consider it a competitive edge. Additional technology is about better information. Yesterday it was PC's, faxes and cellular phones. Today it's database marketing and satellite conferencing. Tomorrow it will be small store EDI and home page direct marketing. The best retailers can't wait.

Necessary Markup
For the best stores, keystone is dead and buried. These retailers are long past 50 percent and not looking back. Best stores know they're entitled to a fair profit, and low markups won't get the job done. The best stores aren't obsessed about price, they're focused on value. They buy with markup in mind and avoid big store brands.

Objective Relationships
Best stores expect their suppliers to produce results. They want their goods on time and as ordered. They dislike partials and abhor substitutions. Their account is current, and they expect good service. For these best retailers, vendor loyalty is the result of performance. When the sell-throughs slow down or quality drops, they move on.

Confident Buying
Best stores thoroughly understand their customer. Best retailers work their floor and consult with their staffs. They know what their customers want and where to get it. Suppliers know a best store when they see one. Their PO's are smart and their quantities deep. It's hard to sell to a best retailer; they buy what they need.

Aggressive Merchandising
Best stores take necessary markups and appropriate markdowns. Their gross margin approaches 50 percent and their turnover exceeds industry norms. They keep an eye on their basics and reorder on schedule. Because markdowns are limited, best stores move quickly to the next season. Best retailers practice open-to-buy and classification merchandising.

Consistent Advertising
Even the smallest best stores have an advertising strategy. They understand the value of consistency and persistence. Whether it's direct mail or some other media, best stores engage their customers regularly. Best retailers understand that saying anything is better than saying nothing.Exceptional Staffing
Best stores have great staffs. Customers identify best stores through their salespeople. Perfect inventory and award-winning design are a waste if the staff is second-rate. Best retailers pay well and offer various incentives. Ongoing training and employee goal-setting result in low staff turnover.

Exemplary Service
At the best stores, customer service isn't just a policy put forth by management, it's an attitude. Best store customer service is both creative and responsive to individual needs. Empowered sales staffs keep customers happy. Best stores understand that uncommon and unexpected customer service is a never-ending job.

Uncompromising Standards
Best store owners don't settle. They take no comfort in excuses. When sales consistently fall below last year, they know it's not the weather. When profits are down several months in a row, they don't blame the election. Opportunities abound for specialty retailing. As department and chain stores increase both their size and technology dependence, they leave a sizable opening in the marketplace. Not all consumers want large, never-changing assortments. Not all consumers think "down aisle 22" equates to customer service. Carefully edited selections, exemplary service and intelligent pricing still have a big following. This is where we belong. This can be the best of times. Bill Pearson is a strategist, analyst and lecturer. His company performs merchandise management and general consulting for specialty apparel retailers.Retail Analysis & Planning is located at 1625 Knollwood Drive, Pasadena, Calif. 91103; voice: 818-584-9734; fax 616-564-8473; E-mail: BP4RAP@aol.com

CUSTOMER SERVICE
IDENTIFY AND ADAPT TO CUSTOMERS' SHOPPING STYLES
Are you aware that most people shop and buy in a particular shopping style, a style that reflects their personality and their dominant communication style? Did you know that when you sell, you tend to sell the same way that you buy ?
There are four dominant shopper styles and four dominant seller styles. If we only use our preferred style, we in effect turn away 75 percent of potential business that comes our way every day.

The Hasty Style
These individuals are always in a hurry. These people are not procrastinators. They tend to be quite opinionated. They want facts, reasons to buy. They really mean it when they say, "I hate to shop!"
You can recognize the hasty shopper by the frown and scowl on his or her face. This shopper is difficult to build a relationship with. They are very direct, with fast and quick answers, and will clearly state what they're looking for.
Sell to this style by matching them. Be assertive, give them quick, fast and efficient service, and you will find the scowl disappearing. You'll also discover to your surprise that if you provide them with the type of service that they enjoy receiving, they will eventually form a relationship with you. Why? Because they would rather return to you than deal with a stranger in the future.The Intimate Style
These people are into relationships. Whom they are buying from is more important to them than what they're buying. They happen to be people who are easy to sell to. They are amiable, friendly, cooperative and talkative. They need your patience, attention, and care. If you have difficulty forming relationships, if you're not a small-talk person, you may be turned off by the intimate shopper. To effectively sell to the intimate shopper, pay attention to them, listen carefully, use the "feel words." "How do you feel in that?" or "Would you feel better if...?" Also offer down-to-earth reasons for buying. The intimate shopper is quite practical.

The Cautious Style
These types are into information and detail. They need to know, know and know some more. How much you know impresses them. If you are a seller who is fast paced, quick on your feet and anxious to move on, you'll have difficulty adapting to the cautious shopper.
You can adjust and adapt by slowing your pace, listening carefully and, even though you may not be into detail, getting informed. Cautious shoppers are not fast decision-makers. They do tend to procrastinate and take their time. They will use the words: "Let me think about it" and they really mean it! You may not sell this style during your first attempt, but if you stay determined, and answer them in detail, you will make the sale. You will find that the cautious shopper becomes a very loyal customer.

The Proud Style
These customers are into self-importance. Initially, they're very difficult to sell to because they tend to come across as experts on everything. They seem to know what they want and they think they know what is best for them. But then, they're easy to spot, because all you have to do is listen for the "I" word. What will the product do for them, how will it make them look better, feel better or present themselves better to others? Most of the time, proud shoppers simply don't know what they want. To sell effectively to the proud shopper, you must listen well, acknowledge their importance but have a fun and relaxed approach. Get them involved with your enthusiasm for your product. This style more than any other needs to be in control. They need to feel that the decision to buy is theirs.
Look at discovering shoppers' styles as a game. Make it fun. Become a detective. Keep a score on how many times you guess right. Just begin by observing, watching and listening closely to any stranger with whom you don't click immediately.
After discovering a shopper's style, use these fast and easy tips to help you win the sale.The Hasty Shopper
They need to see it. Put it in their hands. Let them experience it.

The Intimate Shopper
They want a relationship. Relate to them! Talk to them about places and people before you introduce them to your product.

The Cautious Shopper
They want to know everything. Just tell them as much as you can and continue to ask for objections.

The Proud Shopper
They want to impress. Involve them. Show them how important they are. Give them control.

Terri Kabachnick, CSP, is principal and founder of Terri Kabachnick & Company Inc., based in Cromwell, Conn.

DIRECT MAIL
DIRECT MAIL:KNOW THE RULES

Direct mail can be a powerful tool to increase a specialty store's bottom line. It can replace or enhance face-to-face sales, generate leads, inform consumers, gather information and retain customers. Unlike general advertising, direct mail is measurable; you'll know exactly how much it costs to acquire and retain your customers. If you follow a few simple rules, it can work for your business.
Here are ten basic rules for a successful direct mailing. Follow them and be a winner.

1. Therule. Forty percent of direct mail success is the mailing list. It's easy for the wrong person to say "no." Forty percent is the offer or how well your product and price hit your prospects' "hot buttons." Only 20 percent is in the creative factors of how well it is written and looks. If you haven't contacted the right person with the right offer it doesn't matter how pretty, clever or expensive your mailer is because the prospect won't be buying.

2. The six-pack rule. Send your mailings out six times and it will keep selling for you. Your marketing messages must be experienced six to 27 times before it registers in the prospect's mind.

3. The junk mail restriction. Think twice about bulk mail; five to 10 percent is lost in the mail and 12 percent is tossed instantly as junk mail. A whopping 22 percent never gets opened.

4. The Kiss rule. Keep It Simple Stupid. Make it easy for your prospects to buy from you: easy to read, easy to understand, easy to reply and easy to buy.5. The testimonial tenet. Authentic testimonials in a letter will increase response. If it's a well-known company or person, all the better. This is so powerful, a plain old copy of a testimonial letter will work.

6. The telemarketing formula. Direct Mail plus Telemarketing equals an increase of two to 10 times the response rate.

7. The tracking mandate. Direct mail is the third most expensive means to reach prospects, so don't do it if you don't plan to track it. Your direct mail should have a "bounce-back" mechanism to measure return on investment. The bounce-back can be a "Yes, I'm interested" card, a store coupon, a mail order form or a "Call Now to Order" response message. Then, if your mail campaign doesn't produce an adequate return on investment (response), adjust one element of the mail piece--different offer, list or creative--and begin the fine-tuning process to get the results you want.

8. The ROI rule. The minimum ROI (return on investment) should be 2.2 times the cost of the mailing.

9. The AIDA guide. Grab the readers' attention and arouse interest quickly; they decide in the first five seconds whether to read on or not. Create desire and get them to take action by providing a sense of urgency and an easy means to reply or buy.

10. The caveat directive. You can have a wildly successful mail piece by breaking some of the rules! Look at the big sweepstakes publishing companies who regularly break the Kiss rule. They send four-page letters with a "This is your last chance to order" card, two pages of stamps and stickies, then they make the reader match the stamp to the right box and get it all back in the envelope so the "Order" symbol shows through the window. Whew! Nothing simple about that...and it works...over and over again.

Since 1986, Elaine Kennedy, principal of Sales & Marketing Strategies, has been helping organizations increase sales with performance-based marketing and customer service strategies that work. She can be reached in Norfolk, Va. at 804-440-1648.

ADVERTISING AND PROMOTION
POWERFUL, PROFITABLE PROMOTIONS
Ongoing promotions are more important than ever today. Retailers continually learn from the successes of other retailers. Here are a variety of unique promotions that have been tried and tested with much success by stores across the country.The Phone Card: A Great GWP
It has the added benefit of being a constant reminder of your store's name each time the consumer uses it. Columbia Shopping Center in Kennwick, Wash., offered a "Magic Minutes" card to customers who made purchases that exceeded $100. The phone card represented 15 minutes of long-distance calling throughout the U.S. and proved to be a real winner. There are a multitude of companies that supply such cards; they customize them with the store's own graphics, name and logo. (It goes without saying that if you feature such a gwp, you should announce that fact in all your advertising.) Contact Quest Telecom, 800-277-7682, for phone card information.

Cross-Marketing
Retailers join forces with a local restaurant, club, beauty salon, travel agent or florist in order to jointly develop very special promotions. For example, these could focus on Valentine's Day, Mother's Day or Christmas or simply a special day. Examples include a register-to-win contest, a raffle or a competition in which the public submitted essays describing why their mother was "the best." Another was for the most romantic Valentine letter. Both the retailer and the cosponsor use the promotion for publicity; it costs the store nothing, yet reaps rich rewards in terms of sales and public image.

Winter Coat Drive
Searle, a specialty women's retailer introduced a winter coat drive in conjunction with a bank, the local transit authority and a TV network station. Searle ran ads (featuring the Statue of Liberty shivering with the cold) that urged the public to donate their old coats, which were then distributed to the New York homeless. In return, Searle offered donors a discount on new coats purchased from its stores.

The "World's Worst Tie" Promotion
A Canadian men's wear store organized a competition that invited customers to submit their worst tie. Store gift certificates were given as prizes for the winners. The neckwear was exhibited in the store window, causing much laughter and drawing people into the store.

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