Many long running retailers are discovering that some traditional methods of running a retail business are having less impact every year. In this article we look at the top 3 ways that no longer work as well as they used to. Next week we will discuss what new ways ARE working instead.
If you are inflexible to change, you may as well stop reading. However, if you understand that the retail landscape is changing faster than you can blink, these two articles will help you a great deal.
# 3 – Traditional Marketing
Traditional Media Sources. There is still a place for Traditional Media, such as Newspaper, Magazines etc, but for many small to medium sized retailers most of these can be very cost prohibitive. Thus there has been a huge shift from traditional ‘outbound’ marketing, to much cheaper and yet more effective ‘inbound’ marketing techniques that digital can provide.
Promoting Price/Service as Point of Difference. If you are using “The Best Price and/or Best Service” as your point of difference, then welcome to not having a point of difference at all, because that’s exactly what everyone promotes these days, you need to be unique to stand out from the crowd.
Relying on Big Events, e.g. Christmas. Big Events should always be treated as ‘icing on the cake’ and NOT relied upon to ‘get you through another year’. You should be planning to drive your business on a day to day basis, meaning a poor Christmas should only restrict growth, not close your doors.
Relying on word of mouth. How well are you collecting and utilising customer information? If 20% of your clients bring in 80% of your business, how are you rewarding and encouraging repeat business from that 20%? Are you actively building a relationship with your customers to encourage MORE than 20%, or are you simply serving them and relying on your marketing activity and/or word of mouth to bring in the next sale?
Ignoring Promotion tracking. How many marketing activities can you honestly say were a success, or even a failure, and how are you determining this? If you are using “sales are up, so it must have worked” or even “it seemed to be busier”, as your measuring stick… then get another stick!
# 2 – Buying Process
Buying what YOU like the look of, or think will sell. Many retailers tend to buy new lines based on what they personally like the look of, or what their gut tells them might work. Perhaps they will even rely on what their suppliers recommend. This is okay, so long as you have already done your own research on what styles of products and at what price points, are working best for you.
Make sure you keep emotion out of the way and don’t allow your own tastes to sway you away from other lines that you may not like but your customers do. As for dealing with suppliers, (or even how suppliers should deal with retailers), that’s an entire article in itself, so perhaps another time.
Huge percentage off sales. I remember when Myers Australia had their first ever 10% off sale. It was phenomenal. I was serving behind the counter at the time and literally had to give up all breaks for the day and run to the toilet, to keep up with the queues of people wanting to buy! So successful was it that they did it again a few months later… and again… then everyone else caught on to the idea and before you knew it, 10% sales were commonplace. Next was 15%, 20%, 25% and so on, and here we are today with commonplace 50% off sales, even 70%… get my point yet?
# 1 – Old School Performance Management
“It’s my way, or the highway”. ‘Old school’ performance management systems are becoming less and less effective. Put simply, written warnings and potential job loss fear tactics rarely work on people who know their rights and are far more protected by government policies than we ever were when we started out in Retail.
‘Old Style’ Recruitment Processes. Retailers tend to rely on ‘industry standard’ Job Descriptions and Job Advertisements, which have basically been regurgitated for generations. Meanwhile the likes and needs of the current generation are not necessarily attracted to such outdated expectations.
Assuming Prior Knowledge of Expectations. Even if you hire someone who has ‘done it all before’, remember they have only been ‘doing it all’ based on what someone else has taught them. Also, “Common Sense” is now more like “Rare Sense”, so never assume that they will do the right thing, just because a situation calls for it, as they may not know what the right thing to do actually is!
Relying on Commissions to Drive Performance. I have surveyed hundreds of potential employees and the results may well surprise you, believe it or not MONEY is NOT the primary motivator for over 70% of those surveyed! A basic need yes, but not the primary thing that ‘gets them going’ or makes them perform to their best, so how can we expect something that only motivates 30% of the people to drive performance on ALL of them?
Keeping Company Performance ‘Under Wraps’. One way to encourage ‘buy in’ to your vision and goals is to be more open with how the business is performing versus where you want it to end up and how you plan to get there. If everything is kept ‘hush, hush’, then how do they know where the goalposts are and what impact they are personally having on driving your business forward? You don’t have to show them your profit and loss statements, just ‘share the dream’.
Next week I tell you what’s NEW that works better than the above ‘outdated’ methods of running a retail business. In the meantime, why not connect with me? Here’s my world, choose your poison 🙂
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NOTICE: Content in this article has been provided in a generalised format and is not recommended for every business model. Seek council from your financial advisor before implementing anything contained herein.