What’s their secret? Is it luck? Location? Have they simply been around longer than others?
Numerous factors can come into play, some of which may include the aforementioned suggestions. However, if you get a chance to ask how a successful retailer is making it through the downturn, you will likely see a very pro-active mindset.
I came across an article by Scott Kreisberg, who’s POS business has provided him numerous opportunities to learn and interact with retailers and merchants on a daily basis. During the course of his dealings, especially of the past 3 years, he has identified 5 key elements which separates one business that makes money from one that is not:
- Extra marketing to get customers in the door. This is probably the only area mentioned where there could be additional expenses, but not all the time. The social networking arena would be something to look into from a no-cost (just time) perspective. But like any other tactic, it needs to be embraced and committed to in order for it to work.
- Knowing their customers and marketing to them. Again, there is a time element here. Doing the due diligence to research your target market more intimately – knowing the buying habits, popular products, which days they visit, etc. and catering to these factors, will likely pay off in the short and long term.
- Good promotions. Now more than ever, people are looking for more bang for the buck. This is where you can get creative with what you already have, or scale back on your profit margins rather than incur additional expenses e.g. bundling, group buying, 2-for-1, gift cards, loyalty programs, clearance sales, etc.
- Careful inventory control. Pretty straight-forward here. Don’t let unsold items take up valuable shelfspace, and make sure your popular items are front and centre (and moving, of course).
- Excellent customer service. This has to come from the top-down. That’s how you get your employees to represent your business, and your customers will appreciate it when you can walk the talk.
I would go on and add a 6th point and say that it’s important to know what your competitors are doing as well. It’s not necessarily about re-inventing the wheel, but to definitely take the 5 factors and see how they stack up against it.
Feel free to read Scott’s full article and to see his take on the 5 factors for success.