Time to Refocus on the Fundamentals of Retailing!
Not too long ago I was speaking to an old friend of mine who works for one of the top retailers in the country. This company has over 1,500 locations and is a member of the Fortune 500. This company has recently come under significant fire over the past few months for offering a poor customer experience that has been reflected in the company’s sales and profits.
I mention this because this friend of mine was leading a special task force focused on developing new lines of business. Now this is a hard goods retailer that sells consumer electronics, appliances, furniture, hardware products, wireless phones and other similar items. Guess what type of product the task force was looking at???
Electric Cars…That’s right, electric cars…
Now I am not against looking at new lines of business. In fact, I have been involved with numerous start-ups in the tech sector, but this idea seemed a little out of the box even to me – especially when you consider that this retailer has been getting killed in its current business.
With that in mind it make sense for all of us to be reminded about the importance of focusing on the fundamental parts of running a retail operation.
The Five P’s…Plus One
People – Are you hiring quality individuals? Are your providing them with the retail sales training, incentives and product knowledge that they need to serve customers well? What are you doing to ensure that you are scheduling appropriately so that you maximize your payroll efficiency?
Product – Are you buying inventory that people want and are you maintaining good discipline with your forecasts so that you are not left holding the bag with either too much or too little inventory? Are you disciplined in your approach to buying or do you buy on the spur of the moment?
Pricing – Are you maximizing your gross margin by shopping your competitors? Are you encouraging your sales reps to sell (and your customers to buy) product bundles that help improve customer satisfaction through getting them involved with complete solutions?
Promotion – What is your plan to communicate with your customers via both traditional and new media channels? Do you have a good plan to take advantage of (vs. complain about) web-based, mobile, and social media channels?
Placement – What are you doing to ensure you have great real estate for your locations? Within the store are you maintaining displays, keeping products priced, and promoting key products and related add-ons?
Measurement – Are you measuring everything? Like the old adage says…”inspect what you expect.” This includes inventory ratios, gross margin, payroll costs, sales conversion rates, cash flow and all of the other key metrics that will determine your success.
Another old friend of mine said is best…”The only hard thing about retail is the hard work.” So let’s all commit to eliminating distractions and focus on getting to work!
You can learn more about the 5 P’s of retailing by clicking on this link and please consider putting the Retail Advocacy Group to work for you! Contact us today for a free one-hour consultation!
– David Goodwin is the Principal of the Retail Advocacy Group. As a 30 year veteran of the retail industry he has directed the activities of hundreds of retail locations and thousands of retail sales representatives and store managers. RAG offers consulting services, retail sales training and management training programs. You can learn more at www.retailertrainingservices.com.