Tuesday, October 9, 2012

Wall Streeet/ Main Street

.I received an email from a retailer yesterday asking me what was I going to do for Christmas this year considering the financial news we have been facing lately. ("Are you pulling back, lightening up, doing less?") As I was writing her back I realized this question deserved a blog post because I am sure most of you are thinking, what the heck do we do now?

First off, I am NOT anyone to offer sound, financial advice- (please consult your local accountant before taking this medication). I can only tell you how I am handling it and what my personal philosophy is on it. Maybe this will help, maybe not. You be the judge as this is fair and balanced blogging -or too much TV.

Know this, I do not have any money, period. I'm a retailer, remember? As I watch the news and hear of Fannie and Freddie (is that a new Broadway dance team?) I am comprehending about 20% of what is being said. Then the story on Lehman Brothers, AIG and as I write this I am watching a news conference hearing our taxes (almost a half a trillion dollars) are going to be used as a Band-Aid to keep this mess from "getting worse". Are you kidding me? How can Sally's Happy Corner Gift Store get her head around this? What the heck do we do? The country is broke which means mom and pop are too.

So how do we manage our retail businesses with this latest financial news? I am traveling to Sanibel, Florida in November to speak on this issue for the GHTA. I am still perplexed how to approach it so I am waiting for the results of my Christmas sales to help choose the direction of my speech. When the economy became more of my business this year, I had to review a few things.

#1: Who is my customer?
I think we need to come up with an average customer profile and not say, "Well some are wealthy and some are not, some have big homes, and some have cottages, some like pink and some like green so I need to buy for everyone. It's time to choose an average. An average of price point, an average of product choices and an average of inventory volume.

#2: Know what items you sell- all the time, with a great profit.
Study your sales and come up with best selling items and concentrate on them. Since I spend 90% of my time in my office working ON the business and not IN the business I always need to study the books to see what is moving and what is not. I took a list of my top sellers in each department to market.

I chose my Christmas theme back in January and bought for it accordingly. January is when I order the bulk of my decorating items and at the summer market I go back and concentrate on gifts.

This Christmas I feel my purchases were more narrow but still focused. My theme is The Big Chill so I was buying lots of white, icicles and snow. Having a theme always helps me buy style but what I did differently this summer was look at price tags- really look and study and calculate. I did not buy things because they were fabulous or would make a statement or to show off- I bought to sell. Now you may laugh at this because this should be our #1 priority to stay in business but my style of buying has always been my brand first, then price. Now, I need to challenge myself to find the great price and not just the unusual item. In other words, I need to stay in business.

When most of us go to market, I think we all get caught up in the shopping experience. Yes, it's hard work and there are a lot of bad items to overlook, but there is some pleasure in it. We are finally away from our store, we can search and design and compare and be around other retailers and vendors. Our design eyes are at work along with our business sense. January is especially satisfying because we hopefully have come off a good Christmas, have a little money and most of our purchases will be dated to pay for much later in the year so the pressure is off a little. But summer market is different. People are more cautious and there is always an uncertainty in the air because late Spring and Summer sales are not always thrilling. Combine this with the economy and election and there you have it. We're running around with our heads cut off not knowing what will work.

I recently had a run-in with my landlord. My a/c went out and $1,059 later, I called to see if they could help me with the bill. Weeks later they said no. Now I love my leasing company, I really do. They did a tremendous build-out on my store when I moved in and I personally like all the people that work there. But this did me in. This was the icing on the cake because lately I was tired of the juggle I continue to do with this shop every day. It is always something: hiring, firing, vendors, customers, merchandise problems, events, planning, buying, returning, sales- and ALWAYS the money, money, money. I had a meltdown when they said no to the a/c bill and I shot off a 'tell it like it is' email to all the powers that be. When they called me in for a meeting three days later I thought I might leave with a little help after all. What did they do? They slapped my hands! I was stunned. They showed no concern at all. Instead they said they were 'hurt' I had gotten so mad when I had praised them in the past. They showed no desire to help me whatsoever! I was stunned. They also used the ammunition that my sales were up 15% this year ("so what was I complaining about?"). I left there and wanted to crawl in a dark bed and sob. If my sales were up 15% why did I take a 20% salary cut three months ago when the rest of my staff got their raises? Why am I searching for 8% credit cards to get me through Xmas? Here I am again, feeling sorry for myself, being alone and struggling, wanting help from someone and no one was there. I was over it! This money thing has me so depressed I am rethinking my entire retail strategy. It may not be long before this retail circus I have created will have to end. No more special events, tons of sku's, wide variety, unusual displays and drama- it just doesn't make me money. It makes me famous, but it doesn't make me money. There is a reason Pottery Barn looks the way it does. Easy, simple, find it, buy it and get out.

I share this personal stuff on this shop owner blog because I know the majority of you reading are retailers. My customers would say, "NO! Debbie, don't sell out! Don't be like every other store!" But I am telling all of you, this is tough. I am not receiving personal satisfaction because of the juggling and pressure of shop owning and I am certainly not receiving financial rewards- so one or the other has got to give.

As I was sitting at my desk, complaining about all of this to a sales rep, I was cutting out some vintage images I had printed to put inside some new picture frames I had just received, I said, "See- look at this. Does anyone else take an hour to make sure the pictures in her frames are better than the ones they were shipped with?" My friend said I am too much of a perfectionist and that nobody would have noticed the original ugly pictures. This made my heart sink because of course I believe they do notice. But her point was this was the kind of thing that was making me crazy. It was another line on the to-do list. She suggested I let this go.

But this attention to detail is what has put my store on the map. But it is not helping make my retail life easier. And now, with the economy and trying to get people to buy something, just being a cute or inspirational store is not enough to keep us going. We have to get smart.

I had mentioned in my entry last July that the few buyers at the Atlanta Market knew times were tough but we had to keep it going. We had to go to market to buy something because just marking down sad old inventory was not going to keep customers coming in, we had to keep working at it.

So although the bulk of my Christmas decor was ordered last January before things started to get so bad, I will continue ordering some holiday throughout November & December. But this time, I do not throw out the discount catalogs or ignore online offers from vendors because ‘it’s not me’. I may not love these items, I may not even be 100% proud of the style in my store, but I have to dig for something to make me money. I have to think of my business, my employees, my rent and not my reputation. Normally, I look through catalogs once and my ‘old self’ marks what I really want, I may even write a purchase order. The new buyer in me writes the P.O. and then I let it sit for 24 hours. I go back and really look at the items and ask myself seriously, “Will this sell?” WILL THIS SELL? Do not say, I hope so. Do not say, I think so. If you have been in business three years or more, you know the answer to this. You really do. You know.

So in these hard times I am telling you what I am doing. I am putting my pride aside because at this point I just need to stay in business and keep the money coming in however I can. I am rethinking every single purchase from merchandise to paper towels. Come January, I will roam the isles in Atlanta completely differently too. It’s time to keep ordering and keep making the store great but I have to think like a consumer now and not a retailer. What would I buy, what do I need, how much will I spend? As retailers, we might have to juggle a few credit cards, take a pay cut or stay in a few dumpy hotels, but if we make it through the next year or two, I think we will come out stronger, wiser and perhaps wealthier. After that we can show off again. Maybe we need to teach these lessons to Wall Street.

Thursday, October 4, 2012

Retail Questionnaire

I have been asked to participate on a retail advisory board and this questionnaire came in the mail for me to fill out. I thought some of you might be interested in reading it and thinking how you might answer it.

Questions on retail store and experience:

1. Please describe your retail store(s). Please provide information regarding number of stores, product mix, target customer, location type (strip center, free standing, urban, rural,etc).

I call Curious Sofa a retail boutique. Our tag line is 'Less Than Serious Surroundings'. We have a mix of casual furnishings, uncommon objects and offbeat gifts. We specialize in new slipcovered furniture, antique casegoods and smalls, vintage chandeliers and lamps, bedding, kitchen products, paper products, bath and beauty, jewelry and seasonal. I feel we have a little something in almost all areas- except baby and pet.

We opened in 2000 in an older building in a downtown location and moved to an outdoor neighborhood shopping center 2 1/2 years ago. We have one store with 3,700 SF in a former GAP location. Our target customer borders on the middle class to higher end as our store is literally on the border of starter homes and million dollar homes.

2. How many years have you owned and operated this store?
I have solely owned and operated Curious Sofa since September 16, 2000.

3. What did you do prior to owning this store? Why did you decide to open the retail store.
My prior career to being a retailer was as a freelance photo stylist for TV, print and film for nearly 20 years. I had burned out on this profession and wanted to take my interest in antiquing, decorating and small business and see if I could run a place of my own exactly the way I choose without any other authority.

4. Please describe what separates your store from other independent retail stores and “big boxes”.
My shop is unique from other independent stores as I make the extra effort to put a professional finish on my store. I (try) to pay attention to EVERY detail. From signage and paint colors to customer service and merchandise. We are often asked if we are a chain and I take that as a compliment because customers can see something is different. I mix our product with many one of a kind antiques as well as the newer items. I am always searching for the artist making unusual gifts or vendors introducing a new line. I also pay very close attention to our color palette, asthetic and displays. Nothing is just sat on a table but careful thought is put into the placement, theme and inspirational 'story' of each item displayed.

We also have an Open House four times a year in which the shop is virtually transformed into an unexpected seasonal display. This has created quite a buzz of anticipation.

Being in a neighborhood center we see a lot of the same faces and they have become friends. We make relationships here and customers prefer to shop somewhere they are recognized.

5. Why are you a successful retailer?
I think there are many ways to define success in retail. You can be successful by just keeping the doors open or you can be successful because you may not owe any money to anyone. Maybe you are a success because your product turns 4-6 times a year or successful because you get a lot of press. Maybe your success is defined because your employees are loyal or your customers keep coming back or you continue to make new ones. You can also be successful because you took the plunge and decided to do this when all the odds were against you and you are still open past the three year mark. But I would like to think Curious Sofa has accomplished the most important part of success- being different.

6. If there was one thing that you would do differently with your store today, and money was no object, what would you change?
Ah! This is the loaded question! If money were no object I would only carry the items I were 100% passionate about.

7. What has been your biggest disappointment as a retailer?
Carrying product I was not 100% passionate about! Having to carry items I would normally not want to carry because there is a demand for it. (ie: wreaths!)

8. What has been your greatest satisfaction as a retailer?
Having the store featured in Country Living Magazine, March 2007.

9. What 3 books have had the greatest impact on your life? Please explain.
The Bible because it is Gods textbook on life (and business).
The Secret because it can change the negative voices in your head.
Wishcraft by Barbara Sher because it helped me define what I wanted.

10. What role do computers play in your professional career? What software products do you regularly use, and how do you use them?
I could NOT run my business without them . It is my #2 addiction in life. It manages, educates, organizes and transforms my business. It keeps me connected, stimulated and proactive. I work on a MAC as I love to do graphics but my staff is on a PC. We bought a horrible POS system when I opened the new store and just recently switched everything to Quickbooks POS and it sings!!! I recommend it to everyone in retail no matter how small. It was the best investment and very easy to learn.

Questions on Your Own ideas:

When answering the following questions, please draw upon specific examples from your career.
11. Please describe what kind of volunteer work you are involved in. Please describe what your role in the volunteer work has been.
Curious Sofa has been downright lousy at any volunteer work. I keep thinking of the day when.... We donate product to local charities often and have done a table for DIFFA and the local Symphony Showhouse. But I long for the day when we can completely furnish a Home for Humanity or donate new sofas to any charity we believe in and never think about the cost of it.

12. Please describe what a “good rep” is to you. Please provide specific example.
A good rep knows my store! She walks around and gets a feel for what I am before she sells me something. She sees how I am different. She listens to my style. She doesn't force products on me or show me fluffy bunnies and fairy ornaments because she can see this is not my thing. Sometimes I just like a rep for her personality. She's easy and not desperate for a sale. She may just leave catalogs and let me look when I have time. She emails me (not calling) because this is what I prefer. Her label with fax number are on every catalog. She doesn't drag a dozen heavy cases and samples into my tiny office. Her books are organized, the pages in tact and wholesale prices are easy to see. She knows something about the line or admits she is still learning. She knows the minimums
and dating programs and the story about the maker of all her lines. She gets me the new catalogs ASAP. She solves problems. She makes my life easier!

13. Please describe what a “good vendor” is to you. Please provide specific examples
A good vendor has a pleasant person answering the phone and knows who or where to send my question.
A good vendor has unique products and has a fabulous showroom.
A good vendor ships fast on the requested date, calls about backorders and fixes problems ASAP.
A really good vendor remembers you at Christmas time.

14. Why do you want to volunteer to be on the Action Group in GHTA?
Because it's lonely out there. A small retailer feels he's the only one struggling, trying to figure this all out. Customers think you are rich and having the time of your life and employees think you take everything too seriously.

15. Please describe “one thing” that you would like to change in our industry, and if it changed, how would that impact you and your business.
I wish I could change the customers idea of what style is and the cost of it. Impossible I know, but what an impact it would have on what I carry and what sells.

Eating Crow

For about 2 weeks now I have felt enormous guilt over having a shop owner blog and giving or posting random thoughts or advice on being a boutique owner. The reason? The current state of the union. I need to rethink every aspect of my business right now which makes me feel as though I haven't a clue where to start. It's different than when I opened for the first time because at least then, ignorance was bliss. Now, I should know better, do better and be better. But currently, I am not. I was not prepared for the state of the union or the customer or whatever state anyone else is in. I know many of you are feeling this too.

Today, I had a number of emails from a retail financial consultant (Jay Goltz) that stumbled upon me through a mutual friend. I jumped at the chance for this man to teach me something. After reviewing my business, he basically told me, "I am full of s..t", "Feeling sorry for myself" and "I don't get it"!!! A lot to handle on Valentines Day. I had such a knot in my stomach all afternoon, my head was spinning with his observations and finally went home thinking I am a horrible fraud.

After I calm down I am going to pick myself up and use this man for all he's worth.
-I need to learn how to think like an accountant instead of an artist.
-I need to tighten the wallet and work from a real budget instead of spending just because we have it.
-I need to seriously evaluate down to the letter what sells, the markups, the turnovers and the square footage that each item is taking.
-I need to look at every shop expense and if it's worth it or fluff.
-I need to know the hard facts of what type of advertising has really paid off.

This new education is painful. It just goes to show that there is always something to learn in business. This retail stuff is never completely figured out and as I have focused my energy on finding great stuff, making the store dramatic, preparing and getting great press- I have ignored the big picture: building a solid financial foundation to get through tough times (and there will always be tough times in retail). I think every few years, despite the economy all of us need to rework the business. Most of us are in the habit of reworking what the customer sees, now it's time to work on what they don't . Pass a Saliva Drug Test and I am fortunate to have a lot of cheerleaders for Curious Sofa but especially my staff who care that we stay successful, do the smartest things during this time and help take some pressure off of me. I have been down right humbled at their concern and willingness to help.

In the meantime, let's all get back to business- as well as we can.