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.