The 7 sins of retailing

Today is the day for some tough love. It is always easier to see the flaws and mistakes in someone else’s business than your own; but no matter how unpleasant it is, it is beneficial to take the time to diagnose the failings in one’s retail business. This list has been compiled from a life spent in and around retail:

Sin #1: Not having a proposition

Proposition = price X product x promise. That is: what does the customer GET for in exchange for their money? What is the value in that exchange? (Not just monetary value.)

You have heard the old bromide that you sell the sizzle, not the steak; the hole-in-the-wall and not the drill. THAT (sizzle) is your proposition. It is not about features, it is about benefits.

How does this sin manifest itself?

·         Image ‘drift’

·         Always on sale

·         Focussing on what you have instead of what they want

Sin #2: Not having (enough of the right) stock

Timing your clearances and timing your buying is at the art and science of being true merchant.

How does this sin manifest itself?

·         Falling in love with your stock = thinking you are the customer

·         Not knowing what is selling and what is not (no proper system in place)

·         Not knowing the metric and not knowing what to do about it

Sin #3: Not presenting properly

Configuration and visual merchandising is crucial to drive retail productivity. Everyone knows that, but few people seem to understand the difference between visual merchandising and interior decorating.

How does this sin manifest itself?

·         Don’t understand the hotspots

·         Trying to manipulate customers instead of simply fishing where the fish are

·         Fail to use smart design principles to lead the sale

·         Unbalanced allocations (too much space for poor contributors and vice versa)

Sin #4: Not attracting the right customers

Not all customers are equal. If all you sell is ‘on price’, all you’ll attract are cheapskates. That is only a good idea if it matches your proposition; for the other ninety percent, it is a really bad idea.

How does this sin manifest itself?

·         Poor marketing comprising most clichés and noise, and a promise of the cheapest price

·         No Point of Difference

·         Fail to use proper psychology (not the pop-psychology of pseudo-experts)

Sin #5: Pitching price instead of value.

Customers can NOT be persuaded to buy stuff just because it is there - not frequently enough to be a viable business anyway. Retailers don’t understand the (true) cost of consumption and trade-offs the consumers take in order to do the transaction.

How does this sin manifest itself?

·         Price-only advertising

Sin #6: Not Persuading Browsers to be Buyers

Too many retailers have become lazy in their selling. It is true that no one likes being sold to, but you should still ‘help them buy’. This can be done effectively with the application of the correct techniques. A few years ago we persuaded a newsagent to allow us to experiment and we had a few days of ‘active selling’ and compared those days with like-for-like days in the previous week, month and year. The results varied between 18% and 28% UP in a business that was trending down. Despite that, they still weren’t prepared to allocate a staff member to the floor. Go figure.

How does this sin manifest itself?

·         No/slow sales growth

·         Customer Complaints

·         Walk-outs

Sin #7: Not building the system to deliver the outcome

Often people claim to have 20 years’ experience when they really only have one year’s experience twenty times over. Retailers are no exception. In order for a business to make a step-change to the next level, it has to do something different AHEAD of the step-change; that is only logical. If you merely arrive every day to make it through the day, doing approximately what you did they day before, nothing changes.

How does this sin manifest itself?

·         Tired, de-motivated owners

·         Unsellable business

The overall message may appear to be negative and critical – and it is that too. But the KEY point I would like to make is that ALL of these ‘sins’ are easily fixed – and customers will forgive you in due course. Every singly ‘sin’ is based on a decision you have taken, and each and every one can be fixed in the same way.

Simply make the decision to do it differently and follow through.

Quite easily done.

Dennis: Ganador: Making success happen