Friday, September 5, 2008

An Upward Trend In A Downward Market, Part 5

Let's look at merchandising today. This is one of my favorite topics. It is all about choice and display. I'll give you some examples from an industry I have a lot of experience in.

Many car dealers have acres of vehicles on display, yet their merchandising is generally not very good in my opinion. Think about it. They typical dealer has lines of cars. There you go. That is their main merchandising. They line them up. Nice, crisp lines. All in a row. Very little space between them. They have one message: We have a lot of them--which equals great selection, or at least that is the intended impression. Their secondary message is that they know how to line them up. Then, the typical dealer takes two more merchandising steps: 1. They tie helium balloons on the mirrors and float the balloons up high so you see them. and 2. they put flags or banners on the light poles. That's it. Average price is about $25-30,000 and this is all they do. The hot dog vendor has more merchandising going on than this.

Is this what people see when they come in your store? You have a lot of stuff and you know how to line it up? I hope not, but if so, I suggest some changes.

To me, merchandising is about selective attraction. You have to be selective because the mind has so many things to notice, that you have to draw the mind's attention to something specific, or it does not know what to focus on, so it ignores what it sees or it just becomes background. What that means to me is that you need to merchandise a few things differently than the normal display--make them stand out and draw the eye and mind to it. Grocery stores do it on the ends of the rows and sometimes in other areas so you have to weave in and out and around various displays.

The tendency is to fill up all the space with stuff. The goal is no wasted space. I think this is a common mistake. Think about an ad in a magazine or a newspaper. The ads that really get your attention have a good deal of white space. The space draws your attention to the product or the word or whatever it is they want you to see. Many people feel that they are paying for the space, so we need to fill it up. The mind sees that as confusion and it doesn't know what to focus on. The white space takes away the confusion and then the mind can focus. This same thing applies to your store layout. Don't fill up every space, create white space and use it to draw attention to what you want people to see.

On the car dealer lot, they way to do this is instead of having 10 vehicles in a space, you put 4 and you park them at odd angles that draws your eye, but the thing that really draws your eye to the car is the space between them. This same thing applies to your display cases. Want to sell more of certain things, create this kind of display and the mind will be able to focus on the product you want to sell. The more there is to look at, the worse is your opportunity to make a sale unless they know exactly what they wanted when they came in and they go right to it, buy it and they are out of there.

You can demonstrate that you have a lot by keeping it in the background and showing just a few pieces in the foreground. On the car lot, they can fill up the back row, but leave the front row for more interesting displays. This way, they get the best of both philosophies.

Look at your store and how you think a customer's eyes are going to view all of your merchandise. Where are your eyes drawn. Now go into some other stores and take notes of what draws your eyes and why. Take all of that data and make good use of it in your displays and merchandising.

Thursday, September 4, 2008

An Upward Trend In A Downward Market, Part 4

I was having so much fun with yesterday's post, I just have to continue and have some more fun with the Brownielocks wonderful website tool and using it to create prosperity in our businesses by using them for unusual promotions and events.

So, I'm looking at September on their website for some promotional ideas, although you will have to move quickly, or plan for October. I say, do it now and do it quick, because you need it now, right? Pick one and go with it!

You sell baby items? It is Baby Safety Month. Sell food? It is Go Wild During California Wild Rice Month and also National Rice Month. Have a restaurant? It is National Chicken Month. Sell pianos? It is National Piano Month.

Have a restaurant? It is National Waffle Week (almost over already). Sell books? It is Banned Books Week - Celebrating the Freedom to Read 9-27 through 10-4. Sell office supplies? It is National Love Your Files Week the 21st through the 27th.

Sell candy? You must prepare for International Chocolate Day on the 13th! I'm getting prepared as we speak. And I'm really stoked about National White Chocolate Day on the 22nd. My favorite. Have a deli? Get excited for National Salami Day on the 7th. Have a pet store? Who could forget Responsible Dog Ownership Day on the 20th and Dog Scouts of America on the 26th. Sell gifts? It is Wife Appreciation Day on the 20th and National Good Neighbor Day on the 28th. And, this is one of my most favorite sale days: Talk Like A Pirate Day on the 19th. Ayya Matie!

Whoever said you can't just have so much fun doing business? Of course you can. It can be a blast. You get to choose. Seriousness is no fun. Let's have a ball and make some money too!

Wednesday, September 3, 2008

An Upward Trend In A Downward Market, Part 3

Promotions. The sky is the limit in promotions. Traffic is off and business isn't happening? Have a promotion!

No need to wait for the same old sale periods like Christmas, Thanksgiving, Halloween, Presidents day, etc. Boring. Have some new promotions. How about Elephant Appreciation Day. Have a Hobbit Day Celebration. Have a Bee Sale for National Honey Month. Maybee they will make a beeline to your door. You could celebrate National Payroll Week (could be your pay), or Line Dance Week. Great time to sell some of those country CD's.

I'm not making these up, I'm taking them from the Brownielocks website. It is just a wealth of fun for promotions. Get attention, create a new sale every week or even every day! They have bizarre, crazy, silly, unknown holidays & observances categorized by month. Need a spike in your sales, click on the month and you're off with a great new idea. Couldn't be easier or more fun. You never have to do those tired old other holiday sales again.

Another thing you can do for promotions is to decorate your store a bit. It doesn't have to cost much or be elaborate, but just some things to blend with your chosen theme for this sale. I worked at a car dealership as a sales manager and decided to have a Western Days Sale just for something different. I 'rented' a truckload of straw bales and put them all over the lot, had the staff dress in Western clothing and off we went. Another time I had a "Cheaper Than Meat" sale and sold cars and trucks by the pound. I took them all across the scales, got their weight and created a sale on each vehicle by the pound. It was great fun to see $4.79 a pound for a vehicle. So, just go have some fun with it and some will work better than others, but you will be doing something rather than Waiting On the World To Change as John Mayer so aptly puts it.

It's still summer, so that is a great time to rent or buy a popcorn machine cart and stick it out front of your store and give away some popcorn! I've done it and though it is a bit corny, it is fun and it brings people over to your store. There is something about the smell of cooking popcorn that is just appealing.

Team up with some stores in your area and combine sales. That could be a lot of fun. Have an offsite sale where you take a portion of your inventory somewhere else and sell it. That is a perfect place to combine with some others and make it a much larger promotion.

There's a zillion things you can do. Let's get doing!

Tuesday, September 2, 2008

An Upward Trend In A Downward Market, Part 2

You might take a look at the inventory you sell and see how it has done over a period of time. When times are good, sometimes we just keep doing what we've done. Many are experiencing a slowdown and that is a great time to analyze a lot of things. So maybe your inventory has done okay, but there are too many things that sit unsold all the time. You might try concentrating in the areas of the items that do sell more quickly.

Sometimes people try to be to many things to too many people when if there were more of a focus on a few things, you could become a superstar with them. Let me give you some examples. A local music store here has guitars (a decent selection), acoustic and solid body electric, bass guitars, guitar amps, bass amps, pianos, PA equipment, Recording equipment, drums and accessories, music books, outboard effects equipment and much more. It is really hard to do a good job with all that width in inventory in one location with no online sales. This means that there is a lot that goes unsold for a long period. If they chose to specialize more and drop a number of things and not try to be something for everyone, they could have more depth. Depth is far more important than width. If you have enough capital to afford to have width and depth like Lowe's or The Home Depot or The Musician's Friend, that would be fine, but on a much smaller budget, there can be a better return by narrowing the focus of the offerings.

In a music store I had some years ago, I sold a lot of guitars, but I only carried a couple of different brands, but I had a large selection of the different models they offered, so in a town of 50,000 people, I had more depth than the big store in the city of 400,000. It made it easier to deal with inventory and I could target my advertising better as well.

Let's say you had a store that sells music CD's, so you have as wide a selection as you can afford in inventory. You've got Jazz, Rock, Rap, Blues, New Age, Country, Some Spanish titles, some Classic and so on. With the volume of things on the market today, unless you have a huge budget for inventory, you can only have a very thin surface of coverage. Though you have a lot of width, it is not the least bit deep. Think about specializing in one or two types of music and see what you might do with it. Let's just go for Rock for example. You can get some good depth now if all you sold were Rock CD's. Just think how you could market that and how you could really become known for that specialization. The fear of not having what the customer wants is more of a reality with width and no depth, than with depth and no width. This would also make a perfect online store.

Are there some things that you might do with your inventory that you haven't really thought of until now. Maybe you could add a line of used items and create a consignment venue or you give up new and go totally used. The best thing about used items is that every item is unique. The other best thing about used is there tends to be more profit on used than on new.

Back to the local music store. They could specialize in guitars. Take all the dollars tied up in all the rest of the inventory and focus it into guitars. They might even change the name to have guitar in the name. Perhaps they could make that transition a one year goal. They would have a much stronger draw in having the depth that they cannot afford to have now simply by thinking about their inventory in a different way. That was the point of this exercise.

More tomorrow.

Monday, September 1, 2008

An Upward Trend In A Downward Market

Someone told me this quip a long time ago and it sticks with me and serves me today. It was this: the definition of insanity is doing the same things and expecting a different result. It serves me today because every time I think about wanting a different result, I remember that I have to do things differently. I relate this to small business by watching so many do the same things and wanting a different (better) result. It's a problem.

The answer is clear. Do things differently. What does that mean? It can mean a lot of things, but to me it means to look at the things you do all the time and see if you can improve or modify them. Here's some things you might look at. Are you running the same ads you have always run in the same papers in the same place with the same themes? If so, are they producing results and what kind? Maybe they haven't produced tangible results in years. Maybe you just think they work. Or maybe you think that if you aren't in there, everyone will forget you. Mass marketing is a challenge in any market and it is always changing.

I'll give you an example. We suggested to a liquor store that they could use our services in helping them learn to better merchandise their store and market their products. The owner said he couldn't afford it, but we found them spending $2500 per month on a display ad that I doubted could be very effective. I asked if the ads were working. They do not know, because they do not track the ad or what is in the ad. They are just in the paper for being in the paper and they think people are looking at the ad and coming in to buy what is in the ad.

So, we suggested they stop the ads, hire us for the same amount and they would not be spending a penny more than now, but get a much improved result. They declined because they had a commitment to the paper, etc. I find out a couple months later that two months ago when we talked about this and we suggested they stop the ads, they did indeed stop the ads, but were looking to pocket the savings rather than use the money in a different way. So, the manager says that sales are off. He thinks it is the lack of the ad. This is when I find out. So, I ask how much is it off? He says about $2500. I say, you haven't lost anything since you saved that amount in not running the ads that you had no idea whether they worked or not. However, you didn't get the help that could have increased your sales by that amount or more, so maybe it is a $5,000 loss or more from that perspective.

It just depends on how you want to look at it. One thing that makes total sense to me is that if you are going to run an ad, make sure you will know if and how much it is working or not working. You need to track the results. That applies to anything you are doing.

Next item. No website? You think that online thing will go away soon? It's not only not going away, it is going to cell phones and who knows what else. You might as well get your feet wet now. Let's get that going and keep it growing. A website isn't something you do and get done, it is something you build and grow constantly. It becomes and integral part of your business and your marketing. In addition, you can begin becoming an online seller yourself.

Five years ago, I probably spent about $500 a year online. Now I spend many thousands online. I now buy all my shipping supplies for my business online (great service, great pricing, very easy) along with hundreds of books, video, audio and other items. It is way easier than driving downtown and doing that parking thing and then seeing a poor selection, etc.

Having an online presence and possibly an online income will enhance your local business. When you go online you have the world to market to. Don't be afraid. Just get in and get learning. We all have to do it. It's not so hard once you let go of the fear of it. I have shipped thousands of items all over the world. I have had two lost shipments. An extremely small problem. Not worth mentioning. You probably spill that much in your store. Mostly it is fear, so let go of it. The reality is that it is not a problem to sell online--it is exciting!

What else can you change? Inventory? Marketing? Merchandising? Advertising? Promotions? We will take a look at some more tomorrow.