The following post comes from Arthur Corbin, talented retail & lighting wizard and faithful subscriber. He wrote it in response to Behind The Retail Scenes & Anticipating The Holidays and graciously agreed to share it here. In this article, Arthur addresses inventory, story telling, value at retail, social media, the retail experience, lighting, online and why local retailers will thrive. In other words: retail wisdom!----------------------------
Retailers (ideally) complete their Christmas planning and buying by late June. Many finalize their Christmas plans in January. Retailers use art and science to plan this far ahead in an uncertain market. Retailers are hedging their bets by ordering less and buying items that suppliers expect to have in stock through mid-November. Retailers may reorder several times as they see what is selling. Great retailers are good with numbers and sell-through is a key indicator of how well holiday buying meets customer expectations and desires.
The growing difficulty with inventory is the preponderance of last minute gift buying. This last minute purchasing increases every year. One reason for this is consumers now wait for retailers to announce sales sometime in December. This reliance on sales threatens the profitability and health of retailers. Many independent retailers depend on holiday sales for 50% (or more) of their yearly profits and cannot stay in business with reduced margins, particularly if operating costs increase during the holiday season (more labor costs in order to open for longer hours, more utility costs, more promotional costs, and more wear and tear on stores).
It is better to have a well thought out gift with purchase to reward and thank customers than to rely on discounting; there is no limit once prices are lowered.
Retailers talk about creating stories and realizing those stories in displays either on-line or in store. Example, The Night Before Christmas might feature a fireplace, a tree, ornaments, decor, music, and food. There are at least 30 items that can be sold in this aggregation of goods, chocolate drink mix, cookies, hard candies (peppermint is identified with holiday), chocolates (many types including assortments), fruit cake, gingerbread, egg nog, and custom baking are some of the food choices available.
The essential retail skill is in deciding what to buy, what quantities to buy and how to merchandise and sell what you have bought.
Highlighting value greatly simplifies the complexity of how a consumer makes a buying decision. Buying is highly emotional with all sorts of triggers, nostalgia (cards, and images of holidays past), scent (candles, and food), touch (blankets and nightgowns), vision (a predominance of green and red signals Christmas), and sound (those annoying holiday songs do get you to buy).
Value is market specific and beyond price, a fur coat has value during a Wyoming Winter but no value in Hawaii.
Retailers that focus only on price will fail. There needs to be something additional to create interest and, hopefully, some excitement.
Social media is a fancy title for knowing your customers and developing a relationship with them. Successful stores develop a look and feel that connects with their customers. This requires many elements working together to create a unique and compelling ambiance, Anthropologie is a great example of this nationally, The Gardener in Berkeley, California is a great example locally. Great stores reflect and reinforce customers' own aspirations and success stories. Great stores often have a unique and skilled entrepreneur creating the story and the execution; Alta Tingle at The Gardener is one such person. A visit to these stores will tell you more about ambiance and telling a story than any amount of writing can.
Retail is a verb and not for the faint of heart. 80% or more of retail purchases are made by women. Women have high expectations for the stores they choose to spend time and money in. Stores must have a clear identity and a consistent assortment of goods. Stores must be clean and easy to navigate. Stores must have clean bathrooms and comfortable dressing rooms. Stores must be safe and inviting. Stores must be welcoming and fun. Stores must provide an affirming environment and a heightened reality. Do all this and you have a success.
Lighting is a key tool that is greatly under utilized by retailers. Sales can be increased or decreased by the lighting of the store and the exterior of the building. Lighting invites people in when they look in your windows. Lighting directs people where to look and walk by the use of contrast and pools of light. Lighting creates comfort and safety.
Dressing room lighting is the bane of women shoppers and a few retailers have begun to take notice and have begun to upgrade their dressing rooms, but are those same retailers maintaining the cleanliness and lighting in these new dressing rooms?
There are exciting new choices available for lighting that lower energy use (up to 70%), and extend lamp life (reducing maintenance cost and time) while providing greater control over the look and feel of a store.
[Note: Arthur contributed lighting wisdom to Green Profit - Smarter Selling: Time To See The (Retail) Light by Meghan Boyer.]
Products and stores often have connections. REI connects with the outdoors. Marshall Field’s (now Macy's) connects with Frango Mints, and The Gardener connects with an assortment of carefully selected goods for the home that are timeless, pleasurable, and a joy to see and touch.
On-line is an extension of the store or a unique experience without a store. Amazon, and Zappos upended the wisdom that you must have a retail store to support on-line sales. Amazon has managed to put bookstores on the endangered list and has made the surviving bookstores much more nimble and more in tune with their customers. I see more retail products being sold online and more independent retailers closing. Retailers without a compelling identity and experience cannot expect to survive.
The personal touch and local connections are the reasons local, independent retailers will continue to thrive. Customers respond to personal warmth and concern. We all have favorite sales professionals that we depend on to make shopping easier and more enjoyable. Retailers that invest in the training and reward of exceptional sales professionals understand how important this person is to their continued success.
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Photo courtesy of Arthur Corbin.
Arthur Corbin is a retail and lighting wizard working in the San Francisco Bay Area. Arthur also teaches classes on retail success, lighting, materials, and customer service. You can reach him at arthurcorbin@gmail.com. Arthur wishes everyone a successful holiday season.
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Thank you, Arthur!
Comments, questions, observations? What wisdom would you like to share?
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- even includes several references to the importance of bathrooms - particularly clean ones - to women consumers.
