Business-Altering Tactics


Sixty eight percent of customers will not come back to a store if they perceive the store management or associates to have a bad attitude. The adage "The Customer is Always Right" has never been more powerful in retail. Leading-edge retailers are taking that to heart and improving their businesses by finding productive and innovative ways to keep consumers happy.

Some of the following "tactics" may seem matter-of-fact, but the number of retailers who don't pay attention to these issues is alarming. Many retailers are so focused on the business infrastructure that they don't take into account their most important assets: the customers.

1. Know the Store Real Estate

The first 18 feet of the store can determine whether or not you're going to keep that customer. It is the place in the store where you have the most traffic on any given day and it is your best opportunity to sell. To win that first 18 feet, put your best sellers front and forward.

2. Change Your Store Every Day

Customers will habituate which leads to boredom and disinterest. At that point they may find a new store or they may just come in to your store to buy certain regular items. You've then lost the ability to cross-sell or up-sell those customers. To combat shopper fatigue, change the store every day, move items and update signage.

3. Assign Housekeeping Tasks

In the words of Ray Kroc of McDonald's: "If you have time to lean you have time to clean." In other words, don't ignore the basics of how the store looks every day. Customers judge us in the first 20 seconds they are in the store. One simple way to monitor your store's look and feel is to actually take photographs and review them.

4. Use Average Transaction Data

The key measure of productivity is sales per employee based on average transactions (AT) and items per transaction (IPT). This information can be used to motivate the sales force to practice suggestive selling.

5. Increase Your Conversion Rate

There's no excuse for not using a traffic counter to compare apples to apples within your store environment. This will help you determine the proper staffing requirements per customer per hour each day. Lack of staff can cost you a substantial amount of revenue in lost sales. Do the math: if your weekly traffic is 600, your conversion rate is 25 percent, and your weekly sales are $6,750, you can increase sales to $7,560 by increasing conversion by just three percent. And if you augment the average sale by just $10, from $45 to $55, your weekly sales will be up to $9,240. That's a 36 percent increase in sales with the same store traffic!

6. Display Related Merchandise

Particularly in self-serve departments, displaying cross-selling opportunities will upsell customers. For the greatest conversion to sales, make it as easy as possible on the customers: package groups of items together and price it as a package deal. It is like suggestion selling for dummies!

7. Evaluate Store Systems

While closely maintaining the POS system and other technologies in the store, don't ignore manual systems that determine how the store functions; you may find that you don't have a system in place where you need one. Bottom line: continuous improvement is the key.

8. Use Bounce-Back Programs

Today's fickle consumers are easily swayed into shopping at other stores. Give them a reason to come back to your store by offering bounce-back promotions and coupons. Form strategic alliances with non-competitive businesses. When marketing these offers, use dollar savings rather than percentages. Consumers are no longer impressed with a 10 percent or 25 percent savings. You might not turn their head below 75 percent. Actual dollar savings is a simpler formula that really hits home in consumers' minds.

9. Know Your Competitors

You know you do things better than the competitor down the street, but avoid becoming complacent. Go behind enemy lines at least once per month, and measure something different each time: display, service, inventory, pricing, associates' selling skills. In fact, it's a good idea to get store managers and associates involved in this process.

10. Compete with Better Staff

Too many retailers keep unproductive and ineffective employees on staff, while falling short on rewarding the most productive employees. In truth, one great employee is worth more than three marginal employees. Don't be afraid to fire people if they don't perform and reward your top performers - pay for performance! Be attentive to employee productivity from day one: hire right, train right and motivate right.

11. Clear Old Merchandise

Are you running a museum or a retail store? If it's been on the shelves for six months, it's time to refresh with new merchandise. If you still think a product might move, place it in a more prominent location in the store for a period of time - make the old look new. If it's still not moving after 12 months, get rid of it!

When planning your tactical strategies, don't try to implement all 11 tactics at once or you'll set up your team for failure. Start with one or two and work your way through them.

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