Today’s headlines read “Major Retailers Feel the Squeeze from Consumers” and “Circuit City Blows another Fuse” and “CE Retail Sales Slower than ‘06.” Appliance sales have fallen with the decline of housing starts. Early reports indicate that holiday sales didn’t even reach the National Retail Federation’s conservative estimate of a 4 percent increase from last year.
News about the 2008 economic outlook doesn’t seem any better: higher gas and food prices, tight credit, slow home sales and consumer discomfort. Prices on flat panels continue to erode; furniture and appliance sales are flat at best. The sky may very well be falling.
What’s a retailer to do?
Some will hunker down and adopt a defensive posture. They’ll cut spending, particularly on advertising, training and capital improvements. They will try to wait out the storm comfortably moored in the harbor.
Others, though, will choose not to succumb to the downturn. They’ll say “no” to the declining or flat sales forecast. They’ll stop believing everything they read. They’ll take advantage of the fact that CompUSA is shuttering its stores and that Circuit City laid off 3,400 of its best sales associates.
Organizational psychologist J. Mitchell Perry writes, “When you convey an optimistic attitude, you gain more control over yourself and get more from your staff and co-workers.” What you say and how you say it affects what you do and the results you see. Negative talk – “There’s nothing I can do about falling prices and slow traffic to my store.” - inevitably leads to powerlessness.
If, on the other hand, you want to succeed in tough times, it will take more than a positive attitude to reach your goals. Here are some tips:
– Look your best. Detail every inch of your showroom. Make sure products are properly connected and polished. Clean your parking lot and change defective light bulbs.
– Target your marketing. Create top-of-mind awareness. Send special offers to your most profitable customers. Contact customers who bought big screens last year about adding audio or networking their systems. Use direct mail. Collect email addresses from customers and send new product announcements and helpful “how to” hints.
– Beef up your training. Conduct store meetings on improving customer service and customer-focused selling skills. Use learning programs produced by your buying groups to ensure your associates are truly experts. Start a company book club.
– Add one item to each sale. Track the average number of items sold per ticket. Add one cable, one pair of speakers, one service contract, one accessory or a disposer to each transaction. Try to add a matching dryer to each washer sale or a lamp with a sofa.
– Step up. After questioning each prospect to determine their needs, show a product a step above one you might usually choose to demonstrate. Explain the benefit of the more fully featured model and emphasize the lifetime value of the product.
– Improve your close rate. Fewer shoppers mean you’ll have to do a better job with those who do come in. Track your conversion rate: the percentage of prospects who actually make purchases. A five or ten percent increase will yield significant bottom line profits.
– Communicate with your team. Be honest, but don’t exaggerate your disappointments. Show your associates your planned promotions. Ask for their input and for their ideas. Set realistic monthly sales goals and regularly post performance results. Be a better listener.
– Sell value. Price your floor competitively so that customers don’t have to haggle to get the best price. Discounting undermines your value proposition and sends consumers out to shop your price. Offer a price guarantee in your marketplace and make good on any needed refunds quickly and painlessly.
– Sell services. Best Buy’s Geek Squad charges $100 to go out to a customer’s home and design the layout for a home theater system. They’ll set-up-not install-a new system for $200. Certify your installers. Charge for delivery and haul-away of old products.
– Control your assets. Track inventory closely. Don’t let aging receivables cause a cash flow crunch.
– Celebrate success. Reward your team for their efforts. Write thank you notes. Take associates to lunch. Remember birthdays and employment anniversaries. Find and hit each team member’s individual hot button.
For some dealers, the year ahead may look grim. Some will be fatalities of the housing meltdown and falling consumer confidence. Others, though, will be winners in the battle for market share and share of wallet. The choice is yours: victim or victor?
