Ever Found Yourself in Bed with a Mosquito?

Within a couple blocks of The Retail Owners Institute's offices is a major international apparel retailer. This retailer's 10,000 sf store is on a prominent corner location. We walk past this store 3 or 4 times each day.

And to be honest, we have been underwhelmed by their displays, both their windows and their instore displays. Tired. Uninspired. Repetitive, as they "anniversary" each season. In a word, boring! 

Then, about two months ago, an independent retailer of high-end women's apparel - that is, the same price points as the international retailer - opened a 900 sf shop right next door. 

But oh, what a difference!

• This shop has nearly a dozen mannequins in the windows and on the sales floor.
• They change these displays at least every other day, if not daily!
• The lighting is "spot on", as they say!
• The windows are sparkling clean, inside and out.
• Your eye is drawn to the merchandise, especially from the sidewalk outside the shop, and even from the cars driving by.

This retailer may not be big, but they definitely are a pro! 

So, guess what happened?  Yep, the international retailer recognized they were being outclassed. By a "small retailer", no less!  Yikes!

Here's the really good news:

In the past couple of weeks, suddenly the international retailer began making noticeable changes and even improvements to their window displays (especially along the shared streetfront).  All at considerable expense, we would guess.

And, since these new displays have gone in, they also have changed them at least once a week! Progress!

Hats off to the independent retailer who is doing such a fine job of visual merchandising. Customers must love it! Top line sales growth surely will follow.

And kudos as well to the international retailer, for recognizing that they cannot just rest on the laurels of their brand name. They are working on being a "fast follower". 

Professionalism in retailing is not a function of size. 

Independent retailers have wonderful opportunities to provide leadership in many ways. And in doing so, they are raising the bar for all retailers.

As Anita Roddick, the Founder of The Body Shop, so famously said:

"If you think that being small means you can't have an impact, try going to bed with a mosquito! 

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For more (FREE!) ideas on how and where to add excitement to your store, check out The ROI's exclusive Store Rater. click here

Are You Ready? Banks - Especially Community Banks - Are Looking for Good Retailers as Customers

Those plans to grow, expand, update and upgrade that have been on hold for the last few years, due to lack of financing? They may once again be pursued!

Now is an opportune time to reach out to your banker to get the financing you need for your business.

"Data from the Federal Reserve show banks are more willing to lend and their customers are seeking more credit as both groups gain confidence in the economic outlook," according to Bloomberg News. "Easier access to low-cost financing means retailers can expand outlets and hire the staff to run them."

"Community banks participating in the Small Business Lending Fund (SBLF) have consistently increased small business lending over the past two years," said Deputy Secretary of the Treasury Neal Wolin. SBLF encourages lending to small businesses by providing capital to community banks on an incentive basis: the interest rate the banks pay is reduced as the bank increases its lending to small businesses.

Remember, it is not just retailers who have had to make adjustments in recent years to survive. So have the banks. They too are having to be far more competitive.

Even better, there are tools available to you that help to level the playing field when it comes to doing business with one of them. Here are a few to get you started:

1. First, remember that you are interviewing them!

You are looking for a lender you can work with, who respects you, and most of all, who deserves to have your business. Find someone who wants to earn it!   

2. Make a "performance based" short list of banks to interview. 

Don't limit yourself by geography. Your goal is finding a bank that understands your business. 

• Be sure to include one or more Community Banks. Go here to use the Community Bank Locator. Just enter your ZIP code, and immediately get contact info on the nearby community banks.
• Also, go here to see the Treasury Department's map and list of all Small Business Lending Fund participating banks. (That's the  incentive program described above.)   

3. Check their "grades" for Small Business lending!

Yep, banks are like any other business; see which ones make the grade! 

Go here to see the "banking grades" for Small Business lending of each bank you are considering. You can search by ZIP code, city and state, or bank name.      

4. Put together your loan proposal - and your cash flow projection.

The key: not only showing what you would do with the money you borrow, but having the cash flow plan to show when you can pay it back!

• Go here on The ROI site to see the checklist of what a Loan Proposal should include.
• Then, use the online 3-in-1 INTEGRATED Calculator  to do your own cash flow projections. 

Chasing Sales to Raise Cash? Oops! How to Avoid that "Fateful Fallacy"

If you ask retailers, "What's the best way to improve cash flow?", almost every one of them will answer, "Raise sales!"  

Consider this retailer, who contacted us a few weeks ahead of his largest vendor putting him into bankruptcy:

"There's something wrong here. My sales are up in all three stores, and we had our best profit in years. But, I can't pay my bills on time."

That owner suffered from not knowing that profits and cash flow are NOT the same.

Plus, raising sales in an attempt to solve a cash flow problem may actually worsen cash flow! (Sadly, that's exactly what happened to that now ex-retailer.)

How to avoid this fateful - and potentially fatal - fallacy? Follow these 4 steps.

1. Understand the cause-effect connections of the financial levers in your business.
2. Focus on the controllable variables in your retail business, especially inventory.
3. "Turn on your financial headlights!" Use The ROI's online 3-in-1 INTEGRATED Cash Flow Calculator.
   Use it to play"what if...?" with different sales plans, margin assumptions, and turn rates. 
   See in advance which combinations will get you the outcome you want.
4. And remember, in a crisis, if you have to choose between profits or cash, always choose cash!   see more

Retail IS a Mirror of Society

We just read about a high school class of 15 students, plus their teacher, that went into an Apple Store. Each student had a gift card from the school to purchase a MacBook. And, each transaction was to be handled separately.

The employee then discovered that the students were "speaking" to each other in sign language. They were from the nearby school for the deaf.

So, the employee used a laptop on display to exchange brief typed messages with each student, and processed each sale individually, as requested (without the teacher serving as "translator.")

Here's where the story takes an unusual twist.
A couple hours later, the employee went on his lunch break, going to the food court in that mall. And who should he see there? 

Yep, the high school class. All talking to each other. Out loud! No sign language!

The students and the teacher spotted the Apple employee, and called him over to their table. It was true that the school was paying for all of them to get MacBooks. But, the students are not deaf.

Seems they were conducting an experiment. They were spending the day at the mall. They had pretended to be deaf, and gone store to store to see how they would be treated.

Their discovery? In their words, almost every store treated them terribly, clearly preferring to be done with these "deaf kids" as soon as possible. 

In fact, no other employee in the mall had even grabbed a pencil and paper in an attempt to communicate with them.

Quite the "Mystery Shopper" experience, isn't it? 

Might this make an interesting discussion topic for your next staff meeting?

• How should we treat people who "are a little different", as the Apple employee described them?
• And, how should we feel about being part of "an experiment"? Just because we work in a mall, in a store that is open to the public, does that mean retailers should be "fair game" for someone's sociology experiment?

We believe that "Retail is a mirror of society." And this is just one more example.  

Click here to go to the original blog posting, and read more details.