Thanksgiving Day Store Openings...Really?!

The announcements of retailers with plans to open on Thanksgiving Day just keep coming. We have a few thoughts about the disintegration of the sanctity of Thanksgiving Day. But first, some background.  

Every retailer is keenly aware of the slow-to-revive national and international economy. Currently, as we all are probably aware, the results for retailers are decidedly bifurcated.

• The deep-discount, low-cost operators are generally doing okay;
• the high-end luxury retailers are getting considerable publicity as they continue to out-perform the economy.   
• But where and why is the crunch?

The big picture looms up: mid-priced retailers (a very vague description, granted) are stepping all over each other.

There is an abundance of excess product available, a general lack of specialness, and with an all-time high of 23.1 square feet of retail space per capita (highest in the world, by far), the crunch on the mid-range retailers has become an ugly sight.

So, what does that have to do with Thanksgiving Day store openings? Our sense is that the retailers who have announced Thanksgiving Day openings are the most crunched.

They are seeking any potential advantage that they can. We don't blame them for it, but it is a sad and telling sign.

Moreover, they are chasing market share (a bit like chasing a mirage.) "If we aren't open, we will lose volume to our competitors."  But at what cost?

Our message to you won't be a surprise: Keep the perspective! How to do that?

Your retail operation should always be observing your surroundings and competition. But, never get caught up in the media hype or the herd mentality ("Everybody else will be open.")

Instead, keep your focus on your very best customer. Ask yourself, "Would they really care whether or not we are open on Thanksgiving?" (Our guess in most cases: Probably not.)

Meanwhile - sigh - will store openings on Christmas Day be next??

How to "See" Your In-Store Traffic Patterns - Free!

Yep, there's an app for that! 

Here's an FYI for you: we recently discovered a "time lapse" app to use with the camera of a smart phone.

• With your camera phone set to video mode, it automatically snaps the shutter at whatever time interval you set.
• Then, when you watch the video, it has condensed the action that occurred over hours into minutes.
• And best of all, it can be FREE!  Just search for "time lapse" on your app store. 

We can think of lots of ways for retailers to take advantage of this "in-store traffic copter".

• Which way do people turn when they come into our store?  
• Do folks hesitate once inside, not knowing where to go? 
• Which displays attract customers?
• Which ones do they seem to disregard?
• How many shoppers actually get to the back of our store?
• And, this one is fun: how often do we see our sales staff actually moving away from the cash wrap??

Pictures ARE worth a thousand words  

These time lapse sequences can highlight all kinds of opportunities in your store. Plus, they can help yourecognize any trouble spots.  

Then, after you've made some adjustments, do another time lapse study to see whether that helped!  

It's free (well, some apps are free.) It's fun. And it's a great way to involve your staff as well.  Just check on any of the app stores for "time lapse". 

Retailers...Don't Be MYTH-LED!

As Retail Strategists, we follow retailing trends and their impacts on 55 retail segments. In so doing, we've identified that some of the accepted "truisms" in retailing actually are myths. We are exposing them as myths, to prevent retailers from being myth-led.

Here are three examples:
Amazon will eventually run all retailers out of business.

Don't Be Myth-Led! The customer has the final say. 

Until Amazon solves the fact that 90% of customers want to touch, feel, test, try on or taste before buying, their growth from retailing will be limited.

Because of the soft and disappointing Back-to-School sales, 2013 Holiday sales are commonly predicted to be lackluster.

Don't Be Myth-Led! What matters is how consumers are spending.

BTS results were affected by the uptick in sales of homes and cars. In November and December, houses and cars will not suck disposable dollars away from Holiday spending.

Struggling malls can be turned around as the economy improves.

Don't Be Myth-Led!  Probably 15-20% of them have no future as malls.

How to get the highest and best use from that real estate? Retrofit them into retirement homes!

Is Cash Going the Way of the Rotary Dial Phone?

In many stores, cash registers already have gone the way of the rotary dial phone. Is cash itself the next thing to go?

One merchant we know had a customer pay for a very large purchase in cash. Literally.  Stacks and stacks of $100 dollar bills! 

It was such an unusual occurrence (and such a substantial amount of cash), he actually posted pictures of the cash on his Facebook page! (And then nervously walked the deposit to the bank.)

The Mobile Payment revolution is just beginning

Keeping up with accepting cash, checks, credit cards and debit cards is just part of doing business as a retailer.

And now, the ever-expanding capabilities of technology, plus shoppers' growing comfort level and confidence with online payments and virtual payments, has opened up the floodgates of new ways to pay that do not involve a traditional account from a financial institution.

For example, some retailers accept "payments" when the customer provides their phone number and PIN. The retailer receives "payment" without seeing a bank account or credit card account number. 

Instead, that "linkage" has occurred between the customer and their payment processor...which is not necessarily a financial institution!

With this new technology comes a new wave of companies eager - and able - to be the new payment processors. 

The social media platforms, retailers, technology firms, telecom companies and others - Amazon to Apple, Google, Facebook, Square - are leveraging their customer base, their Big Data, and their rapid-fire pace of innovation.

• For example, last  week it was announced that Intuit and Square have teamed up to allow merchants to quickly link their transactions via Square to their QuickBooks accounting.
• And, PayPal (eBay subsidiary) acquired a mobile payments startup - Braintree - for $800 Million, as they try to catch up in the mobile payments world.

Meanwhile, some retailers scoff at the notion that customers will pay via their smartphone or some kind of electronic wallet. 

• They cite studies such as this: 63% of Americans use their phones for only two things: talking(!) and texting. 
• Most customers, these retailers reassure themselves, will need a lot of education and preparation for the "mobile payment" revolution. 

Actually, that education has begun! Customers learn by doing. They're getting their practice at places with high volumes of small transactions (think Starbucks). Then, when they are trying to pay for higher value purchases (think your stores!), they expect the same level of  technology sophistication.

Postponing these changes and adjustments in stores is not the answer. Retailers have no choice; they must be accepting of these technology "advances", in order to keep pace with their customers' expectations. 

The harsh lesson, once again: Even if it is an arm's race that just keeps escalating, you must keep up with the flow of technology...or get run over!

Deciding Where & How to Cut Inventory?

"But, I Can't Sell from an Empty Wagon."

Obviously, there's truth in the basic retailing maxim that "you can't sell from an empty wagon." If you don't have an appealing assortment of goods your customers need, they have no reason to visit your store. 

However, today, you may have to redefine "full wagon". 

Here are some questions to ask about each item added to your store:

Q. Can my customers get this item at other stores in my market area?
Yes?  It probably has no pulling power.

Q. Is this a good margin item, or is it subject to a lot of price competition?
The latter? Slow turners with weak margins are double trouble.

Q. Does having this item in stock help me sell other higher-margin merchandise?
No? You may not need it.

Q. Can I get faster delivery on this item than I am now getting?
Yes? Sweet! You may be able to cut back on your stock.

Q. Do I order larger quantities of this item than I actually need in order to take advantage of price breaks?
Yes? Be careful! You may be coming out on the short end when you figure in all your carrying costs.

Q. Do I have an emotional attachment to this item that reflects my personal taste rather than a business-like response to my customer's desires?
Yes? Get rid of it!