Talk About a Time Crunch!

Well, the calendar seems to be wreaking a little havoc for retailers this year. 

First, Labor Day was “late”; that is, on  September 7 instead of the 2nd or 3rd.

• That meant that the Back to School shopping that often occurs in August was pushed into September.
• Plus, it was delayed even further by today’s shoppers, who seem to prefer “grazing” – our name for the tendency to shop closer to need – instead of concentrated shopping trips.

Next, looking ahead: Thanksgiving this year is also a little "late", on November 26. And, Christmas is on a Friday.



Why does this matter? Because Christmas Eve is just four weeks after Thanksgiving!

• This means the fewest number of weekends - three! - between Thanksgiving and Christmas.
• But, with Christmas Day on a Friday, that allows 2 full weekend days for those after-Christmas sales and returns.

Who Will Be Impacted?

Which retailers might be affected the most by these calendar-based realities? Online merchants!

• It’s very likely that in a time crunch, customers will choose to do more of their shopping online, which puts increasing pressures on online merchants to meet delivery-by-Christmas schedules.
• And this is happening as some of these larger retailers are facing difficulties finding seasonal workers for their warehouses.
• Turns out that with employment rising, there simply aren’t as many folks willing to accept the demands of a warehouse job on just a short-term, seasonal basis. Hmm. Christmas shopper beware!

Meanwhile, even if your retail operation is more bricks-n-mortar than online, this calendar crunch still may affect you. Here’s how.

• Seasoned retailers have observed that in-store shopping surges as each delivery-guaranteed-by-Christmas order date deadline is passed.
• Make sure you know what those key deadlines are. Be prepared to reap the most benefit. Be proactive in scheduling your staff in anticipation!

All in all, the rest of 2015 promises to be pretty hectic!

Straight Talk from Retailers About Social Media "Effectiveness"

"Social Media". It's all around us. But what retailers want to know is this: "Is it effective? That is, does it raise sales?" 

So, we asked, and retailers answered. Did they ever! Retailers indeed are very active with social media! 

And we also confirmed that retailers – at least, those who responded to our survey – are very focused on accountability. They too keep examining "Is it working? Is it effective? Is it driving sales?!?" 

The survey gathered two kinds of feedback:

1. Effectiveness ratings about each social media platform (from "Very Positive!" to "Not At All");
2. Comments from the survey respondents (1/3rd of whom are multi-store operators). 

You can see all the findings here on The ROI site, including:

• Verbatim recaps (yes, including those smartphone typos)  explaining why or why not social media is "effective" for retailers.
• Explanations behind the ratings for each platform on the key question: "How has it INFLUENCED SALES?"
• And, of course, the full results from the survey (Which promotional tools have declined in use? Is social media paid advertising being used? And more real-world insights and observations.)

We were certainly intrigued to see how and why independent retailers are using and/or experimenting with social media. We think you will be too.

Go here on The Retail Owners Institute® site for all the info.

Mid-Year Review: Here's Where to Look to Find the Surprises...and the Award Winners!

The end of June and the official start of summer is a great time to reflect on how the year's going so far.

And, just as a reminder that we DO "practice what we preach", we share with you one of our conclusions from our own mid-year review:

"Okay, Co-Founders. It's time to face reality.
You're not exactly rocket scientists."

So, all right. We cannot ALL be rocket scientists! Let's therefore pivot our thinking , and focus instead on how to recognize what HAS been accomplished!

For instance, think about your stores, your departments, your merchandise categories, even your vendors(!) Which ones  merit some "awards"?

No, Not About People This Time

While we typically think of people as recipients of recognition – and we trust you already are doing that, right? –  this is a different challenge.

This is a fun way for Owners to take a new look at your store's performance. Take advantage of all the analysis your POS system can offer you. We are confident you will find some surprises!

Of your merchandise, for example, which products are Award Winners?! Which would qualify as...

• "MVP, Most Valuable Product"? (Hint: GMROI provides good indicators here)
• "Rookie of the Season", e.g., Best New Product? (Is it what you expected?)
• "Most Unsung Hero"?, or, the most unexpected top-performing product. (Who saw that coming?) 
• "Most Deserving of a Farewell Tour"? Oops, under-performing once again. (Sidewalk Sales, here we come!) 

Now, Take Another Look at Your Vendors

Once you've reviewed your POS reports for products, take another look at them, and do the same analysis for your vendors. Really! There might be some real surprises there!

• How many of your vendors are "award winners" for your stores?
• Which vendors have the the best GMROI for your operation?
• Which vendors are responsible for your merchandise "Award Winners", your Rookies of the Season merchandise? Your unsung heroes?
• About that merchandise most deserving of a Farewell Tour; any concentrations among certain vendors?

Again, the goal here is to do a mid-year review from a little different perspective.
You WILL find some Award Winners! (And, some surprises!) What better time for them to get the recognition they deserve?

Restaurants: Look at Their Financials

Much of the world regards restaurants as retailers. And in fact, they are; they sell to the ultimate consumer. 

The Restaurant Sector, and its four restaurant "segments" defined by NAICS, has been added to Key Financial  Benchmarks section of The Retail Owners Institute®. 

Now we can get perspective on their financial performance. Whether they offer sit-down dining, fast food takeout, or are a neighborhood cafe, brewpub or juice bar, all have telling financial vital signs. 

And they are fascinating!

Here are some of our immediate takeaways as we examined the Five-Year Charts for these Restaurant Segments:

Higher Profits
Overall, the median-performing restaurants enjoy higher pre-tax profits than median-performing retailers. Pre-tax profits for the restaurant segments range from 4.1% to 7.3%, well above the retailers’ average profit of 3.5%. 

High Margin Businesses
Any wonder that some retailers are incorporating snack bars and/or beer, wine and even liquor bars in their stores? Changes the in-store experience, keeps customers there longer - and has sweet margins!  (Plus, they can absorb the operating expenses versus a stand-alone operator.)

But…Cash Crunch
The Current Ratio for these 4 restaurant segments is grim. Very grim. For each dollar they owe in the next year, they have less than a dollar in current assets. They are constantly in a cash crisis. 

Hmm. Is it any wonder that many “alternative lenders” welcome cafes and coffee shops as their customers?? 

And, Lots of Debt
That on-going cash crisis may explain why the Restaurant Sector has such breathtakingly-high Debt-to-Worth ratios. (And remember, as you look at the Five-Year Trends, the improvements - that is, the decline - in the Debt-to-Worth ratio is likely due to seeing the numbers for only the survivors, those places that are still in business.)

Revealing, Aren't They?
Yes, restaurants are retailers. But the overall financial picture of restaurants is decidedly different than most other retailers. 

To take a look for yourself, and see how your conclusions compare, go to the Restaurants Sector of The ROI's Key Ratio Benchmarks. Review all of the Five-Year Trend Charts for these restaurant segments:

• Snack or Juice Bars, Espresso Bars
• Limited-Service Restaurants
• Drinking Places (alcoholic beverages)
• Full-Service Restaurants

Seven Retail Trends: How Are They Affecting Your Retail Operation?

Are You Leading? Following? Or, Scrambling to Get Out of the Way?

We recently were asked by the owner of a mixed-use development to identify prospective retail tenants. This landlord wanted to be proactive in seeking tenants, rather than just passively choosing from the inquiries they were already receiving from various brokers.

• Our take-away from our initial meeting was that this commercial property owner wanted to “skate to where the puck is going to be”; to anticipate what kind of retailer would have some appeal – and some staying power – in their property. (How cool is that?!?)

One of our first steps for this project was to recap current retail trends, in order to identify retailers from each sector of retailing who were on the leading edge of embracing one or more of these trends.

Seven Retail Trends - and Three Questions - For Your Consideration

Meanwhile, we invite you to consider seven of the trends we focused on. As you do that, keep three questions in mind:

1. Do you agree that this is an important trend?
2. Where is your retail operation vis-a-vis each of these trends? (Leading? Following? Getting out of the way??)
3. What about your competitors or neighboring retailers: which ones of them are evidencing these trends? (And what does that mean for raising the consumer’s expectations?)

“Smaller Is Better”
Retailers of all sizes want less square footage, are developing smaller format concepts, etc.

Urban Infill
In large cities, this is happening as more people live downtown, whether the Millennials or the down-sizing Baby Boomers. But, this revitalization of shopping districts also is happening on Main Street locations in communities of all sizes.

E-Commerce Expands Offline
Formerly e-commerce-only sites (think Warby-Parker, Birchbox, Zappo’s) are launching “offline” (e.g., bricks-n-mortar) locations as well.

Here Today, Gone Tomorrow
The pop-up shops that appear seasonally - thus avoiding the profit-draining costs of a year-round location - continue to gather steam. Some landlords are systematizing this practice by offering only temporary, short-term leases, with a constantly rotating and refreshing collection of retailers.

Retail on Wheels
Retailers have watched the food truck phenomenon, and are adapting! Hello, Fashion Trucks!! These retailers can alert their customers to their locations via social media.

Provide Experience
To attract customers into a store, retailers are focusing on the overall “experience”. In some cases, this involves expanded food service, or full-service bars that resemble hotel lobby bars. Whatever it takes to get the customer to linger longer.

Integrated Technology
The use of in-store and interactive technology - whether to connect to a customer’s smart phone, engage them with interactive digital displays, or offer “Magic Mirrors” that are “virtual dressing rooms” - is increasingly available.