Stealing their hearts and minds

Who goes to the grocery store to buy, well, groceries? What we want is DINNER! 

But, can you go into a grocery and find “dinner”? Or “breakfast”? Or, “great lunches”? Not very easily.

• Instead, there is a produce section. And then a canned goods section. And then the frozen foods section. All with an overwhelming assortment of choices, whether it is mustards or pickles or pasta or….
• Plus, it takes a lot of time to navigate all the aisles, avoid the other shoppers and carts, and then check out. Which may be fine for those who do grocery shopping for the social experience as well as getting their groceries. But for many time pressed folks...

That's why the true disruptions in the grocery industry aren't coming from smaller format stores, or even grocery delivery services. Instead, the meal-in-a-kit services – e.g., Blue Apron, Plated, HelloFresh  – are far more disruptive. 
Why? They solve the real problems of many customers.

• Here's how: Folks sign up online; they receive a special  icebox on their doorstep containing the fresh, raw ingredients for 3 to 5 meals, all in the proper proportions (whether 3 tablespoons of cooking wine or 1 carrot, there is no wasted food or languishing jars of spices); step-by-step instructions (with pictures) are included; customers do the assembly and cooking, and in 35 minutes or so, sit down to a home-cooked meal.

All without the time-consuming demands of meal planning or traditional “grocery shopping." No fuss, no muss, no waste.

• Remember, “value” for customers is "benefits received for the burdens endured." In our view, these meal-kit delivery services are delivering great burden-reducing value to their customers! And, they are reinventing (or "disrupting") the grocery industry in the process.

Time to think beyond Amazon?

We believe this offers, ahem, much food for thought for all retailers. As you consider how to serve your customers better and stay ahead of competitive pressures, it's time to think like your problem-solving customers.

1. What problems are they trying to solve?
2. Anything keeping them from getting those solutions from your stores?
3. And in today's "new normal", who IS solving your customers' most important concerns – and maybe stealing their hearts and minds as well?  (Hint: as grocers are finding out, it may not be Amazon!)

Finally! The 4th Quarter is HERE

October 1 marks the beginning of the 4th quarter of the calendar year. The beginning of the home stretch. And yes, there is good reason for retailers to cheer. Consider:

Halloween will be HUGE 

According to the National Retail Federation, Halloween spending is expected to reach a record high of $8.4 Billion on costumes, decorations and candy.

• More than two-thirds of Americans plan to buy costumes this year. For themselves, their kids, or their pets!  
• This year’s most coveted costume? As reported by the Washington Post, “So far, it’s superheroes across the board: For kids, for adults, for pets,” said Lorenzo Caltagirone, owner of Total Fright, a year-round costume shop in Arlington, VA.
• After 11 years of being the most popular choice, princess costumes have been dethroned. “The female superhero in particular has really taken off. This is the year of girl power.”
• Political costumes rank third on the list of popular options for adults 35 and older, bested only by more traditional witch and pirate get-ups.
• About those costumes for pets? Pumpkins, hot dogs, and bumblebees. 

The Election will be OVER!

And so will the election angst.

• According to CNBC News, “If history is any indication, retailers could see a double-digit sales lift in November and December, as shoppers focus on the holidays and release pent-up demand.”
• This post-election sales spike is likely to occur no matter which candidate wins.
• According to analysis by Alix Partners, “in the 2004 and 2012 presidential election years, year-over-year sales growth slowed an average of 22 percent in September and October, as compared with the prior eight months. It then bounced back an average 16 percent in November and December.” 

Despite the Hanjin Shipping bankruptcy, merchandise WILL be in stores for holiday

• According to the National Retail Federation, “import cargo volume at the nation’s major retail container ports should be at near-peak levels for September.” While much merchandise is still in limbo, “retailers are working hard to make sure it ends up on store shelves in time for the holidays.”

What Black Friday surprises this year? How About The NEW Normal?

• Remember last Thanksgiving? Some retailers stepped back from opening on Thanksgiving Day. REI made news by closing its stores on Thursday and Friday.
• How does all that affect customer expectations for this year?
• And what approach are you planning for your stores for this year? 

Not easy questions. But a sure sign that retailers may indeed be able to get back to The NEW Normal.

Ahh Yes, Christmas

This year, Christmas Day falls on a Sunday.

• That means offices that typically shut down starting at mid-day on Christmas Eve may instead be doing that on Friday the 23rd, inviting a late shoppers bonanza.
• Of course, the After-Christmas events will then start on a Monday. How convenient!

Wow, what gifts! 


Especially in retail, timing IS everything. Enjoy the arrival of this year's 4th quarter.

"Entry Exam" for New Items in Your Stores

Question: "We must keep bringing in new items. But, how do we keep from being over-bought?" 

Answer: "Very carefully!"

Ahh, the appeal of new items. Or, your customer's ever-growing "wish list" items. But, when you are also trying to control inventory, and keep turns up, the challenge is, "Really, which should you buy?" 

• As many retailers are only too aware, if you are not vigilant, you may experience bloated inventories, which can cascade very quickly into cash flow problems.

Here are 6 key questions for you and your buyers to ask yourselves as you consider new items. We think of it as an "entry exam" for merchandise. It's a very quick way to identify which items actually deserve to be in your store.

#1. Can my customers get this item at other stores in my market area? 
If yes, it probably has no pulling power.

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

#3. Does having this item in stock help me sell other higher-margin merchandise? 
If not, you may not need it.

#4. Can I get faster delivery on this item than I am now getting? 
If yes, you may be able to cut back on your stock.

#5. Do I order larger quantities of this item than I actually need in order to take advantage of price breaks? 
If yes, you may be coming out on the short end when you figure in all your carrying costs.

#6 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? 
If yes, get rid of it!

Go here in the Library for Owners at The Retail Owners Institute(R) for more useful and practical insights and tactics about protecting your store from inventory bloat. See how quickly you can achieve greater control of your inventory!

New items? Oh my, yes. 

Too much or too many? Not any more!

What your customers really like about your store might be...your customers!

Recently, we heard how the cafe/bar in the recently-opened Whole Foods store in downtown Los Angeles had a live jazz combo playing on a Friday night. "And the place was packed! Can you believe it? All the cool clubs in downtown LA, and people come to the Whole Foods for live music?!? A grocery store??"

Actually, yes. We CAN believe it. Here's why.

• These folks trust Whole Foods because of the customers it attracts. They know they will be comfortable there; they want to be around people like themselves.
• And, they may not know much about who they might find in any of the "cool clubs".

Specialty stores are particularly suited to expand on this kind of engagement with your customers. You already have been selecting and editing product assortments - what's known today as "curating" - that speaks to a certain taste level. And attracts a particular group of shoppers.

And thereby, you have also been "curating customers"! You see, it's your customers – not just your merchandise – that really make your stores "special".

And these folks - your "best customers" - might like to hang out with each other when they are NOT shopping. 

• This is your opportunity to engage in real life(or IRL, as they say) with those who care about your merchandise - and what it represents - the same way you do.
• Make your stores more than a great place to shop. (Remember, there is the internet, after all.)
• What experience can you offer that will make your stores the place to be for folks like your very best customers? (They're what really make your stores "special." And don't they love to hear that about themselves?!)

We believe you will find it energizing! One more way to put the fun back into retailing!

Must owners pass through the "Valley of Bankruptcy?"

Recently we received an email from a long-time follower of The Retail Owners Institute®. It included a comment and a question that you, too, may have wondered:

How do you go about changing the mindset of the owner/CEO about GMROI, inventory management best ideas, etc? 

Our CEO stills buys by intuition, hunch, seat-of-the-pants. He likes to use phrases like: stack-em-high, watch-em-fly. One-to-show, one-to-go.

Can CEO's go from mediocre to great, or do they have to pass through the valley of bankruptcy first? 

Wow! Quite a question, speaking volumes about the underlying concerns.

Those Owners & CEOs who still "stack-em-high, watch-em-fly", who buy by hunch and intuition are in fact disappearing. It's what we call "Retail Darwinism". But, must owners pass through the "valley of bankruptcy" in order to change?

Every case is different, of course. In our work with retailers in "turnaround" situations, we've found that the fear of impending failure, the acceptance of being on the brink of bankruptcy, can prompt changes. Unfortunately, sometimes it is too little, too late.

So, how can Owners and CEOs be motivated to change?

• It starts with increasing their financial skillset and confidence.
• Enabling them to have a positive answer to "Am I running this business…or is it running me?!"  
• Doing integrated financial projections can be eye-opening.
• Knowledge IS power!  

Occasionally, however, fear is more paralyzing than motivating.

• These retailers simply do not appreciate how much control they could have! 
• Not able to recognize their alternatives, they become frozen in the headlights.
• This is especially true for those who have delegated the "accounting and financial stuff."

That's not to say that Owners & CEOs need to do all of the accounting and bookkeeping themselves. Far from it!

But since Owners are responsible for projections, for playing "what if…?" about their business, they must understand the cause-effect financial levers in their business.

That's how they can be empowered, better able to respond as the business environment changes.

Emails such as that one cause us to redouble our dedication at The ROI to help any retailer, anywhere be able to look ahead, compare potential outcomes of their own financial projections, and then use those insights to inform their judgment and decisions.

Or in other words, empower retailers to "Turn on their financial headlights!"