Social Media Trends and Content Ideas for Maximum Impact in 2024
p. 4
S.U.R.E. Process Management
p. 6
Minimizing Disputes in Family Business
p. 8
01SRT_03-04.24_cover.indd 101SRT_03-04.24_cover.indd 1 1/25/24 11:11 PM1/25/24 11:11 PM
Shoe Retailing Today is a members-only publication of the National Shoe Retailers Association. For information on membership please call 520-209-1710 or visit www.nsra.org.
Shoe Retailing Today Copyright © 2024 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
10 TODAYMAR-APR 24
Understanding Retail Growth Differences
There are many reasons why some stores experience strong growth year over year while others struggle to maintain what they did the previous year. The stores that do find ways to grow typically have traits in common. These might include better vendors or possibly better buyers. Their sales associates could be more motivated. They might even have better locations. On the other hand many stores that don’t grow oftentimes share similar characteristics as well. There is however one difference that I regularly see that separates the growth group from the non-growth group of retailers. The stores that experience the greatest growth rates year after year are the ones that use their data to help drive buying decisions.
Characteristics of Slow-Growth Retailers
Retailers that grow at a very slow rate if at all are easy to spot. You can recognize them at market by being indecisive when in showrooms and by buying the same vendors season after season regardless of profitability. This buying practice is often justified as either protecting long-standing relationships or out of concern that a competitor may end up with the line if they fail to buy. Performance is seldom if ever evaluated using a vendor scorecard. True to form these retailers are most likely over-assorted carrying too many vendors and/or too many SKUs. The result of which leads to duplication resulting in inefficiencies.
A Strategy to Grow Sales (Along with Some Tough Love)
Ritchie Sayner
Published in the March/April 2024 issue of Shoe Retailing Today
They are unable or unwilling to fill in fast sellers due to lack of cash lack of time or simply not paying attention and are slow to deal with poor sellers. This pattern of performance continues season after season year after year with very little change. The year-end numbers always look the same: flat sales inconsistent margins and below average turnover and GMROI.
When asked about business the excuses are predictable. They often cite:
- slow traffic
- difficult economy
- rising prices
- lack of good salespeople
- no parking
- late shipments
- weather
The list is endless but generally the same. What is seldom if ever heard is that the selection was poor key sizes were absent markdowns weren’t addressed quickly enough or that too little time was devoted to sales training. In other words the real issues are being skirted and the tough questions are not being addressed.
These store owners are stuck in what is called the non-profit cycle (see graphic on page 11) which is very difficult to break out of without seeking out some sort of professional mentorship. Most likely these stores don’t plan their purchases by location AND classification. This process does take more effort and it does take more time—hence the word work. The results of following a well-managed merchandise plan are always better than having no plan at all.
One of the strategies that I use with retailers to help them grow sales volume profitably
is to focus on keeping BOM (beginning of month) inventory levels close to plan. It is virtually impossible to maximize upside sales potential if stock levels are below plan month after month. This link – https://www.management-one.com/blog/uncovering-hidden-opportunities-in-your-retail-data – will take you to an interview I participated in.
Copyright © 2024 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
NSRA.orged in a few months back showing exactly why sales are missed when beginning stock levels are too low. I encourage you to watch the interview if you find yourself missing business in key classes. The strategy works with any category of merchandise and any retail vertical. Try it in your seasonal categories like sandals or boots. Then apply it to dress or casual footwear athletic shoes and even socks. You will be surprised at what you might be missing.
The Strategy
The strategy described in the link in the preceding paragraph involves the use of inventory targets and stock-to-sales ratios found in a well-constructed merchandise plan (aka open-to-buy plan). The good news however is that all the data needed should be available through your POS system. You already have it so why not put it to use? Point-of-sale systems can be real timesavers but you must put the effort in to learn what they are capable of. You can’t just buy a new system turn it on and expect knowledge to come flowing out of it. POS systems can generate all sorts of data; some is nice to know and some is need to know. For this exercise we are only focused on the need-to-know data. Too many merchants end up using their POS systems as not much more than expensive cash registers or price tag printers which is unfortunate in this data-driven world.
Make This Year Count
Make this year the year that you strive to use the data you are already creating to help you make better buying decisions and keep inventory levels in balance and on plan. Trust me if you do this your sales will increase.
- Ritchie Sayner is with Advanced Retail Strategies LLC an affiliate of Management One. Sayner’s book Retail Revelations: Strategies for Improving Sales Margins and Turnover (2nd Ed.) is available on Amazon. He can be reached at www.advancedretailstrategies.com.
No Inventory Balance
No Information
No Profits Increased
Expenses
- Excessive Markdowns
- Additional Loans
- Incorrect Planning
- Late Deliveries
- Poor Cash Flow
- Incorrect Timing
- Slow Turnover
- Overbuying
- Lost Sales
One of the strategies that I use with retailers
to help them grow sales volume profitably is to focus on keeping BOM (beginning of month) inventory levels close to plan. It is virtually impossible to maximize upside sales potential if stock levels are below plan month after month.
The Non-Profit Cycle
Summary of Retail Growth Strategies
The article discusses the key differences between high-growth and slow-growth retail stores emphasizing the importance of data-driven decision-making in boosting sales. It highlights common issues faced by struggling retailers such as indecisive buying and poor inventory management and suggests maintaining planned inventory levels as a strategy to increase sales. The author Ritchie Sayner advises retailers to utilize their POS systems effectively to leverage necessary data for informed purchasing decisions.
“Make this year the year that you strive to use the data you are already creating to help you make better buying decisions and keep inventory levels in balance and on plan.”
Real-World Examples of Retail Growth Strategies
The article discusses strategies for improving retail growth by leveraging data and maintaining inventory levels. Here are some real-world examples of how these strategies can be applied:
- A local shoe retailer in New York City used point-of-sale (POS) data to identify their best-selling products and adjusted their inventory accordingly. By focusing on maintaining optimal stock levels for these items the retailer increased their sales by 15% over the previous year.
- An independent fashion boutique in Los Angeles implemented a vendor scorecard system to evaluate the performance of their suppliers. This allowed them to make informed decisions about which vendors to continue working with leading to a 10% improvement in their profit margins.
- A sportswear store in Chicago faced challenges with over-assorted inventory. By analyzing sales data they streamlined their product lines and focused on high-demand items resulting in a 20% reduction in excess inventory and a significant boost in turnover rates.
