Independent Retailers Reporting Solid Sales

by staff on February 10, 2009


sm-glovesBeyond the gloom of relentless retail layoffs and abysmal revenue reports is a surprising find: retailers that are reporting solid sales in December and January. Retailing Together visited some of these extraordinary businesses to discover how they were bucking the recession. How are they generating respectable sales while nationwide retail trade sales are down 2.7% from November 2008, 10.8% below last year?  And why are some independent retailers calling this the best period of business they have seen in years?

Lisa Zajdel, owner of Sassy Sarongs,  is a confident business owner with a bright smile and a fierce dedication to her business who sees this downturn as an opportunity to grow her business, despite the fact that other retailers "might be retracting." 

Like most successful retailers, Lisa knows that recessions are part of a cycle, and good times follow the bad, but solid management is always a requirement. Rather than hunkering down, she’s changing her business to fit new realities and prepare for the recovery. 

lisa-sassysarrongs "I’ve actually stepped up my advertising and changed my pricing strategy to be more promotional," reports Lisa.  She’s reaching out to bloggers, advertising on other websites, using Google Ad Words more, and expanding her online advertising. And her consumers are responding. While larger chains are struggling and laying off employees, many independent retailers have adapted, and some are thriving.

Lisa also recommends that other retailers be very careful with merchandising and avoid "overbuying products." Overbuying products "will slow your turn and also tie up your financial resources." 

Fortunately, manufacturers are changing their business practices to accommodate retailers’ new merchandising needs. Many manufacturers are lenient with canceled orders and are allowing retailers to buy more immediates, making small, frequent orders a practice that significantly improves retailers’ cash flow, if the retailer is good at moving the product. Lisa explains: “the manufacturers really understand the environment and have stepped up.”

Another major change is that Lisa is not going to trade shows this year. She’s asked manufacturers to send buyers’ packets, samples, and swatches for first and second quarter. She expects to return to the trade shows by next year to stay abreast of new lines and trends but will be saving both time and money during the downturn.

patricemann1Patrice Sanders talked about similar struggles and challenges at her store, Stefan Mann. Stefan Mann, voted "Best Bags" by Phoenix Magazine in 2005, has been a fixture in Scottsdale, Arizona, for over 25 years, and the main focus of the boutique is to find unique handbags and accessories for its customers. Handmade inventory from Paris, Milan, Czech Republic, Italy, China, and many more exotic places decorates the store in the middle of the  el Pedregal outdoor shopping villa.

To owner Patrice Mann, this economy is nothing new. "When we came through 9/11 it took everything we had.  We had to buy things on credit and it was very very difficult. We did what was necessary, but at that point my husband decided that he never wanted to get into that situation again. So we established budgets and we are very grateful because we could see a recession starting last year around the holidays.”

By establishing budgets and controlling their inventory, Patrice developed a solid merchandising strategy that paid off when the economy soured, and merchandising has long been a strength of Stefan Mann.  The boutique was one of the first accounts for Dooney & Bourke, and Kate Adair, the designer for Desperate Housewives, will be bringing in her collection this year.

But most of their best lines come from suggestions from their customers.  "Our customer base"they are just so wonderful"they will drive up from Tucson or down from Flagstaff or from across the nation," says Patrice while smiling at her best friend and employee Victoria Macy.

stefanmann

Patrice has a stern warning for retailers starting out now: wait for conditions to improve before buying or building a store.  She compares buying or building a store in this economy to "buying a house with debt" because of the cost of construction and inventory. ”I think you really have to pay attention to that now, because people don’t have the resources."

Both Patrice and Lisa have demonstrated that independent retailers can survive if they adopt solid business practices. Like many successful retailers, they addressed the recession by reorganizing their strategies, increasing customer service, increasing their promotion budgets, and keeping close watch on inventory. Patrice and Lisa have decided to face this economy like any other business challenge and have found an opportunity for growth.

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{ 2 comments… read them below or add one }

Thomas Cornelius February 10, 2009 at 5:05 pm

Recognizing the opportunity to increase sales with the existing foot traffic in a retail store is not new to retailers and it is their business. Retailers are not magically creating a new consumer – they are working with the existing foot traffic to increase sales in different categories. This utilization of the existing foot traffic is one of the greatest untapped assets I see with retailers today.

There have been many studies about consumer behaviour – entering the retail store, spending time at the checkout, where to approach the consumer and how. Most of these studies take in account variables that are used for passive impressions on the consumer generated by displays based on their walk through flow in retail stores.

Utilizing these studies and consumer surveys to increase sales by just a couple of percent is the status quo in the retail industry. Recognizing the real value in these analytical exercises is to adopt passive display driven sales engagement into consumer interaction – engaging the consumer in one on one sales conversations. The old world rule – not to engage the consumer into initiated sales conversations while shopping is just wrong. Our sales representatives who are managed and trained to assist the consumer in his purchasing decision and to drive the attention of the shopper to products that are of interest to him is just good business, but unfortunately has been lost in today’s retail environment by too many retailers.

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Eric Busboom Reply:

It does seem that retailers could do a better job with engaging their customers. While observing retailers interacting with customers, I’ve too often seen the (potential) customer largely ignored, suggesting that there could be increased sales from the existing traffic.

However, I suspect that for many retailers, particularly main street retailers that can’t depend on the traffic generated by a mall location, existing traffic is no longer sufficient, particularly if the first choice for that foot traffic is to go to a mall. These retailers should be concerned with how to increase traffic, not just optimize sales to the traffic they’ve got.

Of, course, back to your point, if the retailers aren’t selling the most they can to their existing traffic, generating additional traffic is a waste of effort.

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Victoria Macy February 11, 2009 at 12:14 pm

Hi, Patrice’s last name is Sanders. Her husband, Stephen Sanders, is owner of the Stefan Mann shop. Thank you. Victoria Macy, manager of Stefan Mann

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Eric Busboom Reply:

Thanks Victoria, and please communicate our apologies to Patrice. ( We’ve fired our fact-checker. )

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