Category Archives: Retail

3 Things You Don’t Know About Selling To Boutiques That Could Hurt You

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If you’re starting a clothing line, know this: selling your line to a business is NOT the same as selling directly to consumers.

1) Boutique owners really just want to know 2 things about your line:

- How does it fit into my store?
- Can I make money from it?

Fashion designers must be clear on these two points to get a shop’s attention. They care a lot less than we’d like to think about your line philosophy and your inspiration for the season’s styles. You want to focus on filling the stores’ needs rather than telling them about yourself and how great your line is. Sad but true.

Be sure you know who your line “hangs with” and why you feel it would sell in their particular store before you approach them.

2) They hate big attachments on emails.

I could fill about 7 pages on “how to approach a store” and “how to draft a sales email for a boutique.” For now, just know this… Unless you’re already been selling to someone, the chances of them opening an attachment on your email are slim to none. Instead, include 2 pictures of your line in the email and a link to your website. They can go to your site if they’re interested.

3) Getting no response from a buyer is not the same as getting a NO.

Look, buyers get hundreds of emails a day. It’s impossible to keep up with them all. (I sold my shop 3 years ago and STILL get around 50 a day from manufacturers! No lie). If you’re starting a clothing line and you contact a store and don’t hear back from them, hang in there. Keep trying until someone tells you NO

THANKS. Be nice, respectful, and persistent. Try contacting them different ways – email, phone, and snail mail. Use all three options and see what gets the best response. Don’t overlook the good ol’ postal service. So many vendors use email these days that you might have a better chance of standing out if you mail something.

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Loving Customers in Retail

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I run several busy retail news agencies in Australia. These stores sell magazines (more than 1,000 titles in stock), newspapers, greeting cards, stationery, books, social stationery and lottery products.

We see, on average, 1,000 customers each day. These are a high volume low transaction value businesses.

There are around 4,500 news agencies around Australia.

A customer asked for help in choosing a car magazine as a gift in my newsXpress Forest Hill store last week. She didn’t know much about cars and wanted to make sure she purchased a gift which would be liked.

Another customer offered to help as he was a car magazine enthusiast.

The two customers talked for ten minutes about cars and the car magazines we had on offer. They worked together to make the selection for the Christmas gift. They were a delight to watch.

We were most appreciative of the knowledgeable assistance given by the customer who stepped into help. He was glad to have the opportunity.

This true story is not unique. I bet it happens many times each day across the news agency channel in Australia and other retail businesses around the world.

People come to news agencies for magazines because we are the specialists – like the lady looking for a gift. People with special interests come to news agencies because of our range, our browser friendly attitude and because the environment is personal.

This difference – range, customer comfort and personal service – is vital to our entire channel. We owe it to each other to do our best in these areas as they reflect our point of difference.

We rely on the two customers in my story – the lady looking for a magazine as a gift and the guy who shops in news agencies because of the range and the browser friendliness. We need to do more to attract and keep them.

The Christmas spirit has been on show in retail businesses around the world with customers helping each other like in my story.

Independent and small retail businesses are wonderful places where humanity and compassion are on show every day. This is a point of difference in small business compared to large business. It is a point of difference we need to somehow embrace and promote.

  • I have seen stores promote on their window slogans like:
  • Where the community comes together.
  • Where the community meets.
  • Connecting the community.
  • Local people serving local people.
  • Shopping with friends.
  • Come and meet your neighbours.
  • More than shopping, a place to enjoy.
  • Helping each other.
  • Welcome home.
  • We know your name, not your number.

While some of these sayings sound cheesy, they do reflect the personal and local nature of the type of business I have described in my story. Locally owned businessesare more personal and connected then their big business competitors.

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Australian Shopping Centre Landlords Hurt Small Business Retailers

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Some Australian shopping centre landlords are not taking notice of small business news agency sales data and are increasing base rent by as much as 75% without apparent justification. Add to this increased competition from other retailers in shopping centres today compared to a few years ago, supermarkets, Australia Post to name two, as well as trading terms from suppliers which do not reflect the difference between a shopping centre news agency and other stores and is it any wonder there are shopping centre news agencies which are struggling.

The industry average gross profit for a news agency is between 30% and 32%. The average occupancy cost for a shopping centre news agency is 15%, labour costs 12%, operating expenses are 5% and theft costs at least 2% and often more. The labour cost of 12% usually does not include owner’s wages.

A note on the 15% occupancy cost – this aspirational for some newsagents who have occupancy costs closer to 25%.

One way to address this the shopping centre challenge is to diversify. However, the permitted use clause of the lease and an inflexible landlord can often get in the way of this. I have seen situations where landlords have refused to allow newsagents to sell books, get into gifts or to offer homewares as part of a seasonal sale catalogue tied back to magazine themes such as food. At the same time landlords have permitted coffee shops to take on newspapers, Government owners post offices to expand into stationery and supermarkets to take on papers and magazines.

With sales in core categories over which newsagents have no price or supply control, magazines, newspapers, cards and lotteries, down year on year, it is hard to see the justification for a landlord increasing rent yet it happens – usually 5% a year regardless of trading conditions.

The challenge, of course, is that as long as a landlord can find someone prepared to take on a news agency at a higher than reasonable rent, they will sign them up and not renew the lease of a long term existing newsagent who will not accept an exorbitant (in their opinion) increase in base rent.

One only has to look at recent history in major shopping centres in Victoria, New South Wales and Queensland so see that this is what has happened. A bullish negotiator talks up the landlord, says they can achieve a higher than industry average GP, the landlord believes this and signs them up for a nice premium. The lease is handed (sometimes maybe forced) to an operator who is pumped up by the promoter and sooner or later they close, sometimes losing the family home along the way as has happened recently. The ‘promoter’ walks away unscathed and does it all again.

Publishers, magazine distributors, industry associations and other stakeholders who want to see news agencies to continue to operate in shopping centres need to do more work educating landlords about fair rent. Too many newsagents of long standing lose their businesses at the end of their lease. Too many make barely minimum wage during their time of ownership of the business.

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Customer Loyalty Programs

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Everyone uses a loyalty program. You choose a certain credit card so that you can rack up airline miles. You pull out a plastic card for the cashier to swipe at the grocery store that gives you access to certain discounts. I carry a plastic tag on my key ring for Starbucks that gives me a free drink on my birthday and free soy milk in my drinks. There are plastic cards for the loyalty programs at office supply stores, pet stores and so many more.

The definition of a loyalty program is to provide discounts, prizes, or other incentives to encourage continued patronage of a business, according to Wikipedia. Generally, loyalty programs are considered less expensive to maintain than allowing customer defection or “churn.”

Jarrett Paschel, Ph.D. is the vice president of strategy and innovation for research consultancy The Hartman Group and he wrote about the results of research done on retail loyalty programs. “We’ve been listening to frustrated consumers complain about retail loyalty programs for years, so we were not surprised that our recent research confirmed this position. Looking at the chart we find that 74 percent of consumers somewhat or strongly agree that ‘retailers need new and better ways of rewarding loyal customers’.”

We love loyal customers. It is in rewarding those customers that we have the opportunity to turn them into raving fans. We must not lose that opportunity.

Loyalty programs are a “selfless acknowledgment of your store’s appreciation for your customer’s continued patronage and support with a gift or service of substantive or meaningful value,” says Paschel. That chosen gift should not have any strings attached to it – otherwise it isn’t freely given. It also should be able to be used immediately – which differentiates it from a bounce back coupon. (A bounce back coupon is a coupon given to a customer offering a discount on a purchase to be made within certain future time constraints.)

Our goal is to reward our customers for making the right decision and choosing to shop with us. Look at your own behavior. Are you motivated simply by discounts, miles or points? No. Those don’t necessarily cause you to change your behavior and drive out of your way to go to a store.

Loyalty is inspired by making an important difference in your customer’s life. It will necessarily include a shock, surprise and awe component.

It isn’t hard. You only need to know one thing. What matters to your best customers? Go to your computer and pull up the list of your customers sorted by sales volume. Look at them. Picture them. What is important to them? What type of lifestyle do they lead? What do they buy from you? Start a list.

Force yourself to write down at least 25 entries. You will see commonalities. What could you gift them with that would make a meaningful impact?

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