Six steps to a profitable Christmas
Get the retail equation right and you'll have plenty of prosperity to celebrate this Christmas. We chat with business strategist and mentor Wayne Gillan, from Excel BizGroup, for tips on using Spring to prepare for peak season.
1. Switch on your staff
Online shopping is only ever a click away for your customers, and having a good number of savvy staff members can make all the difference to your sales. “Retailers often fall into the trap of staffing their store with the cheapest labour and neglecting training,” Gillan says. “But having enough good staff on each shift makes you easy to buy from and could prevent your customers Googling your competitor while they're waiting in line.”
Gillan suggests implementing extensive training programs for Christmas casuals and also doing refresher sessions with your permanent staff to ensure everyone is up-to-date with product information and sales techniques. “It will pay for itself if your customers feel well taken care of,” Gillan says.
2. Make memories
Wrack your brains for ways to make your customers’ lives easier and they'll sing your praises. “Could you offer gift-wrapping or another value-add that will make you memorable?" Gillan asks. Often quick service is the key to creating return customers. “Shopping for many people is an emotional experience so let them have it when they want it,” Gillan says. “If you allow frustration to build, the emotion goes down and they may not want it any more or they will try and hit you up for a discount.”
3. Know your numbers
The Pareto Principle or “80/20 rule” states that 20 per cent of your product will make 80 per cent of your turnover, and crunching your sales figures to find your top 20 per cent sellers can help you work out what to stock in high numbers. “It's surprisingly accurate,” Gillan says. “Just recently I had a client who is a wholesaler and we went through his stock, which consisted of eight pages of line items, and discovered only about half a page gets him about 80 per cent of his turnover.”
Knowing your best sellers can also enable you to maintain your cash flow. "Have more of the top 20 so there is more cash turning, rather than having a lot of other stock and running out of cash to fund the high selling products,” Gillan suggests. “In an ideal world you would get 30 day terms off your suppliers so you can get a product in and sell it before you have to pay for it.”
4. Style to sell
Clever merchandising can make all the difference to your sales over Christmas. “Some people make the mistake of putting their best sellers at the back of the store, thinking people have to walk all the way through the store to get them and might pick up some other items on the way,” Gillan says. “What you actually want is to have your top sellers highly visible and easy to access then have plenty of options at your point of sale so people can grab some cheap stuff and add a couple of dollars to their basket.”
5. Find your target market
Think carefully and research where your target demographic is lurking, then target your marketing accordingly. “If you're trying to appeal to a younger age group, social media might be a good avenue,” Gillan explains. “Attracting grey nomads might mean using more traditional avenues.”
Gillan says a good marketing plan will have 10 strategies that each contribute 10 per cent. “If one doesn't fire then the other nine might work – it means you don't have all of your eggs in one basket,” he explains.
6. Discount wisely
Once the Christmas rush is over you’ll be straight into the New Year sales and Gillan says this can present a fleeting opportunity to shift your poor selling stock. “You would be crazy to discount your top 20 per cent sellers because they sell anyway," he points out. "Put sales on your bottom 80 per cent to turn them into cash as quick as you can because you don’t know what is going to happen next season.”
Gillan says that some retailers, particularly in fashion, are tempted to hang onto stock until the next season in the hope they’ll be able to sell it then at full price but given the speed at which styles change, that’s rarely an effective model. “Think of stock as loaves of bread that are going stale,” he says. “Towards the end of a season you might get a high proportion of the normal price, but if you wait until the middle of winter, you'll likely get nothing."
Words by Kim Martin
The articles represent the views of the authors and not necessarily that of the Bank. You should seek independent professional advice before acting on any matters set out in the articles.