Tony Scott, retail adviser for the Forum of Private Business, provides some useful tips small retail business owners can take to successfully deal with the challenges of the ever-changing retail landscape.
People love shopping, they always have and they always will. However, customer shopping habits have shifted dramatically over the past few years, and for retailers the competition is getting even stiffer. All businesses large or small have no choice but to up their game to drive growth. There’s plenty of support for independent retailers through schemes such as local loyalty cards, BIDS and the upcoming Small Business Saturday on 6th December, all aiming to drive increased footfall into our local high streets. But these will only be truly effective if you get the basics right and know your own retail detail – not in your heart but in black and white numbers. Winners in the increasingly competitive retail landscape know the detailed dynamics of their business and plan their future trading strategy around it, capitalising on their strengths, maximising on missed potential and avoiding the less successful elements. Retailers who don’t embrace this fundamental approach are in danger of being left behind and falling by the wayside alongside the other recent high street casualties. Below are four top tips to help you take advantage of sales and profit growth:
1: Ring fence Monday mornings
The biggest challenge for any small independent retailer is time, or rather lack of it, with a multitude of tasks to do 24/7. However, it is vital you don’t lose sight of the fact that nothing is as important as looking at your numbers in detail every week. Monday morning is often the best time for this. Spend a few hours looking over what happened the previous week and working out what the figures are telling you. What can you learn from the last week’s trading and how will this inform your plan of action for the next seven days’ trading and beyond.
2. Embrace your product and/or brand hierarchy
Looking at just your top line performance alone won’t tell you what the key drivers are and where you are losing business. When analysing your sales, always look beneath the surface – by product category and/or by supplier/brand.
3. Understanding why?
When you are reviewing your performance, you need to build up a history of what has happened in the previous week. Consider macro factors such as weather, roadworks, town activity – anything that could have had an impact on your sales. Also scrutinise your own sales and stocks – what were your best sellers, what product groups/brands were the best performers, where you’re over or understocked and what lines have sold out. Document the findings, ask why and then react to whatever you discover.
4. Structure your buying
Regular performance reviews and documented findings will drive your forward trading and buying strategy. Set buying plans using your hierarchy and base them on your history, individual product sales, missed potential and new trends/products. This is the most important task in increasing profit – failure to buy in this way will destroy net margin through unnecessary markdowns and missed opportunities will severely limit your growth. The above may seem like simple points, but if you lose sight of the basics no amount of schemes or incentives will be able to help you resuscitate your ailing retail business. Finally, remember if in doubt, seek help. Advice is on hand from a variety of sources, for example the Forum of Private Business in partnership with Retail Spa works with shop owners to provide expert support where they lack time, knowledge or resource. For further information visit www.fpb.org
