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Psychology of Visual Merchandising

  
  
  

Psychology is a science of the human mind and behaviour. Wikipedia describes psychology as the study of the soul. Visual Merchandising (VM) is a clever way to exhibit products with the intent to touch the potential customers senses, striking the right chords in him and arising in him an emotion to possess the product on display, thus subtly persuading him to make an impulsive purchase.    

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VM includes store layout and decor, merchandise presentation, and displays. 

It incorporates the products, environment, and space into a stimulating and engaging ambience to encourage the sale of a product or service. A good presentation can and should stop you, get your attention, and may be even make you smile.

In very broad sense, visual presentation not only helps to sell the merchandise itself but the store image as well. It provides a window into a Brands soul! The Goal of VM is to ensure the Brand becomes the chosen one! Thereby increasing sales and building brand loyalty. Visual merchandising or commonly known as the quiet salesman requires a keen eye, meticulous taste, and a creative mind.    

Todays shoppers, shop for leisure and regardless of their shopping motives are more attracted by safe, attractive and comfortable shopping environments.    

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6 Business Tasks You Could Be Outsourcing

  
  
  

6 Business Tasks You Could Be OutsourcingSome businesses can handle normal daily activities but need outside help to take on new projects that don't justify another employee. Other businesses are just struggling to manage day-to-day business. Still others are seeking ways to get more done or cut expenses in this challenging economy.

There are many valid reasons to consider outsourcing, but here are some of the most compelling.

  • Focus on core business activities. For many businesses, the primary motivation to outsource is that it frees owners, managers and employees to spend their time on income generating activities.
  • Improve opportunities for growth. Frequently opportunities for company growth and a desire to expand business operations exist, but resources to make it happen are lacking.
  • Increase efficiency and effectiveness. In many cases, outsourcing allows access to expert talent. Outsource service firms can offer innovative approaches, the latest technology, and creative, cutting-edge solutions that otherwise aren’t available.
  • Improve your bottom line by decreasing your expenses. A skilled contractor or firm can generally perform work less expensively than a full-time employee can, and the costs of hiring, training, and maintaining employees are eliminated, as are taxes and benefits.

Here's what you can, and should, be outsourcing.

1. Administrative tasks. Scheduling, travel arrangements, data entry, typing and other administrative tasks can usually be handled by a virtual assistant or administrative service. While these tasks are crucial to the proper functioning of any business, they are not usually core business activities.

Where to find help: Assistant MatchAssistU and IVAA help match businesses with screened administrative service providers and offer directories of professionally trained virtual assistants.

2. Lead generation and customer service. Sales calls are often a matter of numbers; more calls equal more sales and leads. Once the initial outreach has been made, closing the sale can be handled by the internal sales force. A talented salesperson’s skills can be better utilized to close sales and handle clients, rather than make cold calls. It can also be a great deal more efficient to outsource customer support than it is to maintain a qualified support staff, especially for product-based companies.

Where to find help: Global Response and The Connection are recognized sales and customer service providers to many of the world’s top brands. Resource Nation allows companies to get quotes from pre-screened business solution sources.

3. Accounting and financial duties. Accounting firms or individuals can help with many financial services including bookkeeping, invoicing and accounts payable and receivable, as well as financial reporting, analysis and planning. Outsourcing payroll processing alone can save considerable hours, headaches and dollars. Many financial contractors will bundle these tasks for even greater savings.

Where to find help: BookkeepingHelp is a popular source of experienced financial professionals. This is one area to be very careful when outsourcing. It’s a good idea to check with certifying organizations, such as the American Institute of CPAs or American Institute of Professional Bookkeepers.

4. Marketing. Effective marketing determines how both brand and company reputation are perceived in the marketplace. A marketing firm or consultant can often provide an outside perspective that an internal marketing staff cannot. Professional freelance writers can develop higher-quality, polished content that will improve marketing efforts. Website design, brand development, press releases and online marketing duties such as social media, blogging and search engine optimization are good candidates for outsourcing as well.

Where to find help: Guru and Elance are two of the best-known sources of freelance contractors. They cover many areas of outsourcing, but excel in the areas of writing and design.

5. IT operations. It can be extremely expensive to handle IT operations in-house. The average business has limited ability and knowledge to manage all of its IT needs. Unless you’re an IT company, IT is a maintenance and repair function, not a core business activity. The potential advantages of outsourcing IT tasks are enormous.

Where to find help: CrossLoop and Tech Guru both offer access to full spectrum of IT remote services.

6. Human resources. Employee acquisition and human resource functions can easily be administered by an outside agency. Outside firms are more skilled at advertising, screening suitable applicants and checking references. Using an HR or employment service to manage employee benefits can also be wise, since they must stay up to date on the latest employment laws and standards.

Where to find help: Ceridian and Trinet are both well-known HR service providers offering a wide range of resources from recruitment to payroll to benefits administration.

Final word

Often, the best way to locate high-quality outsourcing prospects is through recommendations from your professional network. A referral from someone you know and trust is a much more reliable gauge of quality and is usually based on the level of skill and not simply the cheapest cost. Professional groups or associations and LinkedIn can also be great sources.

Royale Scuderi is a freelance writer and success coach. She is the founder of Productive Life Concepts and has been featured on top rated blogs such as Stepcase Lifehack and The Huffington Post. You can also find her musings on life and business at GuardWife.com andTwitter.com/RoyaleScuderi.

What’s hot in retail – March 2012

  
  
  

describe the imageRetailers witnessed exciting new developments on both the industry and legislative sides in March 2012. This year’s unseasonably warm winter continued into March and helped give a noticeable boost to consumers’ moods and retailers’ sales. On the legislative front, Congress took steps in the right direction to reauthorize federal transportation funding, and the Senate held a hearing that would help boost travel and tourism to the states by reducing the visa application process – both welcome sights to NRF and retailers alike. Read on below to see what else was hot in March.

NRF Information

  • Continuing the trend for 2012, NRF’s 4-5-4 calendars were another big hit in March as visitors wanted to be sure they have the correct dates starred for when retailers report the previous month’s sales numbers.
  • The release of NRF’s Easter survey conducted by BIGinsight was popular as retailers were excited to see that rising gas prices weren’t going to deter spending on Easter goodies. Shoppers said they intend to spend $16.8 billion this Easter, a record for the survey
  •  The exciting news of February marking the 20th consecutive month of growth for the retail industry saw also saw a large amount of traffic last month. According to NRF, February industry sales (excluding automobiles, gas stations and restaurants) increased 0.5% in a month favored by unseasonably mild weather.
  • Gearing up for NRF’s Loss Prevention Conference and EXPO, June 20-22 in New Orleans, retailers wanted to know more about honoring loss prevention and law enforcement professionals for their outstanding work with NRF’s 2012 Loss Prevention Awards. The two awards recognize LP cases and a law enforcement professional or agency that has made a positive impact on their company, community and the retail industry as a whole. The winners are recognized on stage in front of more than 2,700 of their peers
  •  As NRF led the buzz in discussing the dirty laundry on Tide thefts in America, retailers turned to NRF’s2011 Organized Retail Crime Survey for insights and statistics from senior loss prevention executives representing 129 retail companies. The survey chronicled retailer and legislative efforts in battling organized retail crime rings across the country last year. Stay tuned for the release of the 2012 survey this summer.

 

http://blog.nrf.com/2012/04/01/whats-hot-in-retail-march-2012/

The face of retail 4 years from now

  
  
  

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According to a new Whitepaper from Nielsen, What’s In Store, In-Store For U.S. Retail In 2016, presented byTodd Hale, Senior Vice President, Consumer & Shopper Insights, traditional mass merchants and supermarkets have yielded share to value channels (club, dollar, and supercenter) and drug stores, prompting a series of changes, including format blurring, new marketing outreach techniques and shopper entertainment.

Highlights from the findings include:

  • Store footprints either get supersized for one-stop-shop convenience or downsized into smaller stores for quick grab-and-go trips
  • For people who view shopping as entertainment that engages all the senses, lifestyle outlets blur the line of demarcation between traditional formats, merging restaurants with food markets, serving up food and wine tastings, providing live music and movies, and creating places for friends and co-workers to gather and socialize
  • Technology brings consumers into the shopping experience via options such as touch screen ordering, QR code advertising, mobile coupons and shopping lists.
  • Store brands mushroom to include super premium offerings joined by an increasing number of restaurant and celebrity-chef brands, while a few consumer packaged goods brands transitioned onto restaurant menus
  • The Big 4 technology companies [Amazon, Apple, Facebook, Google] will establish beachheads outside the tech world, challenging conventional players to re-think their business models and forge new alliances or chance seeing themselves become less relevant
  • Deep discounters continue to keep the cap on operating costs in order to maintain their price edge, but low prices alone have not been enough to guarantee sales success

The report goes on to say that retailers will be challenged as never before to differentiate from an ever-expanding competitive set that brings novel ideas and fresh perspective to the marketplace. Using historical trends in retail channel sales and store counts, along with a select number of macroeconomic variables, Nielsen predicts above average compounded annual dollar sales growth (CAGR) for the e-commerce, club, dollar, pet store, supercenter and drug channels ranging from 8.5 to 2.7%.

Ecommerce tops the list of growth channels. During the 2011 holiday season, retailers across different channels touted free shipping and big discounts, attracting consumers eager to save time and gas money by shopping at their fixed and mobile keyboards.

Responding to sales gains made by online competitors, brick-and-mortar retailers are evolving their business models to add more choices for online and offline ordering as well as delivery and pick-up options.

Projected Retail Channel Compound Annual Growth Rate

Retail Channel

Compound Growth Rate 2010-2016

Gaining Share

   Ecommerce

8.5%

   Club

4.9

   Dollar stores

4.8

   Supercenters

4.6

   Pet

4.1

   Drug

2.7

Losing Share

   Convenience/gas

2.1

   Supermarkets

1.5

   Liquor

1.2

   Discount department stores

0.4

   Sporting goods

0.3

Losing Share & Negative Growth

   Home improvement

-0.1

   Department stores

-0.4

   Auto

-0.5

   Home, bed, bath

-0.5

   Office

-0.5

   Apparel

-0.8

   Electronics

-0.9

   Books

-1.1

   Toy stores

-1.7

   Mass merchants

-3.0

Source: Nielsen TDLinx & Nielsen Analytics, March 2012

Throughout the recession and economic recovery, the club chains appealed to shoppers seeking value, says the paper. Club store growth reflected a unique connection with affluent consumers, the 21% of households that exited the recession early, as evidenced by their increased all-outlet shopping trips and overall spending.

A major impetus behind dollar store growth was a recession-fighting strategy featuring an expanded offering of consumables to attract price-conscious shoppers across all income strata. Additionally, dollars stores kept their foot on the gas with respect to store expansion in existing and new geographic areas. As a result, the 21,500 site store count for the three leading dollar store chains [Dollar General, Dollar Tree and Family Dollar] now exceeds that of the three largest national drug store chains [Walgreens, CVS and Rite Aid].

Over the past decade, supercenter format expansion had the greatest overall impact on U.S. retail sales. While industry pundits discuss the future of these and other big box formats, future supercenter expansion from the big players in the channel will continue to foster sales growth over the next five years.

The American love for pets triggered a 40% increase in chain pet store numbers between 2005 and 2010. With pet ownership reaching all time highs, the pet channel will deliver a strong CAGR through 2016.

With an aging population with strong demand for prescription drugs, the drug channel will maintain fiscal health, outpacing the average channel growth rate. All other channels will lose ground, even if they continue to grow on a nominal dollar basis. Specialty retailers such as auto, sporting goods, electronics, books, toys and home/bed/bath stores will face the biggest challenge.

Some specialty retailers (e.g. toy, book and electronics stores) have experienced significant erosion in store count as big retailers in each sector closed their doors for good. Either declining store counts or lower shopper demand has led to decay in shopper penetration for many specialty retail channels. Pressure from offline and online big box competitors and pure play online retailers will likely lead to further declines.

Supercenter store count more than doubled to 3,468 stores and

these mega one-stop-shop behemoths captured nine share points within consumer packaged retail formats between 2001 and 2010.

With the exception of an aggregate 6.1 share point gain for e-commerce, supercenters and club stores, the Nielsen forecast suggests that share shifts between 2010 and 2016 will be relatively minor for the other formats. Supermarket share will decline at a diminishing rate relative to the past decade or more. The convenience/gas channel share will decline just slightly, while the mass merchandiser channel will experience a share loss of 1.7 points.

The projected share decline for mass merchandisers reflects the historic Walmart effort to convert existing discount locations into supercenters and to a lesser extent from Kmart store closings. Specialty retailers are expected to suffer share declines across the board, ranging from a one percentage point fall for home improvement outlets to a marginal 0.2 percentage point drop for sporting goods stores. Surveying the smaller specialty retail channels, only pet stores will realize a share increase.

Expect Amazon, Apple, Facebook and Google to focus on highly profitable enterprises outside their current purview, including retail. An industry expert has said, “Amazon, Apple, Facebook, and Google don’t recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing…and even finance.” These four companies will enhance or disrupt the future of retail, either in how and where merchandise is sold or how organizations communicate with shoppers and consumers.

Points of marketing differentiation suggest in the report include:

  • Adjusting size, assortment, in-store activities, customer communication, design and branding, stores hope to find an optimal mix that maximizes profits and customer loyalty
  • Retailers opted for designated stores-within-a store, pulling together related items that fulfill a consumer need into a discrete space such as a cosmetics department complete with expert consultant, occasion-based home meal solution centers or dedicated pet care areas
  • An unconventional bent includes virtual stores in high-traffic subway stations, or a floating supermarket on the Amazon River designed to reach 800,000 consumers in just three weeks
  • In-store techniques for attracting shoppers include product sampling, live musical performances and how-to stations demonstrating everything from juicing to preparing sushi
  • Multi-station prepared food offerings now popular in a number of grocers compete directly with carry-out and home delivery restaurants. But other retailers chose the cooperative route, striking deals to staff in-store restaurants
  • Restaurateurs and television chefs crossed over into the world of consumer packaged goods, lending their names to a wide range of products
  • Mobile and online technologies enable one-to-one marketing, customizing shopping lists, menu plans, coupons and other content to reflect user interests and consumption patterns
  • In-store shelf talkers take on a new, interactive dimension with QR codes that connect directly to robust websites offering discounts and cross merchandising suggestions such as wine pairings
  • Online avatars and in-store service agents assist consumers with meal management, entertainment, health and wellness monitoring and fashion selections

The paper concludes by anticipating that:

  • Volatility in energy and commodity prices will become the norm
  • A redefined competitive set will prompt former adversaries to forge marketing alliances
  • The chasm between income and wealth strata will enable retailers at both the high and low ends of the price spectrum to prosper by merchandising to niche audiences
  • Mobile applications, will open the door to innovative marketing approaches
  • Stores will emerge as the social centers of communities
Read more: http://www.mediapost.com/publications/article/170427/retail-usa-in-four-years.html#ixzz1px4mYPNW

Department stores reinvent themselves

  
  
  

 

Retailers Look to the Department Store for Salvation

Department Stores May Have Ceded Power to Specialty Shops and Web, But Retailers of All Stripes Are Embracing Power of Bricks And Mortar

Whatever happened to the department store?

When they emerged in the late 1800s, department stores had everything from tea rooms to art galleries to live music, all housed in architectural splendor. For most of the 20th-century, department stores reigned as the epicenter of commerce and a hub of social activity. They were where people shopped for everything from electronics and home goods to clothes and appliances.

A rendering of a Liz Claiborne shop, which will be one of the 100 shops in JC Penney's newly unveiled Main Street concept.

A rendering of a Liz Claiborne shop, which will be one of the 100 shops in JC Penney's newly unveiled Main Street concept.

 

Then shoppers' focus shifted from downtown areas to the suburbs. Teenagers emerged as a new, powerful purchasing force. Department stores slowly relinquished their dominance to specialty stores that catered to niche consumers with specific tastes. The final insult was the internet. The web gave shoppers the ability to easily compare prices, igniting a price war that put department stores at a further disadvantage.

Today, department stores are a shadow of their former selves and have shed many specialized services, such as gift wrapping and tailoring, while winnowing their product selection. Each is now known for just one or two merchandise categories, if it's lucky: Sears is synonymous with tools and appliances, whileMacy's and Kohl's dominate in fashion and home goods.

http://adage.com/article/news/retailers-department-store-salvation/233366/

Can retail chains help revitalize Detroit?

  
  
  

Meijer plans to build a superstore on 25 acres in Detroit, and Whole Foods plans to open a store in the city, sparking debate over whether chains hold the key to revitalizing downtrodden cities. Some argue chains only drive out small local businesses, while other experts say any retail development is a positive for residents.

http://www.reuters.com/article/2012/03/06/us-usa-consumer-walmart-idUSTRE8250GM20120306

If You Dislike CHANGE… You Are Going to Have a Hard Time Coping with Irrelevance

  
  
  

time for changeIs business BAD or are we becoming IRRELEVANT in the eyes of our customer? That is a scary thought and something we all need to consider. Why? Because in a time period where retail business is tougher than ever emerges a giant that changes the rules in less than 10 years, does more business per square foot company wide than the wildest dreams of the greatest retail executives, and sells their merchandise at full price, and NEVER has a sale, in the most cut-throat and price sensitive of all of retail categories.  Of course I am talking about Apple.

This past week Apple released sales data to the press. Their stores average over $4200 per square foot. I actually thought it was more but their Downtown Manhattan store does over 400 million dollars and is open 24/7. There are expressions such as “gym rat’ or “mall rat”.  Now we have  “Apple Rat. ” I have become one. It is just a cool place to go, to learn new ways to do things, and hang out with a cross section of people coming together in a way that must be confusing the hell out of pinpoint marketers and demographic practitioners.

You see little old white haired ladies working with a 20 something guy with arms that have run out of space for any more tattoos, piercings all over their face, and a real spiked Mohawk. We are talking big time opposites, yet the Apple store brings theses divergent groups together and maybe teaches us something about ourselves along the way. People might be different but their goals and quest for knowledge are the same.

WE HAVE A CRISIS IN RETAILING TODAY AND IT’S ALL ABOUT CHANGE.

Maybe Charles Darwin, the great British Naturalist and author of the Theory of Evolution in the mid 1800’s, holds the key to our success. He said, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

This week I did a webinar on the power of Inbound Marketing and it made me think of the changes that have already occurred and those changes that are yet to be.

Read these facts and you might be in awe as well. Many of these are just subtle shifts in behavior that we have all become part of.

 

  1. 40% of smart phone users report that they have checked competitive prices on line with phones in the store.
  2. 79% of Americans use the internet
  3. The average US Internet user views 2,750 web pages per month
  4. 1/3 of US consumers spend three or more hours online EVERYDAY.
  5. One out of every 8 minutes online is spent on Facebook
  6. 24% of adults have posted comments or reviews online about the things they buy. This is becoming word of mouth advertising on steroids.
  7. 40% of Facebook’s user base is age 35+
  8. WEB-BASED EMAIL USAGE IS ON A STEEP DECLINE (drops of 40 to 59%) among people under the age of 45, a steady decline from 45 to 60 and is increasing in popularity among 60+ year olds. My prediction is that within 10 years email will be as popular as the Fax Machine is today.
  9.  US internet users spend 3 times more minutes on blogs and social networks than on email
  10. 1 in 5 mobile phone owners use their device to make a purchase every month.
  11. 91% of email users have UNSUBSCRIBED from a company/store’s email they previously opted-in to.
  12. Companies that blog get 55% more website visitors
  13. 67% of Business to Consumer companies who use Facebook credit it for attracting new customers to their business
  14. 66% of professional marketers describe a company blog as “CRITICAL” or “IMPORTANT” to their business
  15. 84% of professional marketers describe Facebook as “CRITICAL” or “IMPORTANT” to their business
Our marketing & advertising has shifted from “telling and selling” to building relationships first. The Chief Creative Officer from J. Walter Thompson (the world’s 4th largest ad agency) summed it all up like this. “We need to stop interrupting people in what they are interested in and BE WHAT PEOPLE ARE INTERESTED IN.”

Next week I will share what we do about all of these changes and share ways to adjust to all of these changes and start to create new protocols and procedures to compete on this new playing field.
Let me leave you with the first lesson we all need to learn.
  • We can buy attention: That’s called advertising
  • We can beg for attention: That’s called PR
  • We can bug people for attention: That’s called Selling
OR

We can earn attention by creating something interesting and valuable and then sharing it on a blog, YouTube, a report, Twitter, or on Facebook.

Let’s stop worrying about the mule going blind. Let’s start loading the wagon.

(The statistics represented in this piece were compiled from various sources by the team at Hubspot. -America’s leading innovator in In-Bound Marketing tools and information. Permission was received for their distribution.)

Is Groupon Leaving Retailers Burned?

  
  
  

Is Groupon leaving retailers burned?Groupon has catapulted to mainstream success at an astounding rate. Through its popular daily deals in major cities, the website has drawn millions of loyal visitors and the attention of retailers from local auto shops to The Gap. (See Rick's take on group buying for retail stores.) 

Businesses like salons and restaurants have offered Groupon-exclusive coupons in the range of 50-75 percent off, even if they don't profit from the deals. Small business owners hope the short-term losses will be made up through publicity about the deal and by impressing the deal-seekers, convincing them to become loyal patrons.

Are Small Business Owners Victims of Groupon's Success?

However, for all that Groupon has been successful, some might argue it has been too succesful. Mistakes have been made such as offering too many deals, or not setting a limit on how many deals will be offered. Retailers may become overwhelmed with Groupon customers. Customers may become frustrated at long lines or long waits for appointments.

The noise about Groupon's potential problems reached a cresendo with two stories in particular that spread like wildfire in the Internet blogging sphere:

  • In one case, the owner of a small pastry shop explains in earnest that a Groupon deal forced her to take out $8,000 from her personal savings to keep her business running. I highly recommend reading the post.
  • The other case involved a photographer that offered 2,000 coupons for portraits. Other photographers cried foul, noting it's virtually impossible for a photographer to even conduct this many sessions even in a year, making the deal an unrealistic one.

When a Groupon Disaster Happens, Who's to Blame?

As a result of these incidents, a debate has ignited over the value of the service to small businesses, and who is to blame when deals go sour. One could argue the business owners were at fault for not properly understanding the deals they entered. By the same token, it's reasonable to suggest Groupon needs to be more careful about preventing retailers from shooting themselves in the foot. After all, they know the game better than anyone.

Of course, both "sides" of this discussion are correct. Groupon is a new service, and as time goes by, both the company and business owners as a whole will better understand how to avoid nightmare scenarios. Consumers will learn to avoid crowds by not immediately redeeming coupons; businesses will better understand how to prepare for the influx of patrons. 

Some are already proclaiming the doom of Groupon and its competitors in the group-buying sphere. Only time will tell whether this kind of service ends up being a fad. Many business owners have been satisfied with their Groupon experiences. Let's not get overboard with the backlash.

Have You Used Social Shopping Websites?

I'm curious to know if you have any experience using Groupon, Living Social, Grouby, or any other "group buying" websites. Do you have any nightmares to share? Or even just hickups in the process? Did you consider the service a wise investment? Feel free to let me know by leaving a comment.

Rebranding... Is It A Good Idea?

  
  
  

I received an email with two terrific questions that I thought would generate some interesting feedback from all of you. So please share your ideas with this store owner by putting a comment on the blog!

I have two burning questions. I have been in business nine years. I bought an existing store whose owner had run it into the ground and claimed bankruptcy five days later. At the time, I wanted to change the name because I hated it (and still do). However, people around me were saying to keep it as it was established.  DUH it was going out of business... I shoulda, woulda, coulda.
Woman at clothing store smilingFast forward nine years. The store is rocking.  It's well branded, is a destination store, etc, etc. I STILL HATE THE NAME! Each time I give it at a trade show or whatever, I am embarrassed of because it does not encompass what we are at all. I have tried adding a jazzy tagline but it still irks the heck out of me. I am wondering about changing the name to coincide with our 10yr anniversary. I have other changes on the way and the building needs a bit of a facelift so we'd do it all at once and do an "unveiling" of sorts.... Have window lettering saying formerly ________.
I can't even imagine the marketing campaign I would have to embark on! However, lame as it may be, most of my customers call the shop Vickie's. I got it at Vickie's ... you need to see Vickie, etc.  Now I KNOW you shouldn't call a shop your name but it would certainly be an easy transition…customers wouldn't be that rattled by it... What do you think?  Is it EVER a good idea to change your name?  How much marketing are we talking here?
Now, if I can be so bold as to ask two questions, my shop started as a consignment shop. Over the nine years, we have become approximately 1/2 new product. There isn't much competition in my town... I'm IT if you want fashionable goods at a reasonable price. My NEW sales have now reached 70% of my total sales. At some point, I would love to switch over to just new as the consignment is labor intensive, etc. That 30% that the consigned is making me is still a good chunk of change though... I have divided into quarters how much more new product I would need to buy to sell that other 30% (working backwards) who knows?  Maybe I'd sell more if it was all new? The consigned goods are taking up ALL of my second floor (1200sq feet) and 1/3 of my main floor which is 1600sq feet so dollar for dollar, it's a no brainer... HELP!
I look forward to your reply.

Let’s break this down into separate discussion/learning points.  The first lesson to be learned, and I wish I had learned it earlier in my career, is that we must do our due diligence when purchasing a business. That means we have to do credit checks, check with key vendors, do focus groups with customers, and have all of the financials professionally examined with copies of the tax returns. The returns should be for the business, if it is a corporation, and the tax returns of the owners, therefore, avoiding some of the problems. 

Male sales assistant in clothing storeChanging the name when buying the business certainly seems like it would have been the optimum time. However, do not beat yourself up over that because even the worst of business reputations can still have some value. Let me share a first- hand example of one of my biggest blunders. I bought a 98-year old men’s store that was run down, but to me had so much potential.  Many of my customers shopped both my women’s store and this men’s store. Perhaps I was a bit arrogant because of my retail successes and because my store did seven times the volume than this men’s store did (my store did $2.1 million in sales, the men’s store did $300,000). I changed the name of the men’s store because I didn’t see any real value in it. The bottom line was it did not work and as bad as I thought the reputation was, it still had some brand awareness. 

As for businesses with terrible names, you are not alone. Can you tell me that Abercrombie & Fitch is a great name? Or how about Aeropostale (I cannot pronounce that name and had to go to a mall directory to find how to spell it), Swarovski, Crabtree & Evelyn, and L’Occltane? And then “but with a name like Smuckers it has to be good!”  I never realized that Shakespeare was a retail consultant when he gave the advice “what’s in a name?” 

Again, I had to live with a name that I hated for 25 years.  The name of my store was Ruth’s. Now when you put an apostrophe and an s after Ruth, you almost need to have a hair lisp to pronounce it properly. Plus it is an old biblical name which hadn’t really been used and has fallen out of favor for a couple of generations. Basically, we only knew old people who would use that name. And coupled with the fact that the store was located in a city that had a blue collar and a rough reputation, it made for a difficult image. People would think that we only sold clothes to tough little old ladies. Then when the miniseries Roots was first broadcast, everybody would spell my name wrong. If all of that wasn’t bad enough, I worked with my mother, Ruth, which made me Baby Ruth.  For twenty-five years of my life, I was referred to as a candy bar! 

But with all that, I took a store that did $279,000 worth of business with 900 square feet to a store that produced $2.6 million with 10,000 square feet. Yes, I thought of every which way possible to change the name but am glad I never did.

Next point – whoever said that a store should not be named after an individual?  Sorry, that is bad advice. There are more stores named after people who are highly successful. I will list a few – Kay Jewelers, Jessica McClintock, Johnston & Murphy, Ann Taylor, Auntie Anne’s, Max Studio, Joseph A. Banks, Victoria’s Secret, and Chico’s. One of the points that I have made for years is that regardless of the name of the business, they will still refer to the store as Vicki’s.     

My suggestion to any store owner is to put your name in front of the business’ name. An example would be a store named Timeless Gifts, but you put “Sue Smith’s Timeless Gifts” or just “Sue’s Timeless Gifts”. I believe in your case that would probably be the best way to go. Then slowing eliminate The Timeless Gifts.

The store is going to be called by your name regardless. Go with the flow! 

As for your question in relationship to marketing costs, it could be gigantic and you run the risk of losing customers. What will happen is there will be a rumor that will get started that you went out of business. You can spend a lot of money and only hurt your business rather than help it. PLEASE DON’T DO IT... LOOK WHAT YOU HAVE DONE SO FAR. 

Let’s discuss the issue of consignment. Consignment can be the best part or the worst part of retailing. Let me explain – if you do a consignment agreement whereby you’re splitting 50/50 with the consignee, the return on your efforts can be limited. The way I have seen consignment stores do the best is when the store owner treats the buying process the exact same way as buying regular merchandise. What I mean by that is you have to look at a piece of merchandise as if you were buying it and say “what could I buy this for so that I could sell it at the highest possible mark-up and the fastest rate of sale?” That means you tell the consignee that you will pay $5 for an item while you might put it out for $14.99. There are some people who just want to get rid of stuff and will take anything.  By doing the 50/50 split, you are leaving money on the table and besides it is none of their business what you price it at. 

I realize that this is a major departure for many consignment businesses. To my defense, I will tell you that the 50+ businesses who have taken this recommendation have thanked me all the way to the bank. This past year, one of the award winning businesses in Massachusetts at the RAMAE Awards Program was a store that coined the term “reborn” and created a small birth certificate that she placed on the merchandise. Look at this blog article from December 2009 that talks about the store which is named Izzy’s

Last point is the issue of eliminating consignment. This is a personal one, but trust me, if you are working on margins of 4, 5, or 6 times you have to pay the consignee, your feelings toward consignment change dramatically. A few years ago the thought was “let’s separate them”. But because of the popularity and the acceptance of this type of store brought on by the recession and our lingering economic woes, I would be reluctant to totally eliminate it.  Let’s see what the readers have to say. 

Please write in and I invite everyone’s comments. Share with us your opinions. I look forward to reading them.

P.S.  Why is there a bank named the Fifth Third Bank?  It sounds like two losers came together – fifth place and third place but went on to become a major force in banking today. Whatever happened to “we are number one”?      

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