My Christmas Wish…

“Peace on earth and goodwill toward men” is the classic Christmas wish that unfortunately seems like a pipe dream to me. For as long as I have been on this earth, there has always been someone hating or killing someone. If it isn’t rebels, it’s governments and if it isn’t countries, it’s senseless crimes in our neighborhoods.

So what does all that have to do with running a business or being a retailer? No, this isn’t a column about security; it is a column about my Christmas Wish to all of the business people who read my column and it might just apply to the rest of the world as well.

I will share my wish in the language that the words were first spoken: Italian. The words were uttered by an old Italian who was not famous for the words he wrote or spoke, but rather for his art and determination. The man is the great artist and inventor, Michelangelo. On his 87^th birthday, he said the words “Ancora Imparo” which mean “I’m still learning”.

These words have inspired people for centuries as they have inspired my family. My mother believed it to the core of her being and instilled them into her children. My mother, my sister, and I were never the greatest students (although my sister did graduate from Yale, which still amazes me), but we never stopped being students. There are so many really bright people who shut down their learning because either they feel as if they know enough or they are just plain lazy.

Last February I wrote an article about my sister’s friend who was going to be attending a trade show that I was speaking at. He was a partner in a retail business and the partner and spouses were all attending the show. These people were really bright and sharp but I was shocked at their attitude about attending any of the seminars at the trade show. They belittled all of them and how it was beneath them to attend any of them. Not just mine, any of them, and there were some top notch people presenting at this particular show.

I wrote in the article how shocked I was about how some people stop learning or think they have all of the answers. Well, my sister just informed me that they were going to be closing the store and were probably going to lose a lot of money. What if they had attended a workshop or seminar where they got one idea that could have rekindled the passion for business or given them the idea that could have made a difference in the survival of their business? I guess they won’t be remembered like that 87 year old Italian who never shut down his learning and NEVER said I know enough.

Through education and learning we see the world from different points of view, from different angles, and positions. We see the world in Technicolor. We start to better understand our customers. If that simple philosophy of never ending learning can make a difference within 4 walls of a retail store or the parameters of a website, what could education mean to all of the people of the world?

My Christmas wish is to commit ourselves to “keep learning, Ancora Imparo” and never stop. Maybe if we all kept learning and started to understand each other better, we might just find Peace on Earth and Goodwill Toward Men.

I wish you all the most glorious season of learning, loving, caring, and understanding.

I have to run now because I have one more present to wrap. It’s a sterling silver bracelet I bought for my sister that has the words engraved on it, Ancora Imparo.

T’was the Last Week of Christmas…

You are in the home stretch now with less than a week to go before Christmas. This can be one of the most fun, exhausting, and frustrating times of the year. If you are a real Christmas store, you will fall into either the fun or exhausting categories. But if you are what I call a “Christmas wannabe store,” you can’t wait till the season is over.

I just want to share some details about a client I worked for this past week and maybe we can all learn something from them. However, before I share the name of the client, I want to share some facts about them in the form of a little quiz. See if you can figure out who it is!

1. They have more locations than Wal-Mart, Target, and Walgreen’s.
2. They are located in strip centers, downtowns, free standing and even in some enclosed malls, but not many.
3. Every item they sell is their own brand.
4. Just a few other stores carry some of their merchandise BUT no one ever discounts it.
5. They never have sales and rarely ever mark anything down.
6. When their merchandise gets too old, they treat it like a collectible and they can sometimes even raise the price.
7. They might do newspaper advertising, but I have never seen it.
8. All of their employees get full benefits.
9. They work on the highest margins I have ever seen from any retailer.
10. Everyone who is reading this column has shopped there.

Give up?

It’s the Postal Service. The United States Postal Service carries more different items than any one store could ever carry. From first day issue stamps and envelopes to sheets of commemorative stamps that range from Jimmy Stewart to Yoda. Then there are T shirts, NASCAR style jackets (the Postal Service sponsors a car), to tote bags and even mailbox banks.

So What?

The postal service is just scratching the surface on its potential as a retailer. They have acres of diamonds in their own back yard and aren’t fully taking advantage of it. There are some wonderful Post Offices or Centers that do a terrific job of displaying many of the products they sell. Those are the Centers that have helped them realize the possibilities. I like to compare it to M&Ms, the candy. They have opened M&M stores all over and they don’t have half of the products the Post Office has. Yet they have been able to merchandise to create a must see and shop store. You can’t go to Las Vegas today without seeing someone carrying an M&M bag. But the retail visibility of the USPS is going to change because this is the first year The US Postal Service will be allowed to show a profit, which means they will be are starting to think and act like retailers.

What could you learn from that?

How many opportunities does your business have that for some reason or other you just didn’t get around to pursue? I know I have some in my business. A year ago my teleseminar series was just an idea that I didn’t spend much time on. But due to the encouragement from colleagues, associates, and my readers, it has become a very important part of my business and will be expanding significantly next year.

Maybe 2008 will be the year to start turning those potentials into realities.

Have a great week and remember the week after Christmas has become a much bigger week than the week before. Christmas cash never goes out of style and gift cards are bigger than ever. Gift cards bring customers who spend more than just the value of the card.   Have a wonderful week, a great holiday season, and a very Merry Christmas.

The Magic of Disney

I just spent two grueling days at the Walt Disney World with my daughter and her family. Yes, grueling because trying to keep up with a 3 & 5 year old can be exhausting. Living in Kissimmee, having 5 grandchildren, and having an annual season pass, I am at Disney quite a bit. But today I observed some things that I never really thought about before and some things that we can all learn from.

In this world of high gas prices, real estate prices dropping, and the talk of a recession, how busy could Disney be, especially in early December which is always a slower period? Well, I was shocked at how busy it was and the lines we had to wait in. The average attendance at the park at this time of year is about 30,000 people compared to Christmas day when they expect almost 200,000 people.

Understand the price of a full day ticket is $71 plus taxes and if you want to be able hop between the parks, it’s another $45 per day. After taxes it comes up to about $125 and it’s only $12 less for a child. Yet it’s busy and you can’t even negotiate for a better price at Disney. Here are some lessons we can learn.

Lesson One: It’s more than just price. Sell the excitement and the experience. If people want it, they will come and spend and spend.

Lesson Two:  Disney doesn’t discount but they do BUNDLE. If you buy a two day ticket you get a third day free. Or if you buy a three day ticket you get the fourth day free. Are you bundling like that? Are you putting items together to create one price? How many “2 or 3 fers” do you have in your business?

Lesson Three: Disney simply executes well. They know what to do and how to do it. They have an uncanny way of observing the tiniest of detail. They either do it right or they don’t it at all. Disney World has been open for 30 years, yet it is as fresh as the day it first opened. I heard an interesting factoid about Disney. They rotate their plants every 2 weeks. I am not sure on the validity on that but all I do know is that you NEVER see an old plant with leaves falling off it on a Disney property. They must do something to maintain perfect gardens. They are constantly training (of course they call it rehearsing) their cast to make every experience at every attraction consistent. You will be treated to the same level of service today as you were 10 years ago.

Lesson Four: Event Focused. This is becoming a topic I have become so passionate about. Disney is constantly looking for events that can be hosted at one of their parks. They are not sitting back just waiting for customers/guests to come because their product is so good. Think about it, I just said how wonderful and unique their product is and how well they execute. So why do they have to be proactive to attract customers? People just keep coming anyway. WRONG. People keep coming to Disney because Disney is constantly giving people a reason to come back again and again. They host more Cheerleading competitions, dance competitions, Marshall Arts competitions, and even Modeling competitions. The list goes on and on. Disney even offers classes to business people who want to learn how Disney teaches customer service and management. Are you as proactive about attracting customers as Disney is?

Lesson Five: Themes and Repeatable Sayings. It’s all about the Brand. This year’s theme that Disney is carrying over to 2008 is the Year of a Million Dreams. The message is reinforced over and over again in all of their advertising and promotions–the perennial theme, Disney World, The Happiest Place on Earth. Everyone believes that when you go to a Disney World, you will be happy. That is a lie but we believe it just like we believe in Santa Claus and The Easter Bunny. I know what you are thinking, how can you say that Disney World isn’t the Happiest Place on Earth?  Go there on a busy day. Get there as the Park opens and run to go on every ride and every attraction possible. Then have the sun beat down on you and make sure you bring 2 or 3 kids who didn’t get much sleep because they were so excited about coming to Disney World. And at 4:00PM, you look around at some of the most miserable, cranky, overtired, sweaty, shirt stained people in the world.

If it is so happy why can’t you buy a T-Shirt that says “Happy” on it? You can’t. I tried. You can buy Grumpy Shirts in every size, color, and design, not to mention hats with Grumpy on it in at least 50 different designs. But it’s The Happiest Place on Earth and we believe it because we trust Disney. Their brand is so strong that we believe it. We believe it so much that after a day where you have screamed at your kids more in one day than you have in a month, you feel so grubby you want to just throw your clothes away, and you have a stomach ache from all the junk food you ate, you come back the next day to the Happiest Place on Earth.

That my friends is Brand Loyalty at its best. I have been to some retail stores that are much happier places than Disney but Disney said it again and again and again until we all believe it. What is your recurring theme that you want your customers to repeat again and again? In my store it used to be It’s Right From Ruth’s. It’s a phrase with two meanings, both representing quality and even addressing the price issue. It subtly says that we are the place to go when it has to be right and it comes from a store with higher standards. My theme now as a writer and speaker is just as simple: “making a difference in the lives of retailers”.

Hopefully, that is what I have done in a very small way with this article. I hope all of my work does that but maybe I am just Dreaming Big. That’s another theme Disney taught us. I have to run now. I have to make a wish on a Star.

Have a wonderful week!

A Review and Lessons from the Winners

Last week we discussed the effects of lying or telling little white lies in business. I decided I would like to add a new section to my newsletter, which I am going to call Reader Responses. I have selected a few interesting ones for you to consider. I also want to thank all the people who wrote in. I feel guilty I am not including all of them but it would make this newsletter 50 pages long.

A Review and Lessons from the Winners

As many of you are aware, 11 years ago I had an idea to create an awards program for deserving retailers and unrecognized innovators in the retail business in Massachusetts.  Thus was born the RAMEA Awards (The Retailers Association of Massachusetts Awards of Excellence).

Over the past 10 years we have given out 64 awards to deserving and creative retailers from across the state. The Awards are in the areas of Visual Merchandising, Creative Concepts, Adverting and Promotion, Community Service, Rookie of the Year, and Retailer of the Year.

We had the awards ceremony this November and I want to share some of the highlights and share some lessons that we can all learn from these innovative retailers.

Before I go into details, there is one very obvious similarity that all of these stores share–their commitment to community service. They are involved in different ways but they all do more than just donating money. In many of the stores, it is that community involvement that has made their businesses prosper. Not that they got involved just to create business success but simply because it is the right thing to do. They all work hard to support local vendors as well. They share a sense or spirit of community connection that defines some of these businesses.

This article is not about community involvement but it is one thread that binds these winning retailers together. I won’t have time or space in this article to cover all of the winners but I will be featuring one or two  stores over the next few months. I look at it as my reserve of great material to share that leaves me the flexibility to be topical, add more Case Studies, and leave room for your comments.

Note: The RAMAE Awards are judged on creativity not just financial strength. So rarely do you have large stores win the awards.

The winner this year for Rookie Retailer of the Year, which is any retail business less than three year old, is one of the most unique and profitable retailers that I have ever seen. The name of the business itself is half of the businesses success. It is called Johnny Cupcakes. It is located on the most prestigious shopping areas of Boston, Newbury Street.  It sounds like a bakery, it looks just like a bakery, but it is an original designed clothing store specializing in limited edition designer T Shirts and sweatshirts.

Every piece is numbered and signed. The T shirts sell for $35 and the sweatshirts are $70. These shirts are only sold in the store or from their website. You can’t buy them anyplace else. The display areas have the same refrigerated units you would see in a bakery. The packaging looks like a cake box. They even have deluxe wrapping which is a hollow rolling pin with their logo on the pin.

One of the coolest things is their size measurement chart. It is done using the same design as a nutritional label on any commercial food product. It’s different!

Yadda, yadda, yadda, big deal that’s really different. Now here are some other facts that MIGHT just make you read the last couple of paragraphs again.

Johnny Cupcake designed apparel has quite a cult following. The logo is a spoof on pop culture. Instead of the pirates Skull & Crossbones, Johnny has a Cupcake over Crossed Bones. When a new T Shirt is going to be released people camp out in front of the store the day before, spending the night in sleeping bags on the streets of Boston. I thought they only did that for Red Sox tickets.

They sell out in a day but the early numbers have a collector’s appeal. It gets better. Johnny Cupcake is a 24 year old college dropout who has been interviewed on CNN, CNBC, The Wall Street Journal, VH1, MTV, and the Big Idea with Donny Deutsch.

Johnny Cupcake’s real name is Johnny Earle and he is just a wonderful young man who is so proud that he was able to hire his parents. The business is actually 4 years old but he has been a retailer for only 2 years.

I am saving the best for last. This year, the end of his second year as a retailer, he will do $3 million worth of business, not to mention the amount of companies that want to buy his business. He is expecting to do $4 million next year as he adds his new jewelry line.

Do you think he is making money? YOU BETTER BELIEVE IT! He has no traditional vendor bills and works on huge mark ups. Yes, he is a savvy retailer and is doing things instinctively that all of us need to understand. As Johnny told me, “I’m just doing stuff that makes sense to run a business and I believe is right.”

He started by making these really cool T-shirts in his basement that he first sold one to one, flea markets, etc. He even sold them to stores but quickly realized that he was giving away a big chunk of his profits and had to wait to get paid. He thought if he sold them from his own store, it would make his merchandise more exclusive and therefore more desirable. He paid for a high profile location but never spent a penny on advertising, other than the cost of his website. (That’s the power of signage. His sign and location act as a billboard drawing customers to the store.)

He is listening to the beat of his own drum. He is making his name the valued asset, not some other manufacturer. He figured out the power of private branding and why every retailer needs to adopt it. It makes your merchandise exclusive, no other store can carry it.

I received an email from a reader this week that asked what should she do about a sales rep who sold her top lines to her competition. Johnny Cupcake will never have that problem. Don’t become dependent on someone else’s brand. Be different and special and people will talk about you. Make your location your billboard and you won’t have to spend money on advertising. Spend the money on packaging because it’s the gift that keeps on giving. That’s how business happens and that’s why a streetsmart kid for Boston became rich and an overnight sensation.

Look for more stories about the winners in the upcoming weeks.

Reader Responses
The Lessons from Black Friday

Rick,

First – thanks for the postings – they almost always give me something to think about.

Lying.  Lying is always problematic.  We are told as children that lying is bad.  As we grow older we continue to believe lying is bad – in our heart of hearts – but we also come to realize that we live in a world where the “truth” is often just cruel.  So, we have a category of “harmless” white lies.

And what is the truth in retail?  The underlying principle – I can buy something for one price and by putting it on my shelf make it more valuable and charge you more – is at best a shady proposition.  We set prices reasonable or otherwise – but do we reveal our markups?  I know personally that we barely eke out a profit – but if I told an average customer what our markup was – they would think I was ripping them off.

Advertising is subjective.  Unless your ad is only about measurable physical attributes of a product – you are probably “puffing.”  Which is, of course, a euphemism for “lying acceptably.”  Ours is a business built on an mutually understood bedrock of untruth.

Which is not to say the lying is good.  There are obviously times and practices where things clearly cross the line into deception.  The tricky part can be recognizing the fuzzy line where that starts to happen.  Further, great businesses have been built by people who are rigorously truthful – while still operating with the  underlying “stretching” of the truth that is retail.

In the case of the wedding dress:  In seems to me, if you strip the situation down, you (the seller) are in the same bind I am when any of my friends casually ask “does this make me look fat?” or “am I fat?”  I  then have to know whether they are looking for an answer or reassurance.  The seller’s situation is further complicated by obligations to both the customer and to the health of their business.

Well, aren’t I the long winded one?

Thanks again for the things to think about.

Douglas – The Octopus’ Garden

I agree with little white lies. I too have brought in Off price, and disc. continued items purchased on closeout, and introduced them as new…..new to us at least.  I also tell everyone that things are great. I think it is like when people ask how you are…..they just want to hear OK and then to talk about themselves…so make them think they are shopping in a super place where everyone is happy and nothing bad ever happens. It is there get away fun time, so make it like Disneyland. They don’t need to know what goes on behind the “employee Only” area.

Glad not everyone has a great sales experience during Black Friday and Saturday. In fact Xmas isn’t 75% of my years sales like you hear so much about. It is just a good quarter, but not Even 25% of my year.

Pat Lorenzo

Wow Rick, Well said!  I tell my employees all the time, if someone asks how business is, tell them GREAT! Don’t tell them, oh, we are kind of slow, etc, b/c no one wants to be somewhere that no one else wants to be!! I am printing this article for my employees  to read!

Thanks!
Natalie ~ Cafe’ Kiln

Hello Rick,

Black Thursday is for Big Box stores, created by Big Box stores and the media.  They need something to report on…somewhere to send their people on Thanksgiving.  Truth be told that wasn’t the greatest Friday and Saturday for my small retail store in a destination historical downtown.  However, beginning Sunday and on we have kicked it into high gear.  So the moral of my story is…let them all have “Black Thursday”, and I’ll take the rest of the holiday season for my “Black” time of year!

Dear Rick,

I just finished reading this weeks newsletter regarding Black Friday.

Our business is a vacuum sales and service retail store.  We also sell a portable heater, the Solar Comfort, air purifiers and many floor care and cleaning products.  In fact, several years ago, you were the keynote speaker at our convention in Las Vegas.  Anyway, about 5 years ago, we decided to try a Thanksgiving Weekend sale.  We knew it wasn’t supposed to work for specialty retailers like ourselves, but we decided to try anyway.  We kept our normal hours but offered up to 20% off on our vacuum cleaners.  The only advertising we did was a full-page, color “wrap” that is in our local Thanksgiving Day newspaper.  The results were not what we expected…it was a success and has grown every year.  This weekend, however, our projections for the 2 day sale were way off.  We projected $30,000 in sales and actually ended up with slightly over $43,000.00 and 159 total transactions.  I share this with you because I think smaller retailers think they can’t compete with the “big boys” … well, maybe we can’t compete, but I believe our experience has demonstrated that it’s worth a try at the very least.

Sincerely,
Sandy Berkshire