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10 Insider Tips for Retail Success

Learn some of the ins and outs of successfully running your own retail location from a tween clothing and accessories retailer.

By Devlin Smith

Margarita Olivares doesn't operate typical retail stores. In her shops, the walls are pink, floors are covered in animal-print carpet, employees wear fluorescently colored wigs, and merchandise is often furry, feathered or glittery. This combination makes Olivares' two Glamdora--It's a Girl Thingstores a bit of girl heaven. Operating stores in Corpus Christi and San Antonio, Texas, keeps the 30-year-old mother of four on her toes. It also makes Olivares, who's currently featured in the AOL/Entrepreneur.com series "The Startup" (AOL keyword: The Startup), a great person to talk about what it takes to run a hip retail concept. We asked her to share her secrets for keeping a business running smoothly and successfully, and here are her tips:

Where you at? Choosing your location is the most important step in making your dream of owning a retail store come true. What good is it if you have a great staff and awesome merchandise but no customers? You should choose a location that has a high traffic count. A new retail store isn't going to have a following unless it's a franchise with a well-known name, [so if you're independent,] you'll need all the help you can get. Ideally, you'll want to be next to non-competitive retail businesses that have steady clients; the overflow from these businesses will drive your walk-in traffic and bring in new business for you immediately. If you're looking into a new shopping plaza, you'll need to ask for the demographics of the area. This will ensure that you're not opening a high-end store in a low-end part of town. Be aware of your surroundings, and take your time choosing the perfect location. Don't choose a location just because it' close to your house.

Big brother. Mall management has a job to do, and it's to make sure stores coming into the mall or those already in the mall are following all the guidelines and policies that pertain to each individual lease. But management should help new tenants become more familiar with the mall because malls are run by a strict set of rules, and breaking one of the rules can break your pocketbook. Opening late, for example, is prohibited and requires a monetary fine to be paid to the mall. Mall management teams are very professional, and it's best to have done your research before attempting a meeting or negotiating with leasing managers.

Stocking your shelves. Selecting merchandise for your store can be the most time-consuming and expensive part of opening a business. This duty shouldn't be taken lightly! Before opening your store, you should visit wholesale marts to get an idea of the merchandise you'd like to carry. Decide what your mark-up will be and what's appropriate for your area. Choosing the merchandise can be fun, but remember to maintain a general theme and purpose for your products. Discuss ideas with other retailers at the mart, and ask the sales reps for their ideas and suggestions. You'll find most people are willing to help and discuss their experiences with certain products. This will help you decide and narrow down [your choices to] products that will do well in your store.

Keeping a theme. I maintain a theme in my store by staying true to our name: Glamdora--It's a Girl Thing. Customers know what to expect when they come into our store: They expect to see merchandise for girls--not many stop in to see what we have for boys. Keeping with our tagline, we include merchandise for girls of all ages: nail files, gifts, room decor, shoes, accessories. They're all chosen for their colors and merchandised by theme. Our stores are hot pink and lime green with zebra and leopard accents. With that theme, I choose merchandise that appropriately fits my store. I choose the nail files in hot pink, gifts in bright colors, room decor in zebra or leopard, and so on. [Sticking] to your theme will help you build loyal customers and create a unique store in the process.

Stay current and stay true. Don't think you know it all when it comes to trends. Keep up with local as well as national trends. You might see a particular look plastered all over the TV or in fashion magazines, but know your market. Will it sell in your store? Does it fit your theme? And don't attempt to sell anything that's way out of your normal buying budget just because it's trendy. The best thing to do is listen to your customers. Customers will always let you know what they're looking for, but only if you ask. Visit your nearest wholesale mart to preview upcoming trends and new products.

Hiring and Management
Good kids. It's inevitable--you're going to have young people work for you. Hire a young person who has a desire to know more about your type of business. A person who's really interested in cars but wants to work in your clothing store might not be as suitable as someone who's attending classes in fashion design. When interviewing a young person, ask them about their interests and hobbies, and what they feel they can offer you as an employee. I like to ask what they feel is their best attribute.

Second in command. Check all management applicants' references, and require a resume. Advertise for a manager if your budget allows and only if you're prepared to offer competitive pay. A management candidate should have at least one year of management experience and two years of retail experience. Ask them numerous questions about software, cash handling and, most important, management skills pertaining to customer service and employees.

Loss prevention. You can always expect theft--count on it and set your prices because of it. The only way to find out how much you're losing is to do inventory. I have a POS [point-of-service] system that's run from my PC and has real-time inventory. It doesn't have to be refreshed and can tell me right then what I have on hand. Keep your employees honest with cameras. If you're selling any small items that people are going to walk off with, keep them in secure cases. Make sure employees bring clear purses to work--or no purses at all. You always have to take precautions.

Drawing In--and Keeping--Customers
Everything must go! Have a specific place for your sale items. Customers should be able to easily distinguish sale items from regular merchandise in the store. Placing your sales items towards the back of the store will force customers to walk by the regularly priced merchandise before coming across the sale items, thus increasing the probability for sales of regular merchandise. Clearly mark your sales prices on all your merchandise and on signs that will grab your customers' attention. Storefront signs will also increase traffic flow and let customers know there's a reason to stop in your store, and you might grab new customers who [want to] give you a try and see what you have on sale.

Good as gold. Customer service is key to any successful business. Any smart business owner will tell you that customers are gold and should be treated as such. I always remind my employees that customers pay their checks and deserve their undivided attention at all times. Customer service isn't just telling a customer "hello"; it's also about helping them to their car with their packages and making sure they had a great experience while shopping in your store. Each customer should be treated the same and given equal attention whether they buy something or not. Treat your customers with respect, and always go the extra mile for them. Word of mouth is priceless--your best advertising can come from a happy customer. All it costs is your time.

Retail Management's role in Customer Service

On a recent driving trip through Arizona and New Mexico I found myself in a number of very small towns with few restaurant choices. While I typically try to avoid fast food I decided that one national franchise chain would have to do for breakfast, as they were found in almost every small town in that region of the country. The food served was actually decent and made for a reasonable start to the day, particularly while driving through the high plains of northern New Mexico.

During my stops I did notice, however, a particularly interesting response to the dollar-off coupons that corporate had distributed to the franchisees to push sales - they were being distributed with each transaction, but nobody had been trained to accept them. Repeatedly when the coupons were presented with an order, the entire transaction stopped, while associate after associate took turns giving their ideas on how to ring them in to the POS system. 

I literally sat at the drive-up window while cars waited behind me long enough for them to drive off. On one occasion all the associates came out of the restaurant to serve the cars behind me by walking the food out to the cars, taking money and having to make a second trip out to make change. As somewhat of a type A personality, I didn't like being made to wait like that, but I did recognize the chance to learn from this situation and I made it worth the anxiety. 

I think this situation was a very clear example of how a retail management department (Marketing) can do an admirable job of creating a sales stimulating promotion, but the field staff must be trained to handle the promotion. Likewise, the IT department must insure that the POS system is ready to process  the transaction with the promotional coupon in a very simple manner. How many other times have we been in stores and had to wait while an associate is unable complete a transaction? 

This very basic situation presented an extremely clear example to me of how important it is for all of our retail activities to have a customer service focus (not just sales promotions). We need to be continually asking ourselves .... "How do all my procedures effect my customer service? Should they be improved? Am I driving more sales or am I driving my customers away? In this instance, despite the best intentions of the marketing department, I observed the coupons were costing the retailer approximately ten times the value of my transaction - on sales lost while other customers literally drove away due to the excessively long transaction wait time. I have seen the same end result occur in line in numerous stores when the sales associate could not complete a transaction, due to different types of complications ranging from no price shown to register problems. 

Do you know what your customers are experiencing?? 

Very Important and Useful Retail Facts That May Assist You

Among the many various retail facts that exist, a few of the more pertinent are as follows:

  • Almost 70% of typical shoppers feel that their needs are not first in the minds of retailers
  • Most shoppers (almost three quarters) are prone to buy the item they want when they first find it, and more than half know specifically what they want when they go shopping
  • Almost half of today’s shoppers do not enjoy shopping in large stores, but they do so because they feel there is a better chance of finding the merchandise they want
  • About half of all shoppers say that saving time is more important than price – particularly men
  • Location continues to be an extremely important factor in your retail success – unless you have an extremely compelling reason, your customers will not spend a lot of time and energy locating you

Ideas For Merchandising Your Sales Floor

Merchandising a sales floor can be a big challenge for some people and a very simple task for others. Actually, there are some general "display rules" that can help you to develop a basic sales floor look and you can make adjustments from that point to further refine it. A number of sample "rules" are listed below for your use and we ask that you send us your comments as you think of new and even more refined ideas to help others.

  • utilize walls as well as floor fixtures

  • wall fixtures are useful for highlighting merchandise

  • merchandise wall fixtures small to large, left to right, top to bottom

  • keep fixtures straight and parallel to any area borders (like carpet border)

  • insure that floor fixtures have attractive, easily understood, attractive signage

  • insure fixture signage faces traffic pattern

  • insure fixture arm heights are consistent and symmetric

  • use a fixture with the proper holding capacity (density) for your store (low, medium, or high)

  • do not let goods on a fixture touch or drag on the floor

  • insure your store merchandising will permit an un-obstructed view of the sales floor for customer service help and security

  • insure at least 36 inches between all floor fixtures on all sides

  • rounders are often the best fixtures for clearance merchandise

  • utilize fixtures that are a consistent type and height to insure the sales floor is consistent

  • do not use rolling hanging racks on the sales floor

  • beware using vendor-supplied fixtures as they may disrupt the consistent look of your sales floor

  • dump bins for select small merchandise, used sparingly, can be a useful tool

  • "colorize" merchandise by varying colors from light to dark and sizes from small to large within each color

  • "colorize" rounders counter-clockwise

  • "colorize" a wall grid across from left to right, then diagonally down and then left and right again

  • "colorize" rounders first then assort each color by size

  • never put more than two colors on an arm

  • insure color scheme of store is in balance

  • never mix stripes and paisley patterns

  • show individual items and complete outfits

  • hang pants at mid length

  • create merchandise grouping based upon the type of goods being sold

  • avoid mixing different items on an arm

  • keep different categories of merchandise on different rounders

  • shoes display pairs are best displayed close to eye level

  • display key margin items and featured items as close to eye-level as possible

  • insure all merchandise displayed is neat, steamed, folded, zipped, buttoned

  • face hangars the same way and separate (space them out) by 1 inch

  • do not mix hangar types

  • keep chrome fixture clean by dusting and wipe off finger prints carefully (try wax paper)

  • size collars are helpful if merchandise sizes are difficult to see on vendor tags

  • insure your price signage is accurate

  • take pictures of your well-merchandised sales floor to help associates understand the look you want to maintain

  • keep your sales floor full and your stock-rooms empty

  • develop a sales floor plan - see example - before placing merchandise

  • "recover" your sales floor at least once per day to neaten up merchandise handled by customers

  • dust and vacuum daily, clean linoleum and wood floors 2x per week, clean restrooms 3x per day

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

New Store Opening Checklist - Add To Our List!

We created and initial general list of the items that a store owner will have to consider when opening a retail store. This list is intended to be the start of a very comprehensive listing of the steps that need to be considered, but we need our readers to ADD TO THE LIST via the comments button at the end of the article. We will keep expanding the list as new ideas are submitted.
  • get all needed planning tools and templates
  • develop business plan
  • perform market research to determine sales potential
  • develop a financing plan and sources of capital
  • secure financing
  • set up corporation
  • open bank accounts
  • select location
  • negotiate lease
  • get all licenses and permits
  • set-up all utilities
  • select contractor for internal/external re-fit
  • develop construction plan
  • develop full checklist with key dates
  • buy/lease phone system
  • decide sales floor fixtures to utilize
  • develop a sales floor design
  • select lighting/final colors/HVAC/sales floor props
  • determine sales tools needed in the business
  • select security system/change locks
  • get computer/cash register/POS system/other software
  • get cash handling equipment and safe
  • do initial merchandise selection and purchase
  • develop operating/ HR/customer service policies
  • determine benefit plans
  • advertise for and hire associates
  • train associates
  • physically set up store
  • order store supplies
  • develop any forms/communication policies
  • set dress-code policies
  • set merchandise prices
  • plan openeing sequence
  • set up store systems/POS/credit card links
  • create sales floor signage
  • set-up attorney/HVAC/plumber/electrician/cleaning service arrangements
  • determine store hours
  • do final punch list review with contractors
  • meet neighbors
  • insure parking space available
  • do soft opening
  • do grand opening

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

How to Find Great Sales Associates

One of the smartest approaches that we have ever encountered to finding truly great sales floor associates is so simple that few retailers do it - yet it produces the best results. The secret is to "GO SHOPPING". Make it a point when you are shopping for your own needs to pay close attention to the level of service that you are receiving form the sales associate who is assisting you.

The average sales associate turnover rate is typically over 100%, meaning the "average" sales associate tends to stay with their employer less than a year! Use that statistic to your advantage and start a conversation with the associates that impressed you the most, get their names and tell them you might be hiring and ask them if they would be interested in speaking to you about a position in YOUR store. BE SELECTIVE and hire the people you really want instead of the person who walks through your door to answer your help wanted ad.

Ideas to Help You Effectively Merchandise Your Store

Studies have shown that customers buy when you deliver properly chosen merchandise, sold in a pleasant shopping environment. This merchandise must also be well presented, properly priced and most of all – in stock. Merchandising is more of an art than a science, but there are a number of general guidelines that you can consider when placing your merchandise on your sales floor. Some of the most important ideas are as follows:

- Maximize your sales floor space - you cannot sell merchandise out of your stockroom
- Present your merchandise in a fashion that supports a counter-clockwise customer traffic flow, which is common
- Create unique departments with logical complimentary merchandise
- Make sure your offering is deep (numerous different types of the same item) as well as broad (numerous different items) as long as you can keep the items selling
- Try lifestyle merchandising, appealing to customers who lead a certain type of lifestyle and buy related goods
- Consider what types of sales floor fixtures will work best for you and show your merchandise in the most attractive manner – these can be low, medium, or high-density fixtures
- Know your top twenty profit margin items in your store and feature those items prominently
- Make sure you utilize the right number of checkout areas (cash wraps) so that customers do not have to wait long in lines to check out
- Make sure your signage (for departments AND pricing) are attractive and easily understood
- Merchandise high-margin “impulse items” near the check out area
- Create a tasteful clearance area in the store to collect old and slow-moving merchandise, mark it down aggressively, and sell it as fast as you can
- Watch your customers shop and pay attention to where they go, the order of departments (or areas) they tend to shop in, and where they spend most of their time – then re-do the areas they are least attracted to

These basic ideas will help you to drive more sales and will make the sales you make more profitable. Additional ideas can be found at the Furniture World website.

What is “ZONE COVERAGE” and How Do You Implement It?

A concept adopted by large retailers to help their organizations organize and control the sales and/or operational activities that occur on their salesfloor is called “Zone Coverage”. The concept itself is easy to understand and relatively easy to employ. Basically, well organized retailers map their salesfloors into specific areas or “zones”. A zone can be part of a department, an entire department, or even parts of multiple departments. The area that makes up a Zone is more dependent on the physical layout of the salesfloor.

Each zone is the responsibility of specific store associates who are assigned to perform selling and/or operational duties only in their zone. The value in this approach is that store associates gain a better understanding of the duties that they must perform, the times the duties should be done, and where those duties are located. All confusion about who is suppoesed to do what jobs is eliminated.

Make Sure You "RECOVER" Your Stores

Creating an inviting shopping environment is one of the most powerful things that a retailer can do. Large retail firms spend untold millions on the look and feel of their shopping environment, knowing that they must impress their shoppers in order to keep them coming back. The average store, in fact is re-modeled about once every 7 years on average – and that does not take into effect the additional ongoing maintenance and sprucing up that is done on a regular basis.

When a customer enters your store one of the first things they notice is the cleanliness and neatness of your facility. While a belief exists that many shoppers enjoy a messy environment that creates the need for them to “dig and hunt for great buys”, the truth is that few retailers rely on that operating strategy to drive sales. I do not recommend it. In order to keep shoppers coming back you first need to provide them with a neat and clean environment to shop in and then impress them with your merchandise content, in-stock condition, and sharp pricing.

While we depend on our customers to keep us in business, they can be messy, sometimes very messy in their shopping habits. In order to deal with that fact, every retailer needs to have some plan for how they will neaten up their store(s) after a busy shopping day and get ready to impress their customers once again. This process is typically referred to as “Recovery”.

We recommend that every retailer have a specific plan in place for how to neaten his or her stores on a regular basis (daily) and a method to calculate how much employee time it will take to make that happen. Observing your employees (store associates) performing the recovery task and getting an average time per aisle will help you to estimate how much time per day you should allocate to get the recovery task done. We suggest telling your associates how much time they have allotted to them to recover a given area and let them try to beat your goal.

Whatever means you employ, the most important thing you can do is make sure that "recovery" happens. Customers who think you have a dirty store will stop shopping with you and will quickly find another retailer to visit.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

How to Determine How Many Store Hours to Schedule

Large retailers utilize very complex and very expensive software programs to calculate their staffing needs. Many utilize the programs effectively, some do not. The concept of calculating store staffing levels is actually rather basic and can be done by a small retail organization on a store by store basis by utilizing a few key concepts.

First, the retailer needs to think about their store tasks in groupings of similar functions. An example might be all selling tasks on the salesfloor. Second, the retailer needs to create productivity benchmarks for each of the function groups, making sure to include all of their employees in a group. Examples of possible function groupings might be as follows (yours may vary):

- All selling tasks (including returns and adjustments)
- All receiving, processing, merchandising tasks
- All maintenance, housekeeping and cleaning tasks
- All recovery tasks (neatening up after your customers)
- All pricing and signage tasks
- All clearance merchandise tasks

For each grouping, like above, you should then select one key task or type of work for each group that can be easily measured and calculate an overall productivity benchmark for that group. See the article on developing productivity benchmarks for more information. Using the benchmarks, if you then project what your workload may be next week or the week after you can calculate how many hours of employee time you will need to get that amount of work done. See below for an example:

Having this detail will tell you that you may need 43.5 hours to run your store for the period you are looking at based upon your forecast of the workload coming up and the time it takes to do the work. Sophisticated retailers use this type of logic to develop staffing guidelines for the week then schedule the hours by day based upon their knowledge of when the work will happen. For example, if most of your sales occur on Saturday, then you should make sure you schedule most of your selling time when your customer traffic will be heaviest.