We can learn from the best practices of retailers in other industries.
by Gordon Hecht, Ashley Bedding
I always thought of myself as a retailer. I’ve been on the retail side so long I tell people I was born on commission! Probably, you’ve been around the store side for a long time, and eat, drink, and think RETAIL as well.
Towards the end of 2010 I had a conversation with someone outside of our business, and she made a comment that has stuck with me since. “Think like a Retailer, not a Furniture Guy”, she said.. The more I thought about it, the more I started to understand that while our business is different than other retail stores, we can still watch them and learn from them. Here are five important differences between what many of the best retailers do and how most furniture retailers conduct their daily business operations.
Retailers recruit every day, not just for the holidays, not just when they have an opening. Go into any Target, Best Buy, J C Penney, or even the neighborhood convenience store. Chances are they have a recruiting poster, on-line application kiosk, or some other way to let people know they are looking for good people. Those retailers know that sometimes the best employees are people that shop their stores and buy their products. Maybe their turnover is higher than ours, or maybe they monitor productivity a little better. Either way, they understand that they lose money when there are holes in their staff schedule. Take a look at your store. Do your shoppers know that you are looking for GREAT people to represent your products? And if someone wants to join your team, are you prepared to give them an on-the-spot interview? Create a process to interview EVERY candidate the first time they stop in for an interview. Organizations that delay a first interview for 24 or 48 hours lose the best candidates to companies that interview on the spot.
Retailers expect their customers to visit their store several times per month. No matter the season or the weather I find myself shopping in Wal-Mart 2 or 3 times a week. You probably know someone who shops Kohl’s every week for their “Greatest Sale Ever”. Just because someone buys at your store doesn’t mean they are out of the market for the year. Your customers have multiple rooms and multiple furniture needs. Business goes where it’s invited and returns where it’s appreciated. Your best prospects are the people that already purchased from you. Keep in touch with them! Start by developing a list of your 50 best customers. Use a personal call from the Store Manager or Store Owner to invite them back for an exclusive offer. Everyone loves receiving a birthday card or anniversary card. Be sure to congratulate your clients on their special days and they will remember to visit you!
Retailers expect shoppers to buy on every visit. Did you ever wonder what the “close rate” is for Wal-Mart, Macy’s, Wendy’s, or Lens Crafters? Chances are that it is greater than the 18-28% many of us experience. And don’t bring up price, because we have sofas priced less than Lens Crafters eyeglasses! The truth is that those stores EXPECT everyone who comes in will buy AT LEAST ONE ITEM. Think of where your sales would be if ONLY 50% of your shoppers walked out of your store with a purchase! The biggest reason shoppers don’t become buyers is that nobody asks for the sale. Do you and your team really assume that every up will buy? If not, why not?
Retailers know the value of credit. Okay, right now, things are unusual in the credit market, but overall, customers are more likely to shop where they have established credit. Shop most retail stores and the cashier will ask you if you want to put your purchase on the store’s charge card. Dare to say you don’t have one- and you will be asked once or twice to open an account. JC Penney predicts that every card they issue is worth $80,000 in retail sales in the holder’s lifetime. That’s $2,000 a year for forty years. We can’t predict the next forty years, but the idea of having every card we issue bringing in $2,000 in sales for the next 5 years sounds pretty darn good right now.
Want to cut down on collection costs? When your customer wants to use their Visa or Master Card offer them 90-Day terms. It will save you 1.5 to 2 points, your customer gets 60 more days to pay, and you are on your way to creating a loyal customer.
Retailers get rid of slow movers. They all have clearance racks, bargain basements, and sidewalk sales. Once merchandise is out of season, discontinued, under performing or over parked, retailers move it out, and price it to move fast. It can be day old bread, bikinis in November, or Detroit Lions Championship T- shirts; if it didn’t sell it gets moved out to create cash and to invest in new items. Kohl’s moves it out at 70% off, Wal-mart goes about 40%, and Kroger’s goes for pennies on the dollar. Look for discontinued and damaged items on your sales floor and warehouse, old accent items, shopworn items and non-movers. Plan to convert them to cash by pricing them to sell TODAY.
Our retail world has seen a lot of changes in the last couple of years and we are sure to see more. You’ll never lose if you see what the winners are doing and adapt it to your operation. In short, think like a Retailer, not like a Furniture Guy!
Other Things Good Retailers Do
- Ask “Did you find everything you need?” at the cash wrap.”
- Ask you to buy a $49.95 warranty on a $99 item. Doesn’t make sense, but I’ll bet they sell a few.
- Send a promotional offer in the same envelope that they use for their credit card bill.
- Know where everything is in their store. Go into Home Depot’s Plumbing Department and ask where the nails are. They know or will find someone who does.
- Lead, don’t point. That’s Nordstrom’s rule. If a shopper in the menswear department asks about silverware, they walk them over to that department.
- Have no fear of prices. You can buy Suave for a buck eighty-eight, but go to a hair salon and shampoo can be $15-20 for a six ounce bottle. Their loyal customers buy it and come back for more.
- Want it all! Carpet One will sell you one room of wall-to-wall, but they want the whole house. Walk into Men’s Wearhouse for a suit, and you’ll walk out with a shirt, tie, shoes, and a belt. I guarantee it!
- Look the part. Everyone at LensCrafters wears glasses. Everyone at Jared’s Galleria wears twice as much bling as the average person (except for Mr. T). Don’t even get me started on Macy’s Cosmetic Counter. I don’t mean wear a sofa, but dress with style, fashion and color.
Gordon Hecht is Director of Sales for Ashley Sleep division of Ashley Furniture Industries. He started his 30+ years experience in the Home Furnishings industry in Las Vegas, NV as a delivery helper and driver. From that ground level start he started his sales career-and passion for our industry-while in college.
He has been recognized for outstanding sales and management achievement with several organizations including Drexel-Heritage, RB Furniture, Reliable Stores, and Sofa Express. He has served as Store Manager, Multi-unit manager and Director of Training. With his first-hand knowledge of our industry’s front line Gordon has devoted his career to guiding others to exceed their goals.
Joining Ashley Furniture HomeStores in 2007, Gordon managed a 44 store district covering 11 states and 4 time zones. He joined the Ashley Sleep team in 2009 and has worked to make it one of the fastest growing bedding lines in the country.
Co-author of the “Better Bedding Selling Tips” featured on Furniture World Online, Gordon has been a frequent contributor to company newsletters, and contributing writer for industry magazines. Gordon is based in Columbus, OH and is married with one adult son. He can be reached at ghecht@ashleyfurniture.com