Black Friday has come and gone. Early reports have the National Retail Federation holding firm to its forecast of a 1% decrease in holiday sales this year. The projected decline comes on the heels of a 4.4% decrease in 2008. Ouch! Happily, many independent craft store owners are experiencing solid sales despite the gloomy economy. Are you among them? If not, it is time for change.
What is the crafty retailer to do?
Take a look at your business model and fix it, of course!
I recently had an opportunity to speak with Debby Luttrell, owner of Stitchin' Heaven in Quitman, Texas. Deb had twenty years in the "corporate world" before she became an entrepreneur. A sales executive with GTE (now Verizon), Debby was part of the team responsible for implementing the procedures which earned the company the prestigious Malcolm Baldrige National Quality Award in 1994. The Award recognizes companies that offer extreme customer service. Previous winners have included Nordstrom's and the Ritz Carton Hotel Chain.
Clearly, Deb knows a thing or two about delighting her customer base!
Ms. Luttrell opened a 1000 square foot shop in 1996 in tiny Quitman, a town which is home to 2030 residents. Her store is 80 miles from Dallas, and the nearest sizable town is 60 miles away. Deb knew that the locals would not drive enough traffic to her shop to sustain it, so a viable internet presence was always a part of her business plan. She started with two part time employees and 600 bolts of fabric. She liked to sew, but did not know what a "fat quarter" was and had never put a binding on a quilt. Fast forward to 2009....Stitchin' Heaven is now a "destination quilt shop" that boasts 7200 square feet and 6000 bolts of fabric. She employs 18 full time employees, as well as several part timers. Her internet sales are strong and she has a loyal group of customer ambassadors...both online and in her shop. Deb writes a business column for the American Quilt Retailer, is a featured speaker on business topics at The International Quilt Market, recently launched "Sew Much Travel" to organize quilt friendly vacations, and has a successful consulting business which includes a three day "Boot Camp" for Quilt Shop owners. WHEW! But wait...there is more! You haven't even heard the best part.......the business is PROFITABLE! Yup, Deb actually pays herself! [Insert sounds of hootin' and hollerin' here].
Deb has some great advice for those of you interested in profitability and here are some snippets from our conversation:
1. Customers vote on you with their wallets. If someone comes into your store and leaves without making a purchase, they have just voted against you. You need to figure out why there was a disconnect. Wrong product? High price point? Poor Customer Service?
The E Myth by Michael Gerber and read it. Read it again.
4. Learn to manage your employees. This is a tough one for many women. We want to be liked. We abhor conflict. We do not want to be perceived as...well.... "bitchy." We need to get over it! You have a right to tell your employees how things are going to be done and they have a responsibility to follow the rules. Do not let your employees hold you hostage. Who's the boss? You are! Thatagirl!
"The More, The Merrier Event" where customers receive 20% off all in store and online purchases from Thanksgiving to December 24. OK, its been done, right? It gets better! Every time the customer makes a purchase during this period, the discount increases by a percentage point. Visit one: 20% off, visit two: 21% off and so on. The maximum discount is 40%. The event is successful because it injects some fun and levity into what would ordinarily be nothing more than a percentage off sale. Here are some other winning ideas a la Ms. Luttrell:
*Class Ticket: You can be CLASSY or SASSY....or CLASSY AND SASSY! The CLASSY TICKET costs $60 and entitles the recipient to attend all classes FOR FREE for a six month period. The SASSY TICKET entitles the bearer to receive 20% off all purchases for a six month period. Best Bet: Be CLASSY and SASSY for only $100! Classes are taught by staff members who are paid an hourly wage, so the free attendance is not a problem. This program is a wonderful way to encourage a sense of community!
*VIP Coupon Program: Customers pay $25 for a coupon book which contains lots of great store savings opportunities, including a coupon for $25 off a high margin kit. WIN-WIN!
Block of the Month Program. This promotional event is a cash cow, representing a significant bit of business. Most quilts are made up of a series of separate quilting "blocks". Each year Deb and her crew decide upon 25 different quilt designs and make up kits for each of the blocks required to make the quilt. Customers pay $25 to join the club. This fee covers the cost of the pattern and associated fees. Each month thereafter the customer pays $24.95 for the materials required to make the quilt block. Each of the 25 designs generally has 100 people signed up for the program. You do the math. OK, I will do the math. Each quilt generates $24.95 for 12 months ($299.40) plus the initial $25 fee ($324.40 per customer). One hundred participants per quilt design works out to $32,440.00. Now multiply that by 25 designs. It is a nice chunk of change for a program that follows a neat and tidy formula. Debby has a department within the store devoted to this program. C'mon...you have to be impressed....I know that I am! Figure out a way to make a similar concept work for you!
Would you like to have an opportunity to learn more of Debby's tricks of the trade? Her success is no accident and she is willing to share her knowledge. Consider a private consultation! Although sales might be brisk over the holidays, many retailers will experience a serious slowdown come January....the New Year might be the perfect time to consider a tune up!
IN OTHER NEWS:
Better than expected? Worse than you imagined? Give us the details! You can be anonymous if you wish, but all who comment will be entered into a drawing for 50 meters of Swarovski Crystal Yarn!
The Royal Sisters. Michelle has a sweet little crochet tree tutorial that could be used in a plethora of festive ways: a holiday banner, a pillow applique, an ornament and more. Embellish with ribbons and beads for more sparkle. Michelle has a charming blog and offers an equally good star tutorial, so get out your crochet hook and in the words of my friends from down under, "have a play!"