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Tuesday, November 24, 2009

An Attitude of Gratitude helps to keep everything in perspective!

Happy Thanksgiving!




















I am taking a few days off to enjoy the holiday with those for whom I am always grateful...my husband, my kids, and each member of my wacky and wonderful extended family.

Enjoy your holiday! Have a profitable week and I will be back with a new post next Tuesday.

Monday, November 16, 2009

Delight your Customers and Energize your Sales!

The economy is said to be recovering. The jury is still out on that claim, but whether you are a believer or not, one thing is irrefutable: RETAIL HAS CHANGED AND THERE IS NO GOING BACK! The brick and mortar craft retailer is dealing with a new kind of shopper. Today's Crafty Shopper is much more sophisticated. She gets free "How To" training from online craft sites such as Craftzine, Craftster, and Ravelry. She is able to try new trends, often before you have even heard about them! Moreover, she might not feel the need for a neighborhood crafting community since she can form a circle of crafty friends through blogging and chat rooms. Yup, in the words of Bob Dylan, "the times they are a-changin.'"

The fact that you have a beautiful, well stocked store in a convenient location is no longer a guarantee of success. No location is more convenient to me than my living room couch and I can do plenty of shopping right there in my PJs!

What is the Crafty Retailer to do?

Engage, engage, engage! You will need to captivate your customers to keep their interest and win the sale. Here, in random order, are some proactive steps to take RIGHT NOW to attract new business, keep the old, and have some fun while you are at it:

1. Get active in your community. Join the Chamber of Commerce, Kiwanis, or other civic organization. They are great networking tools and you will feel good for doing good.

2. Empty out your stock room! Make sure that every bit of inventory is ready to sell. One of my favorite customers told me that she had 2 year old stock that has still not made it to the sales floor! It doesn't do you any good to keep stock in a box waiting to be entered into "the system." No excuses.

3. Time is money. Are you paying sales staff to stand around? Don't do it! Slow times should be used to further your agenda. Prepare a "script" and require your staff to get on the phone and call each and every customer in your data base! Talk about an upcoming event or the new class schedule. Tell the MIA customer that you miss her and offer her 10% off her next purchase. Make it a game. Have each employee keep track of the customers she called. The employee who has the highest number of customer store visits wins a cash prize or store credit. I can hear your groans from here. Promise yourself to make three phone calls every single day. Is it fun? NO. Is it effective? Absolutely!

4. Women notice the little details. Keep a well stocked "personal care" basket in your store rest room. The basket should include items such as lotion, aspirin, tampons, mints, etc.

5. Take a close look at your store signage, both interior and exterior. Is it friendly and easy to read? There is something off putting about signs which declare that "shop lifters will be prosecuted" and "restrooms are for customers only." I mean, really! The price for graciousness is small, but the rewards are huge. I remember the days when I shopped with three small children in tow. The shop owner who let my toddler use her restroom won my loyalty for life.

6. Keep a huge umbrella in the stock room and offer to walk customers to theirs car on rainy days.

7. Fun promotion: Offer a standard Rainy Day Discount. Customers get 15% off when it is raining. Put a storm cloud sign in the window when the sale is on in order to give drive by customers a reminder.

8. Send out email newsletters AT LEAST twice a month. Some folks will unsubscribe, but you will make up for it in new business....guaranteed!

9. Now that you have mastered Email, it is time to go after customer Twitter accounts. You can send out quick and easy reminders of store events this way. Tweet, tweet!

10. Ask every single customer if she sells her work. If she does, ask her to teach a class for you. If she doesn't, ask if she would be interested in attending a free class on marketing/selling craft work.

11. Light some candles...aromatherapy works.

12. Play music. A "too quiet" store is disconcerting.

13. Use "bag stuffers" to get the word out. The person manning the register should personally put a sales flyer into the shopping bag of every single customer, every single day. The flyer provides the staff member with the opportunity to talk about the event and serves as a visual reminder to the customer once she gets home.

14. Advertise in your church bulletin.

15. Consider buying shirts with your logo to use as prize giveaways.

16. Call your Realtor friends and ask to put a free gift or a coupon in their new home packages.

17. Be a good neighbor...contact the folks in your strip mall and ask to put coupons in their stores. Offer to reciprocate. The Wine Boutique can offer a Free Bead Class coupon with purchases over $50 and you can offer $10 off a bottle of wine for every purchase over $50.

18. Put a magnetic sign on your car touting your shop. You might as well be your own traveling billboard!

19. ...while we are on the subject of billboards...you are a walking billboard for your store! Make sure that you are well accessorized at work and beyond. The woman who complements your necklace in the elevator is a potential customer. Give her your card and offer her 10% off her first purchase! One of my favorite customers makes it a point to visit tony boutiques when she is dressed to the nines and wearing one of her handmade nuno scarves. The scarves are showpieces which always garner praise. Most store owners fall prey to her evil plan and ask about the scarf, making it easy for her to broach the possibility of a business relationship. She is slowly but steadily adding new wholesale accounts to her business.

20. Take some of your dead inventory, gather up customer volunteers to assist you, and teach a class at the local senior center. You will get rid of inventory that hasn't moved and your customers will feel good about themselves and about you. Win-win.

21. You can do the same thing at the local Children's home. When it comes to charity attention, the babies always get the focus, while the less adorable teens get the shaft. Make it your business to teach a teen to knit or crochet, if only for an afternoon. You know the comfort that crafting has provided you...give that gift to someone who can really use it!

22. Collect unwanted craft supplies to donate to the senior center or the Children's Home. Let the press know what you are doing so that you can collect on a larger scale and make a bigger impact. The fact that you get nice publicity is an added plus.

23. Join an adopt-a-highway program.

24. Host a blood drive at your store.

25. Donate slow moving product to the local high school Home Ec department and offer to teach a class. Hand out coupons for the kids to bring home!

26. Write handwritten notes to customers to thank them for their business, congratulate them on a promotion, etc. Don't just file this away under "something you know you should do"....DO IT!

27. Consider honoring the dreaded Michael's/JoAnn's 40% off coupon. It is only good for one regular priced item so it shouldn't be too traumatizing. No need to reinvent the wheel....it is working for the big boys, it might work for you!

28. Consider putting one category on sale every day (or every week), and only advertise it via Twitter. Your customers will give up their Twitter names more readily when they understand what is in it for them! 10% off all red yarn on Day 1, with 15% off all patterns on Day 2, etc. makes your place the destination of choice for crafter's in the mood for some retail therapy.

29. Keep fresh flowers by the register.

30. Food is ALWAYS a plus. Make every Wednesday cupcake day.

31. Make your displays interesting. You are in the fantasy business...you cannot afford boring and humdrum. Clean and tidy is not good enough. One shop who has set the bar very high is Suzie Q Beads of Calgary. Her displays are memorable and her color choices make for a vibrant and creative environment. Who wouldn't want to play here?


32. Be innovative. If you are not innovative, find the trendsetters and follow them closely. You know who the leaders in your genre are...and if you don't, spend a few hours researching online and you will figure it out fast. Look at their websites and see what products they are carrying and what sort of classes they are offering. Where do you measure up?

33. Spend a few hours surfing the internet every week. You need to keep on top of the trends because your customers have access to the same internet search engines. They know what is going on "out there" so it is critical that you be even better informed. I have found that a simple google blog search using craft terms quickly brings me to the sites I need to know about! Similarly, a google image search is a powerful tool to "see" what is out there.

34. Schedule some holiday Make and Take Classes. Search the web for some easy crafts that will use existing inventory where possible. Jamie Chan of Urban Fauna Studio has a gift tag idea that is too cute not to pass along. I had some fun in the studio this week-end working on the easy felted soaps pictured below. Each bar used only a bar of soap, 10 grams of fiber and a few beads. The felt covering acts as a washcloth and the flower embellishments can be snipped off and recycled into a pin. Click here for the directions.
Consider a cute crochet Holiday Wreath Pin. Its diminutive size makes it a quick and easy project that can be embellished with beads.

35. Take some chances, but limit your risk. Sounds like an oxymoron, doesn't it? Take a chance by pushing your personal boundaries. For example, pick up the phone and make that customer phone call. Limit your risk by protecting your financial exposure. For example, do not use your personal credit cards to purchase inventory. I can hear you laughing. Everyone uses their personal cards to purchase inventory. Nope. Not everyone. Small business owners do and it is risky. It will keep you up at night. Get rid of your dead inventory and pay off that credit card. Start limiting your exposure...you will sleep better.

36. Form an alliance with other business owners. It gets tiresome fighting the world all by yourself! Network with others who are similarly situated and the journey will be easier. It is great to be able to ask another retailer how many turns she gets on a particular product category or how she handled having to lay off a loyal employee. Many Bead Shop owners have enjoyed the camaraderie of the Local Bead Store Alliance. Ravelry has a group specifically for small business owners.

37. Take some time to recharge your batteries. Worry is exhausting and try as you might, you simply cannot control the economy. Play in your studio, play with your kids, play with the dog, and don't forget to play with your significant other. Rekindle your passion for your craft AND for your customers...the business success will follow!

Monday, November 9, 2009

Holiday Shoppers are feeling more "Bah Humbug" than frivolous.

The National Retail Federation just published its "Top 10 Holiday Trends" report and the news was daunting. You will need focus and imagination to get your share of the shrinking holiday dollar this season. The list, in a nutshell, is as follows:

1. The Recession is real. American's believe that the recession has NOT ended, looking to unemployment figures, rather than stock market activity, to gauge the pulse of the economy;

2. James Carvel was right... it is all about the economy! Gift giving will reflect the state of the economy, as more folks give homemade gifts, buy "joint" presents, and focus on necessities. 70% of those surveyed said they will be shopping at discount stores, while 11% said they would shop at thrift stores;

3. Sales and Promotions will rule the day. Consumers are waiting for big markdowns, and retailers are keeping inventory lean. Customers who wait until the last minute in the hopes of crazy discounts might be sorry;

4. Consumers will be reluctant to use credit cards. This provides an opportunity for retailers who offer layaway.

5. It is the thought that counts. People will be spending 17% less on friends, and 15% on co-workers this year;

6. We are all going to be eating more! Food related holiday spending is predicted to rise $10 per person, as we give gifts of food, or invite guests over for holiday fun.

7. People want to RECEIVE gift cards. This makes sense...in an era of extreme financial restraint, gift cards are like found money....more practical than another package of bath salts.

8. The internet will impact holiday purchases. One in three holiday sales will be impacted by the internet. Moreover, Savvy online retailers will use social media to connect with their customers. In fact, about 60% of the retailers surveyed said that they have improved their Facebook and Twitter pages in an effort to reach consumers.

9. Department Stores are where it is at for the 18-24 year old market; and

10. Impulse buying will be nothing more than a gleam in the shopper's eye. Budget constraints will rule the day.

Sigh. Retail ain't for sissies. The facts are simple:

Bad economy + Holidays =
Reduced Holiday Spending.

What is The Crafty Retailer to do?

Put on your blinders, shut out the naysayers, and BE IN IT TO WIN IT!

OK...so people will be spending less this year. I bet you knew that before you read this blog post. Nonetheless, people will be spending SOMETHING. Your challenge, should you choose to accept it, is to ensure that the money that is spent...however paltry the amount....is spent IN YOUR STORE!

*Show your customers that shopping with you will enable them to stick to their budget. Offer store samples that reflect $10, $20, $30 price tags. Promote these Recession Busters in your newsletters and Bag Stuffers.

*Schedule classes that are in sync with the times. Consider a "How to Etsy," class that teaches your customers how to earn money with their love of crafting. Eva Arias of The Bead Boutique in Brandon, Florida has had great success with her Etsy class. The teacher is a customer who happened to mention that she sold on Etsy. Eva snagged her for the class and it has proven to be a store staple. "Recycle, Reclaim, Reuse" classes have gained in popularity as consumers have become more thrifty and more environmentally aware. Creative folks are using thrift store finds as a basis to "re-purpose" an object to give it a second life. An old sweater becomes a handbag, a pair of jeans becomes a pillow. A quick Google search of “reuse and recycle thrift store finds” turns up 445,000 hits! Ellen Luckett Baker of The Long Thread has a great tutorial for the holiday trees pictured at left, using old sweaters. Imagine a tree embellished with beads purchased from your store, or some crocheted embellishment from yarn on your shelves.

The Green movement is a trend that is here to stay, so you might as well embrace it. While you will not make as much money on a sale that is centered upon up-cycling an old garment, you will be able to sell the ancillary beads, yarn, etc. needed to turn the thrift store find into a masterpiece. Moreover, your willingness to provide a place to gather and craft will make you a hub of the crafty community. People will hang out and before you know it, you will have created a following that will be around when the economy recovers. Need more inspiration? Check out the latest issue of Altered Couture for creative eye candy.

Folks facing a crisis feel more in control when they are able to take action. It is your job to help your customer find the connection between the turbulent economy and the solace that crafting can provide.










Crafting is truly uncomplicated joy...spread the word!

MORE CRAFTY BUSINESS:
Your shop newsletter plays a critical role in your economic success. Use the newsletter as you would a letter to a friend. It should be warm, educational and playful. Give your customers a reason to read it, beyond the obvious desire to sell them something! Include a link to an interesting site, a free tutorial, or even a recipe. Here is one to get you started:

World's Greatest Banana Bread
2 cups of flour 1 teaspoon Baking Soda
1 1/2 cups sugar 1 teaspoon salt
1 1/2 cups shortening (Crisco) 3 over ripe bananas (the kind you would throw away!)
2 eggs Topping (1/3 cup sugar plus 3 teaspoons of cinnamon)
5 tablespoons milk
Preheat oven to 350 degrees. Grease two loaf pans.
Combine flour and sugar, then add all other ingredients except topping items and mix together. Pour batter into the pans and smooth tops. Bake for 10 minutes.

Sprinkle cinnamon sugar mixture over top of bread. Bake for 35 more minutes or until a toothpick inserted into the center comes out clean.

YUM!

Monday, November 2, 2009

Don't fall into a Retail DEATH SPIRAL! 3 common mistakes to avoid.

Every retailer makes mistakes, and usually those mistakes are easily fixed. A bad hire can be resolved by a quick fire. A highly charged exchange with your business partner can be mitigated by a sincere apology. However, there are other mistakes that can prove to be much more damaging to the vitality of your business.

What is The Crafty Retailer to do?


Avoid those mistakes, of course!

PITFALL #1: Failure to control expenses.
Most business owners have a working understanding of their fixed expenses, but are less tuned in to the insidious expenses that eat away at the bottom line. Every time that you cut $10 in expenses, it is tantamount to ringing up a $100 sale.

There are a number of changes that you can make right now to save money without sacrificing the customer experience. Consider the following:

1. Purchase generic shopping bags rather than custom imprinted ones. Use a colorful bag and attach a business card without sacrificing style. In fact, choose something that is eco-friendly and save the environment as well. Let your customers know the thought behind the change...they will appreciate your thrift AND your environmental awareness.

2. Negotiate better rates with your Merch
ant Services provider. You probably get an annual letter filled with legalize to apprise you of a rate increase. Don't accept the increase as inevitable---Get some quotes from several credit card companies. Your bank might beat your best quote in an effort to keep your business. A quarter of a percent doesn't sound like much of an increase, but when you extrapolate it out, you might be surprised. For example, you will pay an extra $250 when you process $10,000 in sales. Forget that!

3. Some vendors use "Shipping" as a revenue source. If your shipping costs appear high, ask your vendors for a discount. Are you using Fed Ex? Ask UPS for a quote, and vice versa.

4. Shave an
hour off of your sales day. My local Home Depot is shutting the doors an hour earlier each day. I am sure that will change if business picks up, but right now it is saving them a bundle. It might work equally well for you.

5. Eliminate employee over-time.

6. Time is money. Order office supplies online. We used to have weekly, and sometimes daily, trips to Office Depot to get paper, ink cartridges, etc. until we tired of paying staff to make the run. It is an inefficient return on the dollars spent. Many big box office supply stores offer free delivery for orders over $50. While we are on the subject of office supplies, switch to cheaper copy paper. No one will complain about the brightness of the paper used to print a newsletter!

7. Target your adverti
sing so that you are not wasting dollars. I recently read about a gift store owner who analyzed her customer data and learned that 40% of her "bottom feeders" came from one zip code! A bottom feeder is a customer who only comes around when you are having huge markdown clearance events. What a great bit of information! Now she has no need to pay for routine advertising in that market; rather, an e-mail newsletter announcing the big sale should suffice.

PITFALL #2: Failure to manage gross margin.
This is particularly dangerous in a sour economy. After all, you can lose money despite record sales numbers if your margin is too low. "50% Off" sale signs are everywhere. I hear retailer after retailer complain that customers won't even consider a full price purchase. OUCH. That sort of discounting might improve short term cash flow, but it will quickly lead to your demise. Moreover, it cheapens the value of your product and gives the impression that you were overcharging the customer in the first place. Do yourself a favor and reserve the deep discounts for those items that have outlasted their prime sell date. Frankly, while Consumers may have come to expect crazy discounts, they are going to pay a high price for that gratification. The bitter reality is that the favorite local craft shop, with the cozy chairs and helpful staff, could soon go the way of the dinosaur if the only sales made are low margin sales. Ohio yarn shop owner Jackie Goff put it brilliantly in a newsletter to her customers.

Jackie, the owner of Uptown Fibers in Sylvania, Ohio, had seen several competitors close their doors. When her own customers started to question whether she would be followin
g suit, she told them that it was up to them. She then gave them the following short and sweet economics lesson:

It’s happening all over the country. Every day our hearts break as we see another “OUT OF BUSINESS” sign on the door of our favorite businesses. A great restaurant, delightful bread store, or especially our favorite yarn shop; here one day and gone the next. The fiber community is still reeling from the closing of Vintage Yarns and Fiberworks, and the question asked of me every day is, “So, how is your business. . .really? You won’t be closing too will you?”

To honestly answer your questions, I am not PLANNING on going out of business, but it all depends on sales. Plain and simple. And, quite honestly, sales are significantly below what was expected and what is needed for long-term survival of the shop as it exists today. The last thing I want to do is break your heart. . . and mine, and I’ll do anything to try to keep that from happening. Which is why I have information to share with you.

Last week, one of my yarn distributors told me that 3 out of every 5 shops in his territory have closed since September ‘08, and that probably one out of every remaining two will not survive this summer. His territory is Michigan, Ohio, Illinois, Wisconsin and, I think, Minnesota. It includes Chicago, Detroit, Cincinnati and other cities bigger than Toledo. He reports this trend happening across the US.

Why Shops Don’t Survive
1. Customers stop buying. No explanation needed.
2. Profit margins fall below what is needed to re-stock. Example: a skein of yarn is sold at $10. The first $5.00 is needed to pay rent, taxes, salaries, utilities and the remaining $5.00 is left to re-buy another skein of the same yarn to restock. If the yarn goes on sale, the first $5.00 still has to pay rent/salaries/taxes, and now there is not enough money left to re-buy yarn because it still costs $5.00. Suddenly there is less to sell, customers get bored or already have it, and stop
buying. (not all “sales” create this condition, but most do, unless the item was greatly discounted to the LYS at the time the shop purchased it)

The above is a very simplistic explanation, and there are things a small shop owner can do to increase the profit margins somewhat, but the two items listed here are the major components to success or failure for retailers.

Jackie then went on to ask each of her customers to spend $40 a month with her. She was referencing the 3/50 Project, the brainchild of retail consultant Cynda Baxter of Retail Speaks, which encourages consumers to spend $50 per month with the three independent retailers that they would be miss the most if the stores disappeared. Jackie spent some time running the numbers and decided that she didn't need $50 per customer since $40 could keep the lights on. I was a little bit surprised by the frankness of Jackie's entreaty. Most sales people are conditioned to avoid anything that could be a downer so I found her forthrightness quite refreshing. Fortunately, her customers agreed. Most had little insight into the retail experience so Jackie's newsletter was a real eye opener for them. She reports that many customers come in the shop telling her that they are "here to spend their $40." Read Jackie's entire newsletter.

PITFALL #3: Too much inventory. There are two sides to the excess inventory pitfall. First, there are those who have too much inventory because they like to shop more than they like to sell. They buy what they like and what customers request. This owner special orders ten gross of crystal beads (in a color she knows is slow moving) because a customer needs 12 to finish a product. The owner would be better served by checking her ego at the door and procuring them from a competitor, reselling them to the customer at a loss. The loss would be less than $1 and result in a happy customer and a happy you, as opposed to the happy customer and unhappy you. You are unhappy because your spent $75 on iffy stock and now can't afford to buy the same bead in Swarovski's latest color, Cyclamen Opal. Bummer. The second inventory pitfall is when there is a plethora of inventory in a few store categories, and a dearth of inventory in others. The empty shelves indicate the most highly sought after items...you know...the items that you cannot afford to replace because you have so much money in the slow moving stock. Bummer.

Inventory is the engine that keeps your business running, but you must have suffi
cient inventory turns to justify the expense of the product. The delicate balance is hard to achieve in good times. It is even more difficult--but critical to your survival-- in a poor economy.

Work hard, work s
mart and you will survive this economy. You can do it!


Other News
:

We have a new candy template for the month of
Nove
mber. The "Save a Turkey, Eat More Chocolate" template fits the mini Hershey candy bars and is something nice to pop into a shopping bag as a surprise treat for your customers. Remember...it is all about creating the customer experience. Send me an email if you would like a copy.