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Patricia M. Johnson & Richard F. Outcalt
Retail Strategists and Retail Turnaround Experts
Co-Founders, The Retail Owners Institute® • Business Strata:G®
Except for the lingering sugar high, Halloween is well behind us. Retailers know what that means: on to the Holiday Season!
Of course, for most retailers that brings a major focus on sales. But, savvy retailers are especially focused on the targeted ending inventory on December 31.
Those retailers are carefully watching sales reports, and are poised for action.
Each week, they identify "What's not selling yet?" And they do something about it! Move it around on the floor? Display it differently? Pair it with merchandise that IS selling? Lots of choices!
What About Markdowns?
What are we waiting for? The customers are here now. Do we really want to wait for January clearance sales?
Or, maybe there are entire lines you plan to discontinue in 2025.
Why not clear out that merchandise while the customers are coming in at Holiday?
For those who are focused on managing and controlling their inventory (since it is their largest asset), here is a tactic you might want to use.
First, identify the merchandise items you want to be out of by year's end. (See above.) Mark it down now by, say, 20%. Make that merchandise noticeable.
Then, let your staff know that you are putting a spiff, perhaps $5 or $10 (depending on price points in your stores) on each of those items sold.
Give them ideas on how these items can be add-on sales.
Then, every time one of those items is sold, the spiff money goes into a pool.
A chart in the break room will keep track of each day's total. At Christmas, that pooled money will be shared among all employees, based on their hours worked.
This can be a great technique to add some fun for your staff – and some teamwork – to help move out that merchandise you really don't want around come the New Year.
And depending on how many items you have targeted, the total cost of the spiff money is likely less than a steeper markdown would have been.
Plus, this way, that money goes to your employees! Sweet!
Time to start identifying those merchandise items that will be on the spiff list. Let their Farewell Tours begin!
Free Access - Webinar Of The Week
“Watch as we analyze the Shaky Company performance in a matter of minutes by calculating some key ratios. Then, once we compare Shaky’s current status to the Benchmarks for his retail vertical, the next steps almost write themselves.”
Many retail owners have faced this situation at one time or another: a fellow retailer (perhaps in your community, or someone you know through a trade association or buying group) asks for your advice.
Or - gulp! - asks for a loan!
How would you respond? How should you respond?!
Or, consider this: Would you loan $50,000 to your own business? Should you?!
This TOPICAL TUESDAYS Webinar of the Week, led by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute®, will show you an approach to take whenever you face those kinds of requests.
The good news: There IS a way you can help without ruining the friendship – or your bank account.
Watch as we analyze the Shaky Company performance in a matter of minutes by calculating some key ratios. Then, once we compare Shaky’s current status to the Benchmarks for his retail vertical, the next steps almost write themselves.
👀 This lively and in-depth webinar is essentially a (free!) master class in retail financial turnarounds.
See for yourself how empowering it is to understand the cause-effect levers of retailing.
See monthly sales trends versus last year for your retail sector. How do yours compare?
Ever feel like financial planning for your retail business is one big guessing game?
The Retail Owners Institute® is here to change that.
With our suite of projecting calculators specifically for retailers, you can stop guessing and start seeing the financial impact of your decisions, instantly.
Imagine testing out different “What if…?” scenarios, like adjusting prices or shifting inventory, with just a few clicks. No complex spreadsheets, no guesswork—just clarity.
And with Member Access privileges, you’ll have unlimited access to all of it, anytime you need. Find out more here
Start today and make each decision with confidence.
RetailOwner.com
Avoid mistakes • Seize opportunities • Look ahead now
"Christmas will be here before you know it."
Well, actually, Christmas will be here the same time it always is: December 25.
However, what does change are the cues for the shoppers.
That is, Thanksgiving falls as late as it can this year, on November 28. That means, for those keeping score at home and for the breathless business pundits, there are only 26 shopping days between Thanksgiving and Christmas. This is six days shorter than a year ago, and the shortest since 2019.
That's why some retailers, especially those that are publicly traded, are making mighty efforts to lengthen the shopping season.
But, is there actual value in trying to prompt shoppers to start their Christmas shopping before they have even handed out Halloween candy? Yes, but...
Two thoughts:
Given how much preliminary "shopping" (that is, browsing, gathering/searching for ideas) is now done online, rather than in stores, the impact of having Thanksgiving occur very late in November may not carry the same significance as it once did. People can go online anytime (and you don’t have to schedule additional staff so soon!)
And, remember this: every year there is a slump, a slowdown, between the Monday after Thanksgiving and December 10. Only then, with just two weeks left, the shopper attention and intensity picks up.
Be certain that you have the best, most appropriate web presence your operation deserves. It should do justice to your story, your merchandise, your customers. Do it, asap.
Offer as many conveniences and time savers for your customers as they prefer (younger shoppers may have different preferences than others.) You don't need an app to offer click and collect, or buy online, pickup in store.
Be strategic about your scheduling. There will be busy days/times in your stores. Anticipate when those are most likely, and be sure to have your best sales people available then.
There is a lot of uncertainty in the economy right now, from upcoming elections, political turmoil, international conflicts, natural disasters, etcetera. More so than most years, shoppers are very likely to wait until the last moment to decide how much they will spend on Christmas this year.
That is, even if Thanksgiving had fallen on the earliest possible date, the shoppers this year - especially the price-conscious shoppers - won't show their hands until after December 10.
The takeaway for retailers: Stay calm.
Between now and the late Thanksgiving, because the Big Guys will be establishing the Holiday aura, be competitive and reassuring. Those early shoppers are wanting to be prepared.
Be ready for the Black Friday hoopla.
Then stay strong through those "slump days" until December 10. Indeed, relish that the slump is actually less time to endure this year!
And remember: there always is something to celebrate!
As Halloween arrives, here's a really spooky thought: Will you have enough cash to get you through the next 3 or 4 months?
How to answer that? With a quick cash flow calculation. No retailer should ever be without it!
A Cash Flow plan has just 3 parts:
Cash coming in
Cash going out
The difference
Here's how to know in a matter of minutes – free of charge! – whether or not you will have enough cash to get you through the Holiday season.
Go to our online "Cash Flow Gadget." It's available to everyone 24/7 at The ROI.
Just use your best guesstimates (for your eyes only) to fill it in for the next four months. It's like shining a light on that monster in the closet!
One of two things will then happen.
You'll discover that you will be "cash flow positive"! Sweet! You can sleep at night!
Or - gulp! - you will see that you will have a cash shortfall. But, better to know in advance, isn't it?!
In either event, you still have time to make some adjustments.
Ahh, Perspective!
This quick exercise can be particularly useful over the November to February time frame. The drop-off in sales volume from December to January is nothing new for many retailers. The value is the perspective you can gain from seeing the likely numbers in advance, giving you time to develop your game plan for dealing with it.
Whenever you are haunted by cash flow questions, depend on The ROI. Nowhere else can retailers so easily look ahead, and "Turn on your financial headlights!"
All too often, given the seasonality of retail businesses, there simply is not enough cash to fund the business, and take care of your personal obligations.
The Owner must choose:
Do I take money out for my household and family? (To remodel the kitchen, or pay for college, or....)
Or, do I reinvest that money into the business? (Upgrade computer systems, remodel the store, or....)
And most important, when could I do any of those things?
Pat Johnson and Dick Outcalt, the Co-Founders of The Retail Owners Institute®, have identified all these pressures that bear down on owners. This is what is known as an Owner-Only Issue.
Even better, they have captured it in a revealing explanation - and even a picture - of the interdependent financial connections confronting Owners.
Quite the balancing act that owners must maintain. Knowing how all the pieces interact and fit together makes a huge difference.
All owners and aspiring owners should be sure to take advantage of this invaluable perspective.
Knowledge IS Power!
The Retail Owners Institute® has been empowering retailers since 1999 to "Turn on their financial headlights!" Our tools and resources are trusted by thousands of store owners to help grow profitable, resilient businesses.