Is your retail business Struggling- A small appliance's perspective
It was a long weekend, I was planning to call my day off a bit early and head to my home town.
Out of nowhere, my phone rings. It was one of our business franchisees while I was working in a reputed Small appliances brand. He had been with us in the business for about a year, but he has never been contempt with the business profits as the growing expenses were always chocking him at the end of the month.
I know where this call would be heading, but a genuine sales person never cuts off his business ally. So, I answered the call and mentioned him that I was heading to my home town and don't have luxury of time for now. But I know my request to have a discussion tomorrow was not even acknowledged by him and he asked me
"Sir, you know, my profits are barely meeting the expenses and at end of the day, I am almost left with nothing. what should I do?"
These questions are perennial for any retailer who has established their business post real estate crash, around 2009, where the rentals have shoot up beyond the clouds especially in Tier 1 cities.
I advised him,
"You know the basics of retail, you have been in the system for the past 12 months. If I just have to give the bullet points that you need to do then this is my advice".
Naturally this will act as a quick guide to all those who are seeking a quick advice on what to do for revamping a small retail business.
Before I get into the action items, I will layout an important factor about retail business. The success of a retail store is primarily on three factors
First factor- The location is a forecasted and a predicted gamble. You need
to always lookout for a location that is upcoming/ developing/ growing instead
of a saturated posh area, because, this proposition always works better for profitability
factor.
The guiding lines are same for both
Before starting the activity do a small exercise of taking a pen and paper and write down the list of areas where your potential customers are living (typically 3km radius from your store in case of city and an entire town in case of tier 3 and above).
Do the below activities in a focused manner that is one area at a time and study the output as to how customers are responding.
With the above inputs, you take the responsibility of improving your staff’s product knowledge. The staff should always convey the feature of the product that they are selling and how it will help a customer in their day to day usage.
End of the day, if your staff are not spending enough time in communicating with your customer and facilitate them on the purchase decision, what is the use of having a sales persons, instead the customer can come in and select the product at display like a super market and walk away.
The last but not the least, “What is seen is what is sold”, so put up your merchandise in open display and not cover them in carton boxes on racks. If a customer is not even allowed for a visual taste of the product with a touch and feel, how do you expect him/her to buy?
As I was about to add another list of advice, my franchisee stopped me and said, this was good enough to improve the walk-ins and I accepted that fact saying that implementing is tougher than comprehending ideas.
Out of nowhere, my phone rings. It was one of our business franchisees while I was working in a reputed Small appliances brand. He had been with us in the business for about a year, but he has never been contempt with the business profits as the growing expenses were always chocking him at the end of the month.
I know where this call would be heading, but a genuine sales person never cuts off his business ally. So, I answered the call and mentioned him that I was heading to my home town and don't have luxury of time for now. But I know my request to have a discussion tomorrow was not even acknowledged by him and he asked me
"Sir, you know, my profits are barely meeting the expenses and at end of the day, I am almost left with nothing. what should I do?"
These questions are perennial for any retailer who has established their business post real estate crash, around 2009, where the rentals have shoot up beyond the clouds especially in Tier 1 cities.
I advised him,
"You know the basics of retail, you have been in the system for the past 12 months. If I just have to give the bullet points that you need to do then this is my advice".
Naturally this will act as a quick guide to all those who are seeking a quick advice on what to do for revamping a small retail business.
Before I get into the action items, I will layout an important factor about retail business. The success of a retail store is primarily on three factors
1.
The location (a good location sells products by itself)
2.
The people (your staff who are taking care of business
including you)
3.
The merchandise/ service (quality merchandise with
value for customers)
The guiding lines are same for both
·
small appliances business selling mixer grinders, gas
stoves, wet grinders etc.,
·
large appliances business selling like Refrigerators, TVs, washing machines
etc.,
Since new customers (walk-ins) are not coming into your store, you need to
reach out to customer where they are. Before starting the activity do a small exercise of taking a pen and paper and write down the list of areas where your potential customers are living (typically 3km radius from your store in case of city and an entire town in case of tier 3 and above).
Do the below activities in a focused manner that is one area at a time and study the output as to how customers are responding.
| Medium/ method | Type of Activity |
Remark |
| Print |
Pamphlets distribution |
Print 10K to 15K pamphlets and distribute them honestly using designated
persons or through a newspaper insert |
| Ads in Local weekly newspaper |
Uptown editions and local weekly magazines are cheap but has a great
potential, so don’t overlook this mode |
|
| Kiosks |
Display and pamphlet distribution |
Use a 2*3 ft kiosk and a temporary staff to display pamphlets communicating
about offer and new arrivals |
| Demonstrations |
Live demonstrations |
You cannot sell a product just by creating stories in air, the customer
has to experience it. Invite 10 to 15 customer based on your retail area and
do a live demo from authorised brand staff |
| Out-store Activities |
Apartment activity |
Take your merchandise and display the products in an apartment with
potential number of flats for display cum sale activity |
| Choultry activity |
Just like above, rent a choultry in a near by area, put up your
merchandise for a display cum sale activity |
|
| Factory based activity |
Like above two cases, promote your products in a factory premises of an established
brand with additional 5 to 10% discount over your current selling price at
store by putting up a stall. |
|
| Collaborative selling |
Local tie ups |
Tie up with local near by shops like department stores, Spas etc for
promoting your store Ex; Placing pamphlets in their billing counters, cross leveraging your customer bases, Free offers from your store if they avail/purchase one particular product in the neighbourhood shop. Of course, you need to spare some money for getting this done |
| Engagement activity |
In store and out store engagement activity |
Free Mehandi for lady customers, Free cookery class in a organised
environment, Rangoli competition in a selected area, drawing competition for
kids in selected area’s community hall etc., |
| Finance support |
Bajaj EMIs, personal EMI |
This is an effective method because you are preponing the purchase
decision of a customer from tomorrow to now. In case of personal loan
facility be sure and strong in your collection methodology |
| Online sales |
Listed sellers |
List yourself in online channels like Amazon, Snapdeal etc for catering to
your online buyers as well |
With the above inputs, you take the responsibility of improving your staff’s product knowledge. The staff should always convey the feature of the product that they are selling and how it will help a customer in their day to day usage.
End of the day, if your staff are not spending enough time in communicating with your customer and facilitate them on the purchase decision, what is the use of having a sales persons, instead the customer can come in and select the product at display like a super market and walk away.
The last but not the least, “What is seen is what is sold”, so put up your merchandise in open display and not cover them in carton boxes on racks. If a customer is not even allowed for a visual taste of the product with a touch and feel, how do you expect him/her to buy?
As I was about to add another list of advice, my franchisee stopped me and said, this was good enough to improve the walk-ins and I accepted that fact saying that implementing is tougher than comprehending ideas.
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