When it comes to cash flow, there are a lot of business owners that put their head in the sand. But cash flow is the lifeblood of your business, so day, we’re going to make you pull up your big girl business pants, and confront the numbers, head on. I recently asked a bunch of retailers what their biggest fear about confronting cash flow head on was. And the answers are probably going to sound familiar to you. They’re scared of looking at their bank balance, they’re scared there wont be enough. They hate juggling, and that sinking feeling that comes into your stomach, when you receive the latest round of invoices. Now cash flow is a BIG topic, but today, I want to just tackle the 3 biggest problems that I see retailers make, when it comes to managing cash flow.
So many retailers just don’t track what they sell. Your point of sale system has all the answers. You don’t have to guess. It should all be there, waiting for you to download, and spend some time revising. What I tend to find, is that in the rush to get a point of sale system up and running, one of the key factors that get’s over looked, is categorising stock. If you’re a fashion store, you may sort by item type, like dresses, shirts and pants. If you sell children’s toys, maybe it’s by age group, or item type, such as wooden toys. If you sell homewares, you might categorise use candles, wall hangings and cushions, just to name a few. When you create categories, you can see, at a glance, how each type of product does in your store. You can look at the overall profit for the category, the margin, and how much of a percentage of total revenue, the item accounts for. Later, you can drill down into specific items, but categorising your store into sections, easily allows you to report on which areas are contributing the most to your business. And when it comes to tracking, you also need to set aside time, once a month, or once a quarter, to go over your numbers, your stock, your turnover and your margins.
Do you sit down and look over the past month and previous years’ sales, for a particular product. Or, do you just guess. Sometimes, guessing works, when you know your business inside out, but what happens when you grow to the point of being able to hire a manager. Not being in your store every day will dull your senses. If you don’t have a plan in place, and that plan is using the data you already have, then you’re bound to start getting your stock levels wrong, leaving you too short, and missing out on sales, or having too much, which leaves your cash flow tied up in inventory
If you’re tracking and forecasting, you’ll have a good sense of how your inventory is travelling. If you aren’t, you may look up one day, and find that item on the shelf, has actually been there for 6 months. Knowing how and when to get rid of stock is an important part of the business process. Weigh up how much an item is costing you, when it’s not selling. It’s taking up valuable real estate, and what could you have bought with that money instead? In the show notes, I’ll link to another one of my most popular downloads, on how to move old stock. But knowing when to move it, is just as important as knowing how to move it, and still get a return. If you’ve found this information useful, come join the Bringing Business To Retail community. You’ll be joining a bunch of retailers from all around the world chatting all things business. Best of all, it’s free.
Should you sell stock before it arrives in your store? What are the pros and cons? Pre selling stock before it comes into your store can generate significant cash flow for you. Just look at any Apple product. People line up, sometimes for days, in order to purchase their products, and quite often, they don’t even get to walk away with a physical product . Sometimes it’s months, before they receive the goods they’re pre-purchasing. Apart from having an amazing brand, Apple creates demand by releasing snippets of information in the lead up to the event. They don’t just go hey, here’s a new product, you can have it in 3 months. They create hype and demand. They trade on FOMO, the fear of missing out. Apple use this as a status indicator. Another benefit of preselling, is that it creates scarcity. Similar to FOMO, creating scarcity increases a product’s desirability, and prompts customers buy, even if the product hasn’t arrived. Preselling an item can also validate the viability of a product. If lots of people are talking about it, and buying that product, it gives the product credibility. We call that social proof. Speaking of validation, when you presell a product, you are able to forcast a level of demand. True, the urgency to buy a product will start to dwindle once the product is actually in your store, but using pre-selling as a validation technique, will help you to work out, just how much stock you should be bringing in. Are you on trend? Are you stocking exactly what your customer wants? Pre-selling shows your customer that you’re paying attention to what they want, that’ you’re up to date with the latest styles, trends and products. But arguably, the biggest benefit for preselling, is that it brings revenue into your store. Being able to use that money to pay for the stock, to have guaranteed sales, is a massive benefit and sanity saver. So let’s recap on the strategies you should focus on, when it comes to preselling.
Often, people have already made a decision, even if it’s subconsciously, about whether or not they are going to buy a product. When you’ve created a buzz, when you have that social proof, you increase your odds of a successful product pre-sale. If you’ve found this information useful, come join the Bringing Business To Retail community. You’ll be joining a bunch of retailers from all around the world chatting all things business. Best of all, it’s free.
When you first put together a website, there is so much going on, you often through in everything you need, load up your products, test your cart, and move on to the next thing that needs to be done. Like everything in life, a good spring clean is in order, to keep your site fresh and up to date A spring clean of your website is an essential, to keep your customers happy, to keep your business trading within the law, and to make sure you don’t get caught out in expensive mistakes. Outdated policies and processes and poor user experience are a sure way to end up costing you money and sales, so here are 7 spring clean must-do reviews for your website
When Google announced that it was going to rate websites that were mobile friendly in 2015, it was a sure way to know that the state of ecommerce as we knew it, was changing. Your website should already be mobile responsive. If it’s not, that the first thing you need to organise. More importantly, is your website actually mobile friendly? Is it easy to shop on your website? Are the menus easy to read and find? Does the layout flow in category and product pages? Have you gone through your shopping cart on a mobile device? How easy is it to navigate through the checkout process, on a mobile device? You should be looking to minimise the steps the customer has to take, the clicks they have to make, and the number of keystrokes they have to enter. Every extra click they have to make, moves them closer to abandoning their cart
You should be reviewing your website traffic at least monthly. Your google analytics account will tell you which pages customers are spending more time on, your bounce rate, which is where someone leaves almost as soon as they hit your homepage and where on your website, their dropping out. For example, are they leaving during the shopping cart process? Google Analytics will also tell you which pages are people visiting most. You’ll probably find that your shipping, FAQ and About pages, rank very highly.
It’s time to spring clean all those pages you set and forget. Laws change, your returns policy may change, your courier company and their rates may have changed. Now’s the time to go back, read over them and make the changes that you need to.
If you’re new to Bringing Business To Retail tv, let me tell you know, that you have to be giving your customer something, in return for their email address. And, it shouldn’t be 10% off. If you’re already offering a pain point giveaway, or as we call it in the biz industry, a lead magnet, it’s time to review what you have on offer, and change it up a little. Get some new subscribers onto your customer database with a new lead magnet.
The images on your website, are paramount to getting sales. Make sure that the images are all the same size, that the pages flow well, and go back and test out the experience from a users point of view. When it comes to images, the themeing should also be consistent, for example, make sure the deep etched image is on the category page, and lifestyle images, close ups and flat lays are within the product page. The more relevant images you have for a product, the less guess work a customer has to do, which makes it easier for them to add to cart.
Which brings us to the number 6 website review must do. Linking products that sell well together. Whether you use flat lays, widgets such as people who bought this, also purchased, or, preferably, you write and link it in the description, in case you haven’t realised, the key to increasing your customer order value, is to make it easy for them to buy. By linking products together, your customer is more likely to top up their shopping basket.
Take a look with fresh eye, on how your menus and navigation flow. Your navigation should be based on how a user will look for an item, not on how you necessarily categorise it in your store. Are your menus grouped sequentially and are your sub categories in alphabetical order?
Is there an easy way for a customer to go back a level, or return to your home page.
Think of a random product, and ask a friend to find it on your website (without using the search button). This will give you an insight to how navigable your website actually is, to a new customer. If you you want a completely unbiased opinion, use a user testing service, like Peek, to give you a real life customer experience report.
When I went to New York recently, I was looking forward to some amazing shopping, but, not looking forward to those pesky currency conversion charges on my credit card, that can add up super quickly. So when I found that my airline Frequent Flyer card could also be used as a pre-paid credit card in local currency, I immediately transferred some cash into it, and watched the exchange rates daily. Exchange rate fluctuations can seriously affect the profitability of a product in your store. Not only is there the actual unit cost, but also the freight to get it to you, and both of those amounts will change, depending on the exchange rate for the day. I’ve seen many small businesses that order a small shipment of stock, for say, a thousand dollars, but by the time the payment comes due, the price may have changed by hundreds of dollars. Those dollars could mean the difference between a profitable product, and one that ends up costing you money. There are a few options that you can utilise, when it comes to hedging your currency. If you have the funds upfront, you can use a pre-paid card, like the one I used when I went to New York. So how to these cards work. Essentially you use them like you would a visa debit card, or a credit card, but you have to load funds into the card, and once they run out, they run out. The great thing, is once you’ve converted the currency, you have a set amount. You’re no longer affected by currency fluctuations and you aren’t subject to those pesky currency conversion fees on every transaction. The downside, if you want to call it that, of this method, is that your funds are tied up, until you use them. There’s an opportunity cost that comes with not being able to access your funds immediately, but there is also the benefit that comes with the security that the amount you have available isn’t going to change. The next option that you can use is Forward Rate Agreement, also known as a Forward Foreign Exchange. Utilising your financial provider or foreign exchange company, you simply fix an exchange rate for a date in the future. If you do this often, you may qualify for a line of credit associated with the account, meaning you only have to pay, when the exchange is due. This ensures that you know exactly how much an order is gong to cost you, ahead of time, which allows you to plan and forecast your cash flow. And my last, super simple way to hedge our currency, is to use Paypal. If you’re already using paypal as a payment gateway for your online store, did you know you can convert currency at any time? Simply log into your account, and find the Manage currencies option. If you have the old interface, it’s in the top right of your overview screen, and if you have the new interface, it’s in the money section. From their, you simply choose a currency, and how much you want to exchange. Once you have exchanged the currency, again, it’s a set amount. And, being able to track and forecast your cash flow, can put you in quite an enviable position compared to your competitors. Having that advantage, can save you thousands of dollars every year. If you’ve found this information useful, come join the Bringing Business To Retail community. You’ll be joining a bunch of retailers from all around the world chatting all things business. Best of all, it’s free.
Are you using your B&M store, market stall, or pop up shop, to the best of it’s ability. Whilst a lot of retailers shy away from the overheads and the responsibility that comes with having a bricks and mortar store, the fact is, with the overheads, comes a distinct competitive advantage. But, are you using that, to the best of it’s ability. When you have a bricks and mortar store, not only do you need to exploit every piece of real estate in and around it, but you also need to fully utilise the people you hire, and their skills.
If a customer comes in for a specific product, you have the ability to show them products that they may not have ever come across. It’s your job, as the retailer, to make the shopping experience as fulfilling as possible. This means offering cross sells. If a customer comes in for new dinnerware, show them placemats, a fruit bowl or a gravy boat. When opened up to new possibilities, a customer is likely to enjoy the experience more. Trust me, if they’re not interested, they’ll tell you.
a customer can be anti a product before entering your store. Maybe a friend mentioned something, or they saw a review on facebook. Perhaps they don’t even know why they don’t want a product. If you think a product totally suits what they’re looking for, it’s up to you to educate them on why the product will work for them, allay their fears, answer their questions, and let them make an informed decision.
People buy on emotion. Now, no matter how great your images are on a website, nothing beats the physical. Being able to touch, to smell, to try on. I love online shopping, and recently, I had to buy 4 new barstools for my kitchen. They had to have a back, and go with a timber and white kitchen. I thought I had found the perfect ones online, but, my husband was adamant that we had to sit in them. I was so glad that he did, because the stools I’d chosen, were uncomfortable. The back wasn’t high enough, and in real life, they looked, well, cheap. I instantly reacted to those bar stools physically, and emotionally. I also became super clear on what I was ACTUALLY looking for. I’d educated myself (the sales staff weren’t particularly helpful), I was open to what else was in the store, and started looking at rugs as well. Now, when I was shopping on the online store, I hadn’t even thought to start looking at rugs and cushions. The bricks and mortar store had the ability to significantly increase my order value. Ensuring that you’re staff are well trained, know how to actively listen and problem solve a solution for your customer, and that your staff know your products intimately, will have you increasing the money that’s coming into your retail store. Until next week, be profitable
Consumer sentiment. Technically speaking, it’s a statistical measurement and economic indicator of the overall health of the economy as determined by consumer opinion. Personally, I think the media has a lot to do with the way that consumer sentiment rollercoasters. If the media is telling everyone that we’re heading for a recession, then of course people are going to become more wary about spending. So when your retail cycle is starting to slump, how can you change the lookers in your store, into buyers? When a person comes into your store, they already, subconsciously, are looking to purchase. So, making sure that you give them attention, is the first step to getting them over the line, and for them to have trust in you. Don’t be forced. Don’t ask “how can I help you today”. Be attentive, take in their body language. Do they want you there by their side, or do they want to take some time on their own to assess the product, and just want you to be available when they have a question? Don’t force descriptions on them. How many times have you been browsing in a store, or even a market stall, and the sales person immediately starts throwing facts of a product at you? What’s your first reaction? Likely, it’s “ugh, give me a moment will you”. Try engaging your customer first, rather that talking at them.
Remember to pause. Listen and ask questions. Don’t get into your spiel, and expect the customer to be rapt on your every word. Stop, pause, ask for permission to move on. Be passionate about finding the right product for the customer, not the one you love most. It’s easy to fall into the rut of recommending the same item, because you love using it. And when it comes to getting them to hand over their cash, ask them if they’re looking to buy today, or researching – you can tailor your offering and information, and the time that you spend with them, to maximise their experience, and allow you to navigate between customers in the store. If a customer appears to like a product, but just can’t make it over the line, is there a way to let them try before they buy? Is it possible to take it out of the packet, have a tester, or, even let them hire a product to let them experience it for themselves? Think of those products that people get stuck on, that they find difficult to take the leap, and work out a way that you can help overcomes the obstacles to purchase. And remember, not everyone will make a purchase the first time they walk in your store. It’s up to you to follow up, to create a relationship with them, and to build trust. So, put a system in place, that will allow you to capture their details, and to stay connected with them in the future. And my last tip, to turn a looker into a buyer, is to give them a quote. This too, is a great way to get their contact details, by offering to email it through to them. If a customer is open to you giving them a quote, their also open to you following up. And following up is where 95% of sales are lost. IF a retailer even bothers to follow up the first time, inevitably, if the customer isn’t ready to buy, they just let it drop. It times when the cash register isn’t ringing as much as you want, you need to be chasing up every customer, love your customer, listen to them, find them what they want, and continue to communicate with them, once they’ve gone. If you implement those strategies, then your conversion rate should see an increase.
Is it worth outlaying the money to gift wrap items in your retail store? By the time you've bought paper, ribbons, card, somewhere to store it all, not to mention the time it takes to wrap, the dollars add up.
Should you offer gift wrapping as a retailer?
[Tweet " Do you offer gift wrap services?"] Do you charge for gift wrapping? Let me know in the comments below what offering gift wrap has done for your business.
In this episode you will learn which tools you should use in your business
Today ‘s guest is Trista.
She’s the next business to be featured in the real retailer’s series.
And what a story she’s got to tell you.
You know when you meet someone virtually, and they look so cool and hip. Their stuff is gorgeous, and you get a bit of online envy going on…. Well, that’s how I felt when I met Trista.
She seemed to have it going on. But, you should never judge someone else’s success from what you see on the outside. You know that right?
Tracy is the second of our Real Retailers series for February.
I have to admit, that I didn’t know a lot of the background before Tracy came onto the show, and I was already full of admiration for her, I mean, she’s got 7 kids, that in itself in the makings of a superwoman in my eyes.
Yet when Tracy tells her story, I literally had tears in my eyes. I have so much admiration for people who can take a series of crushing events, and use the outcomes, to them into their dreams.
You are going to love this episode. Tracy is down to earth, matter of fact, and you will just want to give her a virtual fist bump.
Let’s hear one woman turned devastation into destiny
Today I introduce you to a new series here on the podcast. It’s called Real Retailers. As the name suggests, it’s a series where I interview actual retailers, people just like you, who have created greatness in their retail business.
This week, I want to introduce you to Marnie.
I love her to bits. She’s got the most wicked laugh, that just makes you smile.