Canadian Retailer - Holiday 2013 - 26

MYSTORE RETAILER'S GUIDE VOL. 9.6: RETAIL SALES

3. Sell at cost

6. Feature a vendor's product lines

Norins advises independent retailers to sell
aging inventory at cost. New products arrive
in January and that new product needs to take
priority. Sitting on last year's products in hopes
that someday they'll sell at a profit locks retailers into a loss. Selling at cost clears up space
in the backroom and on the shelves, and more
importantly, it frees up money.
Retailers sometimes hold onto dead merchandise because they love it and they hope
that one day it will sell. The cliché rings true in
this case: if you love it, let it go. Sell it for cost,
get your money back and move on.

Independents can use January as a time to
romance vendors, helping their partners while
they help themselves at the same time. Hit up
the vendors with the most popular products
in the store for special favours-like swag to
give out at customer events or exclusivity over
products in a certain geographic area.
Build a relationship with vendors by promoting the vendor's brand. One way to do this is to
stage events around the brand and its top selling products. And turn to vendors to help stage,
support, and promote these events. Most vendors will likely jump at the chance to have their
products singled out, and retailers will reap the
benefits through increased traffic and sales.

"It is critical that retailers stay top-ofmind, especially because customers
move out of the buying mindset after
Christmas. If you're not directly in front
of them, someone else will be. The big
box up the road is in front of them."
- PATRICIA NORINS
Retail Expert
4. Revamp the mark-up strategy

Independent retailers need to examine their
mark-up strategy in January, Norins says, to
make sure they maximize margins throughout
the year.
Independents should look at using a keystone mark-up, if the vendor agreement allows.
A keystone mark-up assesses the total cost of
the product, including shipping, handling and
storage, and multiplies the cost by two.
"Independents have wiggle room because
they usually don't compete on price point,"
says Norins, and so they might want to consider a keystone mark-up of 2.5. The extra margin
creates space for deeper-and still profitable-
margins when it comes time to liquidate.
5. Conduct a vendor analysis

That post-Christmas lull in the dead of winter is the time to conduct a vendor analysis,
says Leah Chevallier, a retail consultant who
owned and operated six retail stores in Calgary. She says independents should pull the
top three to five top selling suppliers and look
for increases in gross sales. They can use this
data to leverage volume discounts and lower
minimum order quantities, or to request special discounts for new lines in January.

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canadian retailer | holiday 2013 | www.retailcouncil.org/cdnretailer

7. Remake store windows

Store windows represent the single biggest
street-level promotional tool available to retailers. They are also the most underused resource
for many independents.
The new year is a time to refresh the windows. Not just with new displays but an overhaul-clean windows, fixed trim, new vinyl
lettering on the windows that announces the
post-Christmas events.
"Where is the art?" asks Norins. Too many
window displays, she says, don't take advantage
of the power of storytelling and advertising. A
passive display slips into the background of the
streetscape. An active display speaks the store's
message, tells a story, presents a featured product, and communicates the values of neatness
and professionalism.
8. Remerchandise the store

The Christmas season is an all-out party.
The hangover comes in January. After the
Christmas rush, the store needs some grooming and a jolt of caffeine-some cleaning and
new merchandising.
"After Boxing Day, the store is going to feel
picked over. That isn't conducive to making
sales," Norins says.
It's true: nobody, except the vultures, likes
picking at a carcass. Remerchandising the store
doesn't require a planning committee. All it
takes is a shuffle-move product to different
parts of the store, redo the ends of the aisles and
face the shelves.
It's also important to put the new year's products
at the front. Retailers who put discounted merchandise up front are saying to customers, "This
store is a carcass. Come and pick at the bones."

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Canadian Retailer - Holiday 2013

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