Gourmet News Editorial Retailers Holiday Update 2008

By Joanne Friedrick

In the dog days of summer, retailers have already been plotting their holiday strategies.  This year, of course, the sagging economy adds a wild card to those plans.  So what is a store owner to do?

According to Anne Obarski, executive director of Merchandise Concepts, a retail speaking and coaching service based in St. Charles, Missouri, the economy shouldn’t dictate how a retailer plans for the upcoming holidays.

“I don’t think it makes a difference what economy we are in now,” said Obarski.  “What retailers have to come to grips with is that customers have little loyalty as their shopping experience is global.  (Shoppers) have more options than they have ever had before.  Link that with the economy, and they will save gas and let their fingers do the shopping if we don’t give them a reason to come touch, taste and feel our products.”

James Hallman, owner and operator of The Hallman Company, a retail consultancy near Atlanta, said he is counseling clients to stay positive.  “You can’t control the economy, but you can focus on what you can control,” he pointed out, such as inventory levels, your marketing message and whether that message is reflected in how your store actually operates.  For example, if you profess to have superior customer service, will a customer experience that the moment they enter your store?

The economy will take its toll on marginal retailers, Hallman noted, but that can present opportunities for those who remain.  The question becomes whether your store will be a mere survivor-just getting by in tough times-or become a success.

Hallman said a savvy retailer is able to control the positive, emotional levels of its customers by tapping into one of four emotional triggers-pride, profit, pleasure and peace of mind.  For a specialty coffee shop, peace of mind for customers may be knowing that their favorite brand or flavor is always there, while pleasure is the ability to enjoy that special cup of coffee.

Pride and pleasure can also be related to a customer’s ability to be the first to find a new item, which makes inventory control a key factor in holiday planning.

Hallman said when times are tight, product mix and appropriateness is more important than sheer volume in a store.  He said inventories should be staggered so some new items are released early to accommodate fashion shoppers-those who want to be the first on the block to have a new, hot item.

To make store appear fuller, Obarski said retailers should tighten up their displays and focus on those areas that are the first ones a customer sees when he or she enters a store.

“The cleaner your store and inventory look, the easier it is for customers to shop,” she said.  “don’t confuse lots of inventory with increased sales.  If you really know your customer and buy for their needs and wants, it will be easier to merchandise in depth and not be spread out.”

Additionally, said Obarski, customers are likely to shop in person if the store offers an “experience”.

“Kitchen and gourmet stores have the perfect venue to offer something that addresses all the senses,” she said.

Hallman also cautioned specialty retailers to position themselves away from a low price model and play up the store’s uniqueness, experience and quality.

“Consumers want the highest quality, lowest price and best service,” acknowledged Hallman.  “But no retailer can consistently deliver all three.  You need to decide which one or two you really want to focus on.”

In preparing the store for the holidays, Obarski offered these suggestions:

• Focus and plan merchandising techniques around the highest turning items
• Thin your inventory by offering sales on those items that are poor performers
• Have employees shop the competition, whether online or in person, and have them pinpoint areas of improvement.  Extra training with specific performance expectations that are linked to rewards can help shape how employees deliver customer service
• Meet with all employees and let them know as much as you can about all the areas of the business, from expenses to planned sales to operational issues, so they feel ownership of the store and will work harder because they understand the big picture
• A mystery shopping program can also be used to test how well employees service customers before the busy shopping days occur.  If there are issues, there will be time to address them before the holiday rush.

Hallman also suggests the pre-holiday time is when store’s should get the customer lists in order for marketing programs via mail and email.

Once customers are in the store, it’s important to provide a high level of customer service, even on the busiest of days.

“As (store) leaders, managers must convey the importance of communication skills on the part of each and every employee,” said Obarski.  “No matter how busy someone gets, they need to make sure they either make eye contact, physical contact or verbal contact with customers.  Holiday season is the time to court that new customer so they continue to shop throughout the year.”

Although retailers may be feeling some angst about the upcoming season, Hallman said a dose of reality will put things into perspective.  “The economy is tough,” he acknowledged, “but it’s not the Great Depression.  We know things cost more and we have to prioritize spending, but the customer will still buy what they love from the places they love.  What retailers need to do is look at what people like about them and do everything they can to maintain that position.”

Joanne Friedrick is a freelance writer and editor in Portland, Maine.

Anne Obarski is the director of Merchandise Concepts in St. Charles, Missouri

James Hallman owns The Hallman Company in the metro Atlanta area