Goodbye 2010. It's now time to look ahead and figure out how to take advantage of the new opportunities that 2011 will present. The glory days we saw before 2008 certainly won't return anytime soon (if ever), but there are some trends that can help savvy dealers improve sales and profits over last year. Here are a few:
- Competition will remain tough. Two major suppliers are in a war for market share, while Best Buy, Walmart and Amazon are all trying everything they can to get consumers to buy electronics from them. Prices and margins in appliances have sunk to all-time lows. But the independent dealers caught in the middle can compete by offering more and better services, such as providing the home theater experience instead of just a flat-screen TV or a complete kitchen design instead of a single refrigerator. They can also merchandise up from the derivative models that box stores use to drive traffic.
- Event promotion will continue to drive traffic. Follow the lead set in the marketplace and be ready for big sales over holiday weekends like President's Day, Memorial Day, Fourth of July and Labor Day. Shoppers will be out hunting for bargains and traffic will be strong. Pent-up demand will create opportunities for step-up and additional sales.
- Customers will go the net in increasing numbers for information and pricing. Don't shun them; embrace them. You've done something right ff they've shopped the web and then decided to come to your store. Ensure that the experience they get in-store matches the promise you make on the Web.
- Online marketing will become more important. Shift some of your advertising funds to email marketing and to efforts that will drive traffic to your website. Post your listings on Yahoo Local, Google Places and other directories, and keep them current. Get email addresses for every customer and prospect email address so you can reach out to them. Make sure your website is dynamic, has a broad product catalogue and compelling messaging. Include special online clearance and sale items.
- Mobile phones will replace Consumer Reports. Customers will use smartphones to check Yelp, Google, Facebook and other sites to see what others say about the products and services you offer. They'll look to see what experiences other shoppers have had when buying from you. Testimonials are powerful influencers. Be aware of your cyber reputation.
- Social networks will continue to grow. Get on Facebook and Twitter to spread your message to younger buyers. Millennials in particular will frequent stores who appreciate their reliance on social media. Create special Facebook events for your fans. Offer them special opportunities to preview new products or to receive early access to sales.
- Online sales will not replace a great in-store experience. Customers are shopping on the Internet and buying in-store. Now may be the time to remodel your showroom. New lighting, carpet and fixtures can be good investments. Be sure your staff is professional and knowledgeable and that they relate well to your customers.
- Independents will have to work hard to get suppliers' attention. Dealerscope Editor in Chief Jeff O'Heir was spot on in calling out Sony for not including specialty retailers in their effort to move their Internet TV initiative forward. Specialty retailers make up a small but mighty gang. Don't just settle for talking to local reps. Go to CES, CEDIA, KBIS and your buying group meetings to meet with company executives. Send them copies of your unique promotional events and press coverage you receive in your community. Give suppliers that support you special opportunities to be represented in store displays and in your advertising. Be a willing partner and make good on your promises. Command attention and demand respect.
- Lending to small business is easing. It's still difficult for small businesses to gain access to working capital, but it is improving. If you want to approach your banker to increase your credit or flooring line, get your financial house in order. Show that your inventory is in line with your sales and that you are maximizing your turns and your ROI. Make sure you are paying your bills promptly and that your cash reserves are adequate to meet your future obligations. It goes without saying that a healthy bottom line is critical when seeking financing.