If there’s one word that best describes Jeannette Howe, executive director of Specialty Electronics Nationwide, it’s “passionate.” Since the day she first stepped into a Tweeter store, she has found the audio/video industry electrifying.
Each time I’m asked to write for the Dealerscope accessories issue, I try to find a new and different twist to suggest how to sell additional products with each sale. But most of the time, it’s a variation on the same theme—fill the basket; get more add-on sales.
I try to use my holiday column to look ahead, but it’s always good to peek back to put those thoughts in perspective.
Highlights of the past year included the London Summer Olympics and Rupert Murdoch’ fall from grace. We saw the passing of Neil Armstrong, Phyllis Diller, Whitney Houston and Cosmopolitan magazine’s Helen Gurley Brown. The 2012 Presidential election cycle overshadowed anything else that was happening for a good part of the year.
There were a slew of unusual weather events, including earthquakes, floods, storms around the world, drought and record heat in the West, and Hurricane Sandy on the East Coast. The economy was still anemic at best and headed for the fiscal cliff. Unemployment is hovering below 8 percent. But at the same time, many businesses are struggling to find qualified people with the skills they need.
In the last couple of months I’ve gone to two different events where new products were introduced. Both the CE Line Shows in New York and the Levin Consulting Group Electronics Retail Summit in Las Vegas might well have been called Headphone and iAccessory shows. I’ve seen hundreds of cellphone and tablet covers and dozens of headphones, many of which rival those made by Bose, which for decades had a corner on the high-end market.
In the last couple of months I've gone to two different events where new products were introduced. Both the CE Line Show in New York and the Levin ConsultingGroup Electronics Retail Summit in Las Vegas might well have been called Headphone and iAccessory shows. I've seen hundreds of cellphone and tablet covers and dozens of headphones, many of which rival those made by Bose that for decades had a corner on the high-end market.
The introduction in recent years of fashionable and feature-packed headphones has led a market growth of more than $2 billion in sales. Walk down any city street and you'll see that the ubiquitous white earbuds are being replaced by a variety of phones in different styles and price points, especially those at the higher end of the scale. According to NPD, in 2011 sales of headphones priced over $100 doubled from the previous year, well ahead of growth in the category.
I mentor a couple of young entrepreneurs and sometimes I think I get more out of the time we spend together than they do. There’s no need to worry because their start-up is in another industry. But if it wasn’t, you’d have a formidable competitor to contend with.
Like the CE and appliance industries, they’re entering a highly competitive field. They’re the new kids on the block in a market that’s known for high failure rates. They’re undercapitalized, are having a difficult time finding an affordable location, and haven’t turned a profit or earned paychecks since they started eighteen months ago.
What they lack in experience and monetary resources they make up for in ambition, moxie and enthusiasm. Most importantly, they have a real passion for what they’re trying to do.
Unable to find a site, these young guns are selling their wares—in this case food—from a truck. They’ve invested every penny they could raise, mainly from friends and family, so they could create a first-class, organic, delicious eating experience for their customers. They may be selling food on a stick at fairs, parks and concerts, but their zeal keeps them focused.
Websites, Facebook, Twitter, Foursquare, blogging, Craigslist, eBay, YouTube, Pinterest,instagram, Groupon, Living Social, Google Places, AdWords, LinkedIn…..no wonder independent retailers are slow to move into social media and develop websites that are more than just electronic business cards.There are too many choices, too little knowledge, limited familiarity, and it’s too easy to make mistakes.
But think about this. Booz Allen projects social commerce sales to reach $9 billion this year and climb to $14 billion in 2013.Social media accounts for one out of every six minutes spent online.“The Internet is the biggest equalizer in the marketplace,” said Robert Lapointe, president of Quebec-based Tailbase, a web developer for retailers. On the web, the smallest local retailer has the same ability to capture the consumer’s interest as the largest big box store.“Intelligent use of social networks can position retailers ahead of large chains giving them a unique position in the marketplace,” Lapointe said.
Schaefer’s of Lincoln, Neb., has done just that.Third generation Ronnie Romero said he began to ask, “How do I reach ME?I’m a young father of three, don’t watch broadcast or cable TV, listen to satellite radio, and don’t read the paper.”Ronnie said that against his father Ron’s advice, but with his support, he cut their newspaper advertising 40 percent.Despite a lagging economy, the company has grown substantially.
In years past, I've written a January column suggesting a number of resolutions business owners might want to consider to grow their companies, increase market share or see a better bottom line. This year I'm only going to suggest one.
Knowing that I was familiar with the industry, my buddy Frugal Freddie asked me for some help buying new appliances. Eager to help and to ensure he got a great experience, I offered to take him into a great, local independent retailer.
I was a bit concerned about taking Frugal there because even through the recent recession, this dealer has continued to focus on selling luxury product to higher-end customers. The front of his store is displayed with a whole host of beautiful professional kitchen and European style vignettes that feature the best the industry has to offer. Beyond them sits a complete display of lower-priced replacement products.
Freddie’s not the cheapest guy on the planet but he does appreciate a good value. He tends toward mid-line goods when buying anything from clothes to cars. I hoped he wouldn’t panic walking through all of those beautiful kitchen displays.
Why do department stores allocate valuable, high-traffic first floor space to handbags, cosmetics, shoes, jewelry and pashmina wraps? Why do grocery stores stock candy bars, gum and magazines at the checkout counters? Why do beauty salons sell a variety of lotions, shampoos, conditioners and other magic potions? Why are malls full of stores like Claire's, Aldo and Brighton?
Why are the display rooms in furniture stores filled with plants, lamps and paintings? What's the draw of stores like Bijoux Terner, which are in airport terminals around the country and sell nothing for more than $10. Why are Apple stores teeming with docks, keyboards, mobile speakers and cases, chargers, cords and headphones?
In most cases: the answers are simple: Business is competitive, margins are low, and customers are lured to impulse buys. With traffic down, retailers are pushing more accessories to to get a bigger share of each customer's wallet. What these efforts in other industries show me is that there's great opportunity to increase accessory sales to our customers. With the right selection, an active sales presentation and compelling displays, you can increase volume, margin and customer satisfaction with the sale of accessories.
Want to increase accessory sales? Develop a solid plan.
There's no question about it, the giant promotions held over the big holiday weekends - from New Years through Black Friday - continue to grow and are quickly becoming a disproportionate and growing portion of the retail event year. We have trained customers to follow our marketing calendars, assuring them that they'll get the best deals during these events.
Since they're not going away, the question now is how to maximize the opportunity these sales events present.
I’d like to send early congratulations to the 40-under-40 group of industry leaders who will be recognized in the June issue of Dealerscope (and at Dealerscope.com, so stay tuned). They have worked hard and are certainly making their mark in the industry. As good as they may be, though, they provide unique challenges to their supervisors. The younger generation is bright, tech savvy and enthusiastic, but they don’t always respond positively to traditional management styles.
For the first time in history we now have four generations in the workplace. Generation Y, or The Millennials, were born between the late 1970s and early 1990s.Generation X represents the children of the Baby Boomers. As the economy has contracted many Baby Boomers and some senior veterans have stayed on their jobs as well. Each generation has distinct attitudes, behaviors, expectations, habits and hot buttons.
Remember when older workers were the bosses and younger workers did what was asked of them, no questions asked? There were definite rules as to how the boss was treated and how younger workers treated older workers. Today, roles are changing and new rules are being written every day.
Gen X and Y need very different leadership than the Boomers and Veterans ahead of them. They prefer to self manage and want their managers to mentor and coach them. Give them a job and let them figure out how best to get it done. Give them honest feedback.
The sky may not be falling after all.There’s a chance—albeit slim—that we may see some ray of pricing sanity returning to the industry.
I hear the complaints all too often."The way prices are dropping I have to sell 20% more units just to stay even." Or "Big box stores have not only managed to convince consumers that price is paramount, they've taken the margin out of the product as well."It seems like the perfect storm for unprofitable retailing.
While some dealers have convinced themselves that it's impossible to compete in today's marketplace, others have found ways to make money despite lower prices and margins.Here are some of the things they're doing to maximize every selling opportunity.
* Show customers you're competitive.If you're going to advertise price - either on your website or on other media-yours has to be as low as anyone else in the marketplace.Flaunt your price guarantee policy to reassure customers that you'll refund the difference if they find the product at a better price somewhere else.Few customers will take the trouble to check pricing after making their purchase, but your offer will help them decide to buy from you.
* Merchandise for profitability.It may be a bitter pill to swallow, but if you want to be in the game, your assortment must include low priced leaders similar to the products your competitors are using to draw customers to their stores.You need to stock the "better" and "best" products with features that will help customers buy more profitable products.
* Sell benefits.Unlike the associates in the chain stores, the knowledgeable, well-trained sales staff on your floors can demonstrate the clear benefit of step-up products.Train them to avoid features. Instead, focus on the differences that better items offer.Don't tell them about Hz and refresh rates. Tell them about crystal-clear theater-like pictures.Don't sell them steam or front loading laundry; tell them about energy saving and the end of dry-cleaning bills. Don't bore customers with BTUs, but tell them how quickly they can heat a pot of water to boil pasta in.
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…