The festive season is arguably on every jeweller’s mind right now; however, it should not be lost on retailers that 2017 is just around the corner.
The retail game has changed and tough times call for businesses to re-examine their approaches to operations – being proactive rather than reactive seems to be more important than ever.
With this in mind, here are some tips and tricks for how to revitalise and increase business profitability in the upcoming year.
Mark it down
Marcus Hancock, director of sales and marketing consultancy MJH Group, says a marketing calendar is the best way to establish effective promotional campaigns.
“Without a marketing calendar, it is impossible to be disciplined and to approach marketing campaigns in a consistent and coordinated way,” he states. “It helps businesses to determine promotional and sales budgets in advance, reduce the spend on ineffective marketing, positively impact customer behaviour to increase sales, manage peaks and troughs in income and stick to the marketing plan.”
Hancock believes the first port of call when developing a marketing calendar lies in the simple act of dividing it into months and then noting key events taking place during the year. Christmas, Valentine’s Day, Mother’s Day and Father’s Day are obvious inclusions but be sure to add other relevant dates such as school holidays and sporting events as well as key catalogue and sale dates.
Once key events have been filled in, identify what is happening in relation to advertising and promotion, which could be anything from catalogues, print advertising, in-store promotions, direct mail, window displays and website and social media promotions.
While many retailers may stop after this point, Hancock says it’s important to take the calendar to the next level by actioning the following steps:
- Address the purpose and audience of each promotion. This is also a good time to consider whether there are enough campaigns for both new and existing customers, as well as for niche target markets such as loyalty-program customers and male gift buyers
- Calculate what the marketing ‘wish list’ will cost. Pour a stiff drink, fill in the ‘cost’ column on the calendar and add up the total. Does the amount fit the advertising budget? If the answer is yes, then great; however, if the answer is no then the number of campaigns may need to be reduced. The aim here is to develop a calendar that balances repetition, reach and risk.
Hancock concludes by stating that the final critical step in creating a marketing calendar is to track the results of each campaign generated – this should be documented in a ‘ROI’ column.
Tracking results can be as simple as asking customers where they heard about the store or whether they received the Mother’s Day catalogue. This enables the business to evaluate the effectiveness of each campaign and determine which ones should be repeated. This step also makes it easier to prepare subsequent calendars in future years.
Flush with cash
Jewellers planning a holiday in January or February may wish to think again.
According to Retail Edge Consultants co-founder David Brown, January and February might seem like ideal months to take a break but it’s also the period when stores can reap the most benefits.
Brown states the average store will achieve 20 to 25 per cent of its sales in December with only a limited increase in overhead costs, mainly staff. It’s not hard to have more money in the bank at the end of December; however, he warns it’s what comes next – ie, how these funds are used – that matters.
“[Most] stores loosen the purse strings and reinvest in stock until they run out of money again, and the result is poor cash flow and more stock than they had leading into Christmas,” Brown says.
The fact is that there are a myriad of cash surplus options that can be used for the betterment of business – think investing in new product, repaying debtors and relocating.
For retailers needing extra help in identifying where they could effectively use their cash surpluses, Brown refers to a formula developed by Canadian business trainer and self-help author Brian Tracy. The four key areas business owners should address include:
What should you do more? This involves looking at what worked well – either by careful planning or sheer good fortune – and whether these processes can be expanded.
What should you do less? Think about the biggest frustrations over the past trading year and how you can have less of them. Delegation is at the forefront here.
What should you start doing? Don’t procrastinate – make changes now!
What should you stop doing? Are there product lines that are no longer profitable or staff members who are no longer an asset to the business? Are there activities/tasks that now appear pointless?
Increase shelf-esteem
Retail specialists Rich Kizer and Georganne Bender believe every sales floor benefits from a little reinvention and there’s no better time than the present to start planning.
Setting the sales floor for more sales involves a number of elements but let’s begin with the one consumers will more than likely notice first: store windows.
When producing show-stopping store windows, Kizer and Bender say it’s okay to fill them with ideas and inspiration so long as retailers don’t go overboard – after all, adding too much makes it harder for products to stand out. They also suggest implementing a general rule to change displays on the same day every two weeks; any less and regular customers will be bored and stop noticing the windows, while making changes on a specific day will build anticipation and train customers to watch for new displays.
Another strategy for improving store layout is to move important product from the ‘decompression zone’ – about a metre and a half of space just inside a store’s front door.
“Plenty of stores seem to have important product in the decompression zone and it just doesn’t sell,” Kizer and Bender state, adding, “However, once it’s moved further inside the store, it suddenly gets noticed. This isn’t an opinion – it’s a cold, hard retail fact.”
The pair also say it’s a proven fact that the majority of consumers enter a store and look or turn to the right, which means this area is prime real estate, or as they call it ‘lake-front property’, and should be used to house key product items.
What is mentioned here is only a snapshot of ways in which jewellers can start preparing for the year ahead. Pages 26–29 have also been developed with the aim of ensuring jewellers are armed with the tools to plan for 2017.
In the words of Benjamin Franklin, “By failing to prepare, you are preparing to fail.” Jewellers best jump to it then.
New Year Planner – More reading