"What Are You Seeing Out There?" -- Retailer

This is one of the most common questions that my consulting clients ask me. They want to know: "What is happening with the businesses that I visit around the world? How are other operations doing in this economy now? How are consumers responding? What is working and what is not working? Are people buying? Is the general feeling up or down?"

Here is what my experiences are telling me now:

This has undoubtedly been the worst recession in America since the great depression. It is the biggest that I have experienced in America in my career. (Although the Asian banking and currency crisis was just as big in the mid-90's when I was working there). The primary U.S. stock market (Dow Jones Industrial Average) fell from a high of 14,500 to 6,500. Trillions of dollars have evaporated. Along with this, unemployment rose steadily as consumer spending plummeted.

Independent retailers sure have felt their fair share of this loss and I really believe they were the hardest hit sector in the U.S. economy. We can all name numerous companies that have gone out of business in the past two years. For those companies that have hung on, I've seen some with 50% drops in sales from their "glory days" and 20% declines have been commonplace.

That said, there were bright spots. Select operations have managed to bust their butts, work smarter, and innovate to avoid declines. Some have even had increases in sales.

But there is something more important than sales: PROFITABILITY! That is a prerequisite and determinant of sales growth. During the recession, I have seen that the most profitable companies were still the most profitable companies, regardless of what has happened to their traffic and their sales. Great businesses have remained the same great businesses in the recession as in the boom.

In my opinion, a great business is defined as businesses with people that embrace learning, innovation, efficiency, self-investment, integrity, and respect for all. They mandate excellence and high profitability. They can make quick decisions, manage professionally, and execute their strategies. They enjoy the process of getting better at what they do.

So, what's next?

The recession is over. Recovery has begun. The economy and retail sales have stabilized. Revenues have stopped declining. That means, and I will repeat, THE RECESSION IS OVER!

Smart companies have restructured themselves during the downturn and are seeing decent profitability levels again. Just look at the earning reports on CNBC. Even though sales are flat and definitely nowhere near peak times, in most cases, earnings are good.

Across the U.S., retailers that we work with are doing the same. They are becoming efficient at their new sales levels through maintaining proper inventory mix, capturing appropriate gross margin, changing marketing methods, and investing in expenses that add rather than take away from their businesses.

It is extremely important that you have decent profitability at this point in the economic recovery. First, it will determine whether you will survive the bottom that we are currently in. Then, this efficiency will allow you to reap the maximum benefits in the future when consumers return in larger numbers.

If you are not maximizing your profitability now, do so quickly. To do it right, and as fast as possible, you should contact us and we will help you as we have helped others.

Advice:

Don't worry about the PAST. It does not exist. It does not matter if sales once were double where they are now. What matters is NOW!!! Get your business in order NOW. Turn your fixed expenses into variable expenses NOW. Build your productivity and profitability NOW. Your future will thank you.

Good luck!

Warehouse Case Study on Client: Sherman's Furniture

Here is a great article about a great company. Dan Bolger writes about the Sherman's distribution center and their management's commitment to efficiency and excellence.

"The bottom line summary is that the lines of communication are short at Sherman’s and the management team moves quickly to resolve issues. Their attention to customer satisfaction will continue to serve new and existing customers while providing additional opportunities for their employees." --- Dan Bolger

Read the Article

Furniture World Article on using GMROI and IGMROI

Track this inventory metric to understand your customer’s buying patterns, establish a more relevant product mix, satisfy more people and sell more.

by Daivd McMahon

Consumers’ tastes and the economy are constantly changing. Some vendors and categories that were once popular are not anymore. You cannot control your customers’ tastes or the economy, least of all, through general advertising. This is impossible. If you agree, ask yourself, “What can I control?”

In this article, you will discover how to listen to what your customers want in order to make more informed purchasing decisions. If you can manage a process, you can influence and control it. So, by better understanding your customers buying patterns and establishing a more related product mix, you will satisfy more people and sell more.

First, take the guessing out of the equation. There is only one group’s opinion regarding the desirability of purchasing your products that matters. It’s not your buyers, your reps, suppliers or your competition. And, it’s not you or me. It’s your customers!

Buying is analytical. You need to know what your customers are purchasing and what they want to buy from you in the future. With any top industry Customer Relationship Management (CRM) software, this data should be readily available to you.

Read the full article in the latest issue of Furniture World

Five Common Questions about Inventory Management

by Chris Millet, Business Coach

As I work with clients on proper inventory management techniques, I encounter some common questions and concerns. I thought we may have other clients who have the same questions, and decided to share them with you. Most of these concerns stem from a perspective, which has caused improper inventory management in the past. Our inventory management techniques are time-tested and proven, but, as with any new technique or process, inevitably there is a resistance to change and a fear of the unknown. The following is a list with responses to five of the most common concerns, expressed to me recently.

1. In today's economy, customers are looking for inexpensive items and immediate satisfaction, which many times causes me to sell my floor models. How can I nail my best sellers to the floor and still satisfy my customers?

Click here to read the full article

Web Summit 3.0 Presentation - From Las Vegas World Market Center

Thank you for all those that attended. Download the pptx, or the .pdf.

Web Summit 3.0 Live or On-Line - Register Now

Web Summit 3.0 - Live or On-Line Is your online strategy struggling? Do you even have an online strategy? The third Industry-Wide Web Summit will unite home furnishings retailers, manufacturers, representatives and suppliers. Monday, September 14, 2009 | Opening day of the Las Vegas Market Building C | 9th Floor | Room C976 | 1:00 pm - 4:00 pm You will leave the Web Summit with practical, real world information and implementation strategies for all areas of electronic media and web for the furniture industry. Seating is limited. Registration is required for this free event. How to Implement Email Marketing and Social Media for Results David McMahon | PROFITconsulting Throw Web-Based Marketing Into Your Mix Ron Carpenter | Strategic Marketing Solutions LLC Demystifying the Online Furniture Shopper David Lively | The Lively Merchant Create an Engaging Website that Brings Your Brand to Life Online Renee Loper | aspenhome For additional information, please email consulting@profitsystems.com