9 More Mistakes That Get Retailers in Trouble

1. Megalomaniac ManagementYes, you’re the boss. Yes you own the business. Yes your business is not a democracy. So What? Your job is to lead your employees and your business to a success. Why is it that some bosses feel like they’re right and all knowing, and possibly contributing to some real work, even when nothing could be further from the truth? I’m guessing that these people are the same ones that feel they should have their own designated parking space. I’m also guessing that these are the people who spend large chunks of the day talking to other managers and owners from next door, playing golf too often, or taking 12-15 smoking breaks every day. And lastly I’m betting this is the same boss who comes back in the store and throws a mini tirade about the most minute thing out of place or not done just perfectly. At the end of the day, they wonder why more didn’t get done. Sitting at the big desk, or behind the two-way mirror, or generating lists from the backroom is not a how a small or mid-size retailer successfully operates, especially one that is still trying to get established. I’ve certainly observed some retailers like this. I call it “ASS-In-Seat, Mega Phone Mouth Retailing.” Sometimes it’s not the owner. Sometimes it’s the manager who’s on the power trip.Unfortunately, some of these people have perfectly wonderful employees, who take very sharp criticism constantly without ever a positive word. It’s never right enough, it’s never good enough and no one should dare disagree with them. If you see yourself in some small way here, make it your priority to change your attitude, before you lose your good people.2. Buying Things For Yourself On Company CreditThe worst thing that you can do as a retailer besides running off customers is to run it on too much credit. Too often, whatever credit a small business has, is used up and blown through initially like a pack of monkeys in a banana tree. Often some of this credit even comes from a series of credit cards that have been applied for. And too often, even those companies who have credit, run up more credit than they can repay. Unlike our brethren in government, you have to live and run your business within your means. A big problem aside from a business that never was ever close to making money, is that too many business owners find themselves buying things that the business simply doesn’t need. They also seem to take advantage of available credit too often for their own personal benefit. The feeling is, “I need to look successful. I work hard for my money. I can use it for home and the business.” Does this sound like anyone you know? The reasoning is: “It’s my business, there’s tons of cash flow, and in the scheme of things my little purchases are nothing.” The reasoning stinks! This is a big no-no in the business world. If your business is one of those businesses that have spent too much money via too much credit, change course immediately before it’s too late. If your credit has come from credit cards, you will find out all too late that the interest rates on credit cards can cause many additional dollars in expenses. A new or small retailer can almost never afford to pay these. There are too many other problems that can come up and bite you in the rear with a new business (such as over buying inventory and supplies) to be splurging on any personal goodies.3. Not Knowing What You Really WantDo you know what you really want to achieve and be when your store grows up. Or, do you just know you want to be a good or successful retailer. Knowing that you want to be good, or successful, or even the best, is not enough. Good at what? How will you get there? What does good mean? Can you define what your good store will be and what its employees will be like? You’ve got to spell it out and it’s best started with a mission statement. I don’t care if you spell out that you want all employees to have tattoos and a nose ring with black spiked hair. At least you can visualize, and it least you have a specific achievable goal. Once you know exactly what you want and exactly what you will be the best at, and you know the steps you will take to get there, you will feel better about it all. And, the better you feel about it, the more you will believe it. Lastly, the more you believe it is possible, the more you will be encouraged to keep moving in the same direction and stay focused on achieving just what it is that you want. Knowing what it is you most want – the more you feel good about what you want, the more you will believe it’s possible, the more you will keep moving towards having and allowing it to happen.4. Working Hard, Where Hard Work Doesn’t MatterYes, I know that you understand the importance of getting all of your employees to be rowing the boat in the same direction. But, what if you’re all rowing in the wrong direction? I don’t care how hard you or your employees work by the time you close the doors each day, a lot of hard work and activity doesn’t translate into progress or profits. Time spent does not equal profits or success, or much of anything else. If it’s your employee’s time that is being misused, it certainly means “dollars wasted”. If you’re not focused on the right things with the right people, you may be getting little value for your hard work. Keep in mind, if you’re lost, you don’t just drive faster. Think about this seriously for a few minutes. Stop, and re-assess your priorities and those that you give your people. I guarantee that many small and even larger retailers are lost to a certain extent and they need to stop and get directions, but instead everyone is at full steam ahead, while at the same time they don’t please customers. They don’t set themselves apart, their stores aren’t interesting and they don’t give their customers good relevant reasons to come back but…the shelves may be stocked and priced. NOT ENOUGH!5. Failing To Measure & Then MonitorYou’ve got to monitor the important metrics, or performance numbers and benchmarks that tell you how you’re doing on the work that is being done and whether your work is getting the results you want. The only way to be certain your time and focus are right, are to measure what matters along the way. Determine how to measure your efforts and what standards you will use, and then monitor those results. Those businesses that live and die but what they measure and monitor generally do very well on the things that they do measure and monitor. Figure out by what metrics you will evaluate your progress. It may be customer traffic, as applied to average sales dollars. It may be sales per hour per person. It should at least be sales per square foot, by product category. It certainly should be at least sales this year vs. last year by day. But that isn’t enough. It may be customer complaints or deliveries on time. Figure out what is important to you NOW and then monitor it, report it to your people and develop actionable goals and plan adjustments to keep things moving in the right direction. You do NOT want to keep this information to yourself. Communicate these figures to your staff so they know what they are and why they’re important.6. Underestimating The Demands Of Retailing:Retailing is not for the weak or feeble. The demands of operating a successful retail store are numerous, and constant. They can be physically and mentally draining at times. Retail entrepreneurs may take risk, but the smart ones educate themselves and analyze the market carefully. Some would-be retailers mistakenly assume they can open and operate a retail store, because they’ve been shoppers all their lives and so they must know retailing. Others think they can do it successfully in their spare time.Retailing involves a never ending cycle of buying, stocking, merchandising, marketing, cleaning, dealing with the public and dealing with your own employees. It can be extremely draining mentally and physically, even for those who are cut out for it, much less those that are not. It also means lots of long days and/or nights working both “ON” your business as well as “IN” your business. There is a difference. You will need to do both. Working ON your business means management tasks and big picture thinking. Often this area gets shortchanged because you find yourself all wrapped on the day-to-day grunt work. This is working “IN” the business. While necessary in a small business, you will need to remember that when you are stocking a shelf, you are an expensive employee performing that task, and the management tasks are being ignored because you are the only one who can do them. Some of them may be as basic as payroll, ordering and paying bills. If you can manage your business well, it can provide an excellent quality of life. However, if you’re not prepared to commit a significant effort, focus on a constantly changing business, and make it a major part of your life, and you still want to be in retailing, maybe you might just settle for being a greeter at Wal-Mart.7. Convincing Yourself That Your Customer Service is FineThis may be the single biggest mistake that talented retailers do and do frequently! Every business owner I have ever talked to, has told me they have good customer service, or that they take good care of their customers. BALDERDASH!! If everyone has such great customer service, then why is customer service in this country at an all time low? Do you get great customer service wherever you go? Your store is not there for you, and your customers are not there for your convenience. Taking care of customers does not mean saying, “hello” when they walk in the door, or asking them if there is anything you can do for them, and then taking their money, IF they buy something. Good customer service is not asking an employee for help only to have them read a side of a box or package to the customer to answer the customer’s question. Here’s a hint for your store… Customers can read the side of a box or package! You must train your employees on product knowledge, and the basics of customer service and even courtesy. Have your ever walked in a store, only to have the employee sitting on stool behind the register stare at you without a word, as if to say, “What are you doing here?” You can treat customers like garbage for months on end, sometimes years on end, but there is an effect and you will pay the piper. Maybe you’re the only game in town, but some other business or other alternative will come along and your store will be dumped like a kitty litter box that’s overdue.Good or great customers service is exceeding your customer’s expectations, being open reliably during convenient hours and being a relevant and interesting store. Being open from 11:0am to 5:00 pm doesn’t cut it for most people. Customers may not come because you have disappointed them in one or more of these areas. They may not come because you are not in a convenient location. A cheap leased location may be great for you, but lousy for shoppers. There is a whole street of shops near where I live that a handful of shop owners will close during the middle of the afternoon, or open an hour late. Some of these owners evidently are completely oblivious to the fact that this does NOT make customers happy and actually alienates many of them. Many of these close on Friday evenings, while the streets are regularly loaded with consumers who are dining out for dinner. Even if they break even on an evening, it may open your store up to customers who would never see or visit your store otherwise.8. Loving Your Products Instead of The MarketplaceThis problem may happen so slowly, you usually aren’t even aware of it. A nice store slowly stagnates and becomes less relevant over a period of time, because the owner is so in love with a certain product line, brand or even product category, even though the market has changed and the interest from customers in the merchandise has died. You opened your business hopefully to serve your target customers and become extremely relevant and important to them. You didn’t go into business to make a specific manufacturer successful or to support a dying product category. You may have always loved this line. Maybe you still do… but their time has passed and you can’t let go. You can’t buy what you want and like. This is not a hobby. It’s a business! You may be married to your store, but you can’t be married to your product purchases. While you may not want to totally get out of the category or product line, you can and should be monitoring all product lines and categories for sales strengths and weaknesses. You must follow where the market is telling you to go and where your customers are taking you today and tomorrow!9. A Worthless Website EffortOK, you went out and spent good money to have a web site, because everyone said you should have one. Congratulations! Now does anyone out there really know it’s there? How much traffic are you getting? Creating a great website and putting it on the net without any further plans to get traffic to the site is like building a 5 star resort in Buhler, Kansas. No one would have a clue, if it even existed! More than anything your website needs to become a major connection and relationship builder with your customers, but the greatest web site in the world is useless if you don’t get people and business to it. It’s sad to think of the money that’s been spent and the shear number of websites that just sit there with no traffic whatsoever. Having a good website is only the beginning to get customers to your site. Think about it realistically… how are people supposed to find your site if you don’t tell them how to find you? Remember, you’re in Buhler, Kansas.Getting traffic to your site takes time, effort and perseverance and is not accomplished overnight. There are a number of ways to get people to your site and some of them don’t cost much (if any money) at all. Submit your site to as many search engines as possible including some of the more popular sites such as, Alexa, DMOZ, AOL, Excite, Google, What-You-Seek, Kanoodle, Look Smart, MSN, Yahoo, Search It, and WebCrawler.Think about using “search-engine optimizations” or ways to increase traffic to your web site. There are businesses specializing in this field and their cost and quality can range significantly. You can also submit a one time write up of your site to any given group. Lastly, make use of social networking sites like Twitter, Facebook, You Tube, etc., to help get the word out.The absolute best way to use and think of your web site (especially if you don’t plan on doing internet sales) is to think of your site as one more weapon or tool in your quiver of arrows (so to speak), to fight the marketing and retailing wars for the minds and hearts of your customers.Anything and everything you do on your web site should be done with YOUR customers in mind. Think of content, appearance, tone or attitude, language, vocabulary, benefits, and interests. Also be sure that you’re marketing and promoting your site both offline and online. Every shopping bag, invoice, gift certificate, print ad and coupon should have your web address so customers learn where to find you. Display your website address boldly on walls around your store. Use your web site as an economic way to offer coupons, stories, information on products and even customers as well as e-mail offers. Make it your objective to increase the average time visitors spend on your site via the content, appearance and interactivity of your website and consistently work to give them more reasons to return to it. One basic way to improve visitor activity is to make sure your homepage is updated regularly. Websites that don’t change are boring. You want people to continue coming back. You want customers coming back because they want to see what’s new and you must give it to them. Develop a system and calendar for keeping your site fresh and interesting or interest in your site will rapidly decline. Work with someone on your website that can ensure you can get regular statistics for your site. You’ll probably want to monitor them to see if your changes are getting you the results you want, from the target group you want. Ask your website designer about these capabilities.