In tough economic times, the temptation is to concentrate on all the things you shouldn't do as a natural products store owner. You shouldn't advertise. You shouldn't offer product promotions. You shouldn't provide in-store cooking demos. You shouldn't increase inventory. Although these cutbacks might save you from spending anything extra in the short run, they may have the unintended effect of decreasing sales in the long run. Instead, why not use our nation's financial fiasco as a chance to actually improve your store's bottom line? Try these 12 business-boosting steps recommended by our panel of natural products retailing gurus:
- Jon Schallert, president of The Schallert Group, an independent business consulting firm in Longmont, Colo.
- Carolee Colter, owner of Nelson, B.C.-based Community Consulting Group, which specializes in solutions for natural foods co-ops and independent retailers
- Mark Mulcahy, a 27-year organics industry veteran and owner of Organic Options, a produce consulting service for retailers in Santa Cruz, Calif.
Lynea Schultz-Ela, owner of A Natural Resource, a Hotchkiss, Colo.-based consulting firm for natural foods stores
1 Celebrate your quirkiness. Too often, small retailers think they need to model themselves after big, successful grocery chains, Schallert says. This could include everything from outfitting employees in matching polo shirts with store logos, putting out a circular every Wednesday or creating a store layout that's similar to the competition's. But that's not why your customers like you, Schallert says. "They like your authenticity and that you're not super-polished. They like that you're not like a typical grocery store chain."
2 Keep shopping. "New products are the lifeblood of the natural and specialty retail trade," Schultz-Ela says. "While the risk is higher in times of economic downturn as retailers appropriately push their inventory down, new products remain a requirement to attracting and keeping customers in our class of trade."
3 Woo women and boomers. These shoppers have the most money, time and inclination to search out your store, Schallert says. Court women by including pictures of females, or their testimonials, in your ads and promotional materials; lure baby boomers by hosting classes about their health issues.
4 Take a new approach to cleanliness. Rather than a grueling, morale-busting storewide spring clean, Mulcahy suggests breaking the task into small increments. "Set up a cleaning schedule for each department," he says. For instance, "in produce, clean part of the racks once a week. In an eight-week period, you've cleaned the whole stand."
5 Open your books. Like it or not, your workers are talking about your store's finances, Mulcahy says. So turn it to your advantage by embracing transparency. "Teach your employees about company finances and how their work affects the bottom line," he says. Not only will they realize that $1 million in sales doesn't equal $1 million in your pocket, "They will also learn that they have a hand in their own financial health; how they perform affects how the store performs."
6 Price strategically. Rather than using margin targets to set your retail prices, it's "critically more successful to your penny profits and your price message to utilize a well-developed price strategy by category throughout your store," Schultz-Ela says. She likes the "good-better-best" approach, where items are priced based on their attributes or perceived value (standard versus extra-virgin olive oil, for example). Schultz-Ela says "good" provides profit through volume, "better" provides profit through volume and stronger margin, and "best" provides profit through strongest margin but low volume.
7 Make your store look full. "You may say, 'How can I do that? I don't have the volume of a Whole Foods,'" Mulcahy says. "But you just have to look full—you don't have to actually be full." For instance, a round platter in your produce department may hold two cases of tomatoes. But upend a decorative bowl in the center and you only have to put out one case, while creating the illusion of a well-stocked display.
8 Follow the signs. Make sure everything in your deli case is labeled, Colter says. "Who's going to buy the item if they can't even tell what it is? It's amazing to me how often this happens."
9 Create experts and put them to work. Whether it's a deli worker who is a cheese whiz or a supplements stocker who can categorize by condition, these people can literally be the face of your business, Schallert says. They can send recipes to local newspapers, talk about new products in your newsletter or lead in-store classes.
10 Raise the praise. "There seems to be a certain amount of fuzz in people's minds when it comes to money," Colter says. "Tell new employees what they need to do to earn a raise and when they will be considered for one. Then regularly remind all employees how the system works." But make sure you don't let the raise do all the talking, she cautions. "A raise without recognition of the performance that earned it won't motivate anybody."
11 Rosemary is for remembrance. "One of the main reasons people come back to a place is that people remember them," Schallert says. He recommends that employee-training programs include classes that teach memory skills. Also try stocking the break room with memory-boosting books, CDs and audio books to help customers' names stick.
12 Collect database information. Memorize more than just your customers' names, Schallert says. If you have their e-mail and home addresses, you can include them in newsletters, circulars and direct mail. So why would anyone want to give you this personal information? "Create something of value, like a contest or an e-mail newsletter that lists specials—something that makes people say, 'I want that; I'm willing to give my address for that,'" he says.
Vicky Uhland is a Lafayette, Colo.-based freelance writer and editor.
Natural Foods Merchandiser volume XXVI/number 8/p. 16