While some gift shop owners concentrate on stories of doom and gloom about retail others are chasing and enjoying success large and small.
Through my work I get to meet with plenty of retailers and look at many businesses.
I am certain that success is not an accident.
Success is planned for and chased. It is the goal reflected in every business decision. It comes from refusing to let the business run you.
I’d like to share three real-world stories with you.
The small shop turning over $380,000 a year and growing 28%
I was talking with a gift shop owner this past week about their 28% increase in sales in the financial year just ended.
Yes, you read right, a 28% lift in sales in the 2012/13 year. This is on the back of a 17% increase the year before. This is a business that is more than ten years old.
This is no accident. They planned for it by carefully looking at their business data and shedding products that were not working. They adjusted opening hours too as they discovered business later in the day that they had not realised was there. This knowledge opened them to opportunities for last minute shoppers.
The owner of the business decided to chase success because the turnover was barely enough to cover rent, wages and the loan taken out to fund the business. It was grow or bust.
They planned for success by using their business data. The first year – 17% up from a low turnover base – was encouraging. The 28% increase this past financial year proves value of paying attention to business data.
Sales data guided them as to the suppliers of the best to focus on. One employee was eased out of the business for failing to achieve minimum sales targets.
The owner spent more time on the shop floor selling to achieve minimum margin dollars per sale rather than just chatting with shoppers.
The result shows what can happen when you focus on being a retailer, the owner said to me with a huge smile.
A gift shop reengineers and saves itself
Another gift shop I have been working with was in trouble. Shops nearby were closing and the small shopping strip had a dark feeling. For a while they were sucked into the cloud of doom and gloom.
Checking their data we saw that several special interest items sold well and provided an above-average margin. They used this knowledge as the basis for small expansion.
Over six months they increased their range of the special interest items and they connected with community groups to share knowledge.
Over six months sales grew, not into double-digit growth but they were happy to have at least stopped the decline.
In the second six months sales grew further. Now they were into double digit growth territory. Shoppers happy with their specialisation were telling others. Word of mouth was driving extra traffic.
That was a year ago. Today, this business is very different. People travel for up to two hours to see their range. The average sale value has more than doubled, margins are up 15% and customer traffic is up 25%. Combine these three and you can see why the owner is very happy.
They did not plan to become a product specialist. The survival of their business demanded it.
How a product category drove sales and profit
This gift shop owner came to me because they were in trouble. Sales were falling. Together, the owner and I took an in-depth look at their data.
The category performing best in terms of return on investment and return on floor-space was plush, teddy bears and some soft toys. That can’t be right, said the owner, it’s stuck in the back of the shop.
Data does not lie. It revealed that their small selection of plush was selling well despite the owner and the employees not being all that interested in it.
Fast forward six months and this business has turned around. They are now a plush shop at the front with other gifts. Sales are up 65% and climbing. They have increased their margin too – because they have products others nearby don’t have.
Turning this business around was easy as the data offered the guide. The changes took a week to complete and initially required only a $5,000 capital investment in additional stock.
Own your success
Gift shops of any size can achieve growth in any economic situation.
People don’t stop giving gifts in tough times – they just change what they give.
By taking a fresh look at business data gift shop owners can change focus, attract new shoppers and get existing shoppers spending more.
