Big retailers dominate news about the economy as if they are the best indicator on how things are going, and boy do some of them complain.
Just the other day a big retailer spokesperson was getting media coverage about tough economic conditions. It was all negative talk, which does nothing to nurture confidence.
Here at Tower Systems we only serve local small business retailers, independent retailers. From where we sit we see plenty off good news, local retail businesses growing, plenty innovative, lots of positive results.
Small retail businesses are often more nimble than big retailers and this is important in changing economic conditions. Many small business retailers have learnt the value of targeting metrics beyond topline revenue.
The gross profit. Targeting GP% growth per sale, a business can achieve more with less. This relies on the business adjusting what it sells such that the GP% achieved in each basket is higher than the previous average for the business.
If you grow business GP% by, say, 3% and overall revenue by 1% the bottom line benefit to the business would be considerably magnified compared to no change in GP% and 1% revenue growth.
Retailers can think of GP% growth being achieved by buying better, which, for sure, is true. Often, there are opportunities for a small increase when pricing items to build in better margin. Knowing what you can sell a product for is valuable, especially if that figure is higher than what you have traditionally sold the product for,
The other opportunity here is stock turn. Working inventory to turn faster is a terrific bottom line benefit.
There are many growth opportunities in indie retail channels, many opportunities to achieve good growth in revenue and in gross profit percentage performance.
How do we achieve that?
Look at your current sales data, look for green shoots, indicators of opportunity for you. In a retail newsagency these are typically in cards, magazines and stationery. Sales in these departments can indicate opportunities outside of them, maybe in new areas for the business, better margin areas for the business.
The reality is that there will be more tough economic news and negative reports about retail. You can choose to watch that and worry, or you can create the retail experience that is an oasis of happiness, a place locals enjoy and are happy to spend. Every day, choices you make in your business determine this.
If you do what you’ve done every day for years, your results will be what you are used to. I think indie retailers can do much better than that.
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