CategoryRetail management advice

The retiree (or seniors) marketplace can be lucrative for a local small business retail store. They tend to be loyal and engaged in word of mouth marketing about good retail experiences, experiences they value. They can also be flexible about when they shop and this is where a retail business can really leverage the opportunity.

Before you can market any retiree service or benefit you need offer what they want, offer what they value. Next, you need a plan. What products will be offered and at what special prices? The most common approach is to offer a flat discount to retirees, or seniors as they are called in some marketplaces. This discount is usually between 5% and 10%. Discounting is kind of lazy though.

Price is important to the seniors marketplace since they either have a fixed income or are living off finite savings.  They like businesses which help them save money. This is the value piece. It’s about value every day, every visit.

One option is to create your own retiree / seniors card, something like a club card, for use in promoting the business. These should be professionally designed and produced. Ensure that such a card is respectful and something these customers would proudly carry. Design the card so that it promotes the benefits you offer – so that it is an extension of your marketing program.

An approach we really like is partnering with local seniors organisations or retiree communities – helping members save and the group itself benefit. Mutual benefits like this – for individuals, a group and your shop – yes,  they are programs that work the best in nor experience. Plus, our POS software can manage this for you.

Local indie retailers, small business retailers, are well placed to connect with the retiree marketplace through these approaches. Where big businesses will tend to go the straight Seniors card discount route or similar, a more engaged and nuanced approach with a community benefit connection is more likely to drive a valuable Lebel of word of mouth.

Tower Systems provides this advice to local indie small business retailers because you are our community. We only engage with indie retailers. No big businesses. We want, and need, local indie retail to thrive.

To market a business to retirees consider these options:

1. Train employees to offer the discount or other benefits to someone who looks eligible. While this could cause embarrassment, it could also extend the word of mouth around the offer.
2. Promote to retirement villages in the local area.
3. Advise local government authorities that you offer a benefit to retirees.
4. Contact local clubs and organisations likely to connect with retirees.
5. Promote the benefits in-store and in your business newsletter. You want to spread your offer as far and wide as possible, so that retirees beat a path to your door.
6. Visit local retirement residences and offer assistance.
7. Advertise in trailer parks.
8. Look up clubs the Internet – there are plenty of groups, clubs and forums for older folks travelling around. They share tips about places they like.

The value of the retiree market to your retail store will depend on the value of the offer available to them and how widely you promote this. While some retailers see retirees as a chore others see a business opportunity.

In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.

Reeves defined USP in an advertising context:

1. Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
2. The proposition must be one that the competition either cannot or does not
3. The proposition must be so strong that it changes consumer behaviour.

In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.

Jack Trout told us just a few years ago that it was as relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die.

Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.

Yet many retailers, for the most part, have remained still in the face of an onslaught of competition.

Retail is tough, especially small business retail, local retail, indie retail. The differences between competitors are fewer – there is a lot of follow the leader / innovator. Retailers are surrounded by competition and it grows by the day. Yet many have copied others, and not done anything to stand out.

Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.

Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – Walmart for example. It is rare in an independent retail situation.

To develop your USP, engage with your employees and other stakeholders. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.

A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.

While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.

Our Tower Systems POS software offers opportunities to be unique, easy and quick ways through which any retail business can present as being unique. We help retailers stand out, be noticed, be remembered, and be more successful.

We were recently asked to write an article for a magazine for Aussie newsagents about selling online. The advice we included in that article for local retail newsagents applies equally to any local retailer. We share the article we wrote here to offer advice for local small business retailers contemplating selling online:

Sell online, but not as your shop today.

When people shop online they shop for an outcome. They search for the product or purpose. They do not search for a masthead.

This is a valuable insight for any newsagent considering a website for their business for putting your newsagency online with what you sell today could be an expensive mistake.

Tower Systems has built many websites for newsagents and most are not sites that represent the newsagency shop online. Rather, they present as a different business, focussed on a niche category and leveraging the shop infrastructure to help the business expand.

This is the smart move for any retailer selling online – using it as a start-up opportunity that makes use of space and labour in the shop but not relying on products in the shop.

In one case, a newsagency business has grown online to where it is more financially valuable than the shop within which it was incubated.

In another case a newsagent tested a category online, hit gold and expanded the shop to offer this, hitting more gold.

Engaging with Tower Systems to create a POS software connected website provides newsagents with access to comprehensive online sales data through deep Google results research. This can help newsagents discover opportunities not previously on their radar.

By tapping into current keyword search data using respected commercial tools, Tower Systems is able to show newsagents pathway opportunities into new product areas online. These can be opportunities tapped into with a minimal capital investment, an opportunity for expansion with a modest budget.

While I understand the push to take the shop online, in my years of experience owning newsagencies and running successful and failed websites connected to the shops, my advice is to leverage the website opportunity as if it is a start-up, playing in a space you have not played in before, with the goal of it leading you on a path of discovery.

Tower Systems is better placed to support this greenfield approach than a local web developer … we have found local web developers more likely to replicate online what you have in. the shop and that, my friends, is unlikely to attract for you the volume of new shoppers you might hope for.

Being online is critical for every business. Doing it right, in an approach appropriate for 2022 and beyond is key.

Take your time. Do your research. Make sure that what you choose can be maintained by you. And, only sign for a fixed price website build.

Talk to any retailer and they will tell you cash flow is tight.

In this short video we leverage our experience helping many different local retailers on ways to improve cash flow.

It’s free advice from our POS software company, Tower Systems, part of a broader kit of free advice all Tower Systems customers can access to broaden the appeal of their businesses.

Cash flow is on the minds of many local small business retailers right now.

But before we get into providing advice, let’s agree a definition. Cash flow is the flow of money in and out of your business, real cash, in your account, or in your safe. Cash in comes from sales or products and assets and other payments from customers and suppliers. Cash flowing out is for bills, inventory purchases, labour and rent, typically.

Any business wants to be in a positive cash flow situation, because negative cash flow needs more capital inflow to support, and that can come at a cost.

Now, to our advice.

8 ways any local small retail business can improve cash flow and thrive.

Are you ready?! This advice is based on our years of service of thousands of local small business retailers across a range of specialty retail channels. It also comes from many years of us owning and running our own local retail shops.

1. Free dead stock. In our experiences this releases the most cash flow value, but it is the option most often rejected for often silly reasons. dead stock is stock that is not selling, not moving. It is often stock you have long since paid for. This means that any money you get for it is positive cash flow right now. The loss from paying for the stock has already been realised – many retailers forget that. So, idea tidy what’s not selling, and quit it creatively, with urgency. Cheer every dollar this brings.
2. Trim where you can without impacting sales. The most beneficial move here is typically a cut in the roster, a cut in labour cost. Save a few dollars with no sales revenue impact and you are ahead cash flow wise.
3. Get shoppers to spend more in a visit. Smart loyalty software will do this. Points loyalty systems are unlikely to do this. There are better loyalty options designed to help encourage shoppers to spend more in a visit. Our POS software helps nurture this.
4. Charge more. Yes, we understand this can be scary. The thing is, if you do this carefully, thoughtfully, and offer a good loyalty incentive and bundle items together, a modest price rise is less likely to be noticed and more likely to have a positive impact on cash flow. Think about it. Plan for it. Take small steps. A 1% rise across your top 200 inventory items could be the small step that delivers the cash flow boost you need.
5. Find more customers. The more new customers you have shopping with you the more you will sell, obviously. It can feel easier said than done to attract new customers. In our experience, most local retail businesses do not have a new customer attraction plan. Do you? It does not need to be complex. Even a simple social media pitch honouring a new product, reflecting your gratefulness to have it could be enough. One the post is up, pay for a boost in your area. An $8 spend over 4 days is all you may need to get in front of a few hundred prospective new customers … and that gets you on the path, that could be your new customer attraction plan.
6. Trim overheads. Look through your business overheads and look for an opportunity to trim.
7. Look at your sales counter. With most purchases being completed at the sales counter, look at it from the perspective of your shoppers and see what you could do to encourage them to add items at the last minute. The counter is a valuable place of influence. Use it. Make sure it is driving deeper purchase baskets, and adding to cash flow.
8. Spend less on inventory. Look for suppliers with good inventory holdings that allow you to use them, rather than your shop floor or store room, to hold stock you may not sell right away.

This list is a start, a small start, a modest start, it offers practical advice you can follow, practical steps you can take in any local small business retail setting to improve cash flow.

Using the Tower Systems POS software you can engage with any of these and other ideas for improving cash flow in your retail business.

Beyond POS software, Tower Systems will help, because we want local retailers to thrive. You are our customers, our focus.

Footnote. Many retail business owners get in their head about cash flow, they look for big moves and end up spinning their wheels, going nowhere. In reality, the most beneficial cash flow improvement moves you can make are those that are simple, easy ti implement, immediate to implement and, most important, that work with other moves … for it is the compounding benefit of a series of small steps that can deliver excellent cash flow improvement benefits to local small business retail.

Here is another in our series of retail management advice based on our decades of service to local small business retailers using our Tower Systems POS software:

How to calculate gross profit by floorspace and how to use this information

With retail space usually costing between 11% and 15% of (non agency) revenue, it is usually the next highest cost outside of the cost of stock itself.

Spend half an hour on what we suggest here and the result could provide clarity on immediate steps you can take in your business to improve what you make.

This is not advice you will get from your accountant or from reviewing your P&L or computer reports. It is designed to be practically helpful in managing your business.

Please follow these simple steps.

1. Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, wall shelving, the counter – everywhere you have product.
2. The floor plan layout should also include your back room if you have stock there.
3. Colour-shade the layout by department. For example, shade all areas with magazines in yellow, all floor space for gifts in blue etc.
4. List the departments on the side of the floor plan.
5. Calculate the percentage of total space taken by each department. This does not need to be accurate to two decimal places. List this next to each department you have listed.
6. Use your computer system to report on gross profit dollars earned by each department over the last year.
7. Calculate the percentage of total gross profit contribution earned by each department and list this next to the floor space allocated to each department – on the floor plan map you have done.
8. Circle in green those performing the best and in red those performing the worst. A best performing department will typically be responsible for a significantly higher percentage of gross profit than percentage of space allocated whereas a worst performing department will be contributing a percentage of overall gross profit considerably lower than the percentage of floor space allocated.

Once you have the marked-up floor plan with the space percentage and percentage of total gross profit, think about your floor space allocation.

The above steps do not take into account product size and the average gross profit percentage from each dollar of revenue for a department. For example, ink is a lower margin product than stationery, gifts are a higher margin magazines. Typically, the analysis will highlight challenges with lower margin product.

Here are actions the work you do could lead to:

1. Changing the location of a department within the business.
2. Increasing floor space for a department.
3. Decreasing floor space for a department.
4. Working on improving the GP achieved for a department through better buying.
5. Working in increasing sales for a department to lift the overall GP dollar contribution achieved.

You can take the analysis a step further by looking only at one department and analysing performance by category, using the method outlined above.

For example, in one business we saw pens taking 7% of stationery space while they contributed more than 40% of gross profit earned from all stationery.

The type of analysis we are suggesting here is intended to give you a fresh view of your business as you engage in the process of constant change.