The 1990s have brought dramatic changes to the retail industry, led by the emergence of national discounters. The top problem facing "Main Street" retailers is maintaining their bottom-line profits. In today's competitive environment, with skyrocketing expenses and stagnant revenues, even well-managed retailers are caught between an inventory surplus and cash flow squeeze.

Many small retailers feel at a loss when it comes to promotion and marketing, and may even feel that it's a waste of money to pay attention to marketing efforts. But there are sales-building techniques that work. They can power up your business and wake up your customers.

There are three basic ways to increase your sales and make your business grow:

  • You can find new customers
  • You can increase your average sales transaction
  • You can give customers more opportunities to buy more frequently from your business

Improving any one of these three categories will boost your sales. But the moment you decide that you're going to systematically improve all three categories, you'll automatically catapult your business.

The purpose of any business is to bring in customers, and that can only be accomplished through marketing. The most important survival skill is to be able to anticipate change and identify new opportunities. Small stores can fight back by updating their customer lists and business strategies--refocusing on items, price, and efficiency--and by countering with in-store celebrations, glamour and fun. A successful "Big Volume Sale" is the fastest and easiest way you can boost your sales, win customers back, and raise a large sum of money (from your current inventory) in a short period of time.

So how do you put on a successful sale? The most important requirement is to have a systematic marketing plan. The elements of the plan are detailed: click on each of the subjects below for more information.

  1. Proper Timing
  2. Acquiring Customers
  3. Merchandise Pricing
  4. Direct Mail
  5. Newspaper
  1. Radio and Television
  2. High Impact Signage
  3. Merchandising Techniques
  4. Inventory Recommendations

Basic money-making suggestions:Purchase only what you feel can be profitable and easy to sell. Don't bring in off-price items that have no meaning to your customers. Consider buying samples from sales representatives. They'll usually sell them for 40% to 50% off the wholesale price.
Never be afraid to step out of the box and try something new and different.Whatever your product or service, people won't come to you unless you offerthem something they want. You must have good reason for them to come--the morevaluable or unique your offer is, the more customers will respond. Remember,the success of a "Big Volume Sale" will be in direct proportion to the strengthof your business.

In retailing, the trick is to know your competition; your customers certainlydo, even if you don't. To survive and prosper in today's competitive markets,small retailers must develop more efficient operational and marketingstrategies. Stores wedded to the old ways of doing things are almost sure tofail.

Finally, you should never hesitate to hire a professional for any of yourbusiness needs. Whether it be a freelance artist for a newspaper ad or yourdirect mail, or an advertising agency that can design logos to make yourbusiness more distinctive, an experienced voice can make a big difference.

For more about how small retailers are working to professionalize themselves,read "The New and ImprovedAmerican Small Business" from the January, 1995 issue of Inc.magazine. Tom Ehrenfeld's expansive article profiles the transformation ofHarry W. Schwartz Bookshops in its adoption of nearly every tactic big businesshas brought to the once-quaint bookstore industry. Included in the story: thefive attributes that set professionalized small businesses apart. Also take alook at Ed Welles' story "WhenWal-Mart Comes to Town" (July, 1993) profiling one small town's response tothe arrival of a superstore.

Proper Timing

Focus on the best months for in-store traffic. Below are average response rates based on hundreds of sales over a period of years. You can hold a sale any time of the month or year, however, some months have proven to be better than others.

Response rates for producing in-store traffic:

January February March April May June
Excellent Good Good Good Good Poor

July August September October November December
Poor Fair Good Excellent Excellent Excellent

Once you decide when to start your sale, you should allow 3 to 4 weeks for preparation. With careful planning and follow-through, you will be able to insure higher profits by deciding the correct timing, preparing the advertising, and balancing your inventory to ensure a profitable turnover from start to finish.

Back to top

Acquiring Customers

Get off to the right start. The most important thing you can do to create a successful sale is to develop your customer mailing list. Some simple methods:

  • Ask every shopper who comes into your store to fill out a preferred customer card so you can update your mailing list. Even if they don't make a purchase, they are potential customers
  • Acquire membership lists of local organizations, clubs, and churches. (If you don't belong, ask employees or customers.)
  • Copy names and addresses from customers' checks.
  • Purchase qualified names from mailing list companies. These companies include American List Counsel (1-800-822-LIST) and Edith Roman Assoc. (1-800-223-2194)

Experience shows that retailers who have up-to-date customer mailing lists receive the best results. It is better to have 500 to 2,000 qualified names rather than 5,000 to 10,000 non-qualified names.

Back to top

Merchandise Pricing

Your markdowns are critical to the profitability of your sales campaign. If the majority of your merchandise is current and in season, only a small percentage of your stock needs to be marked down more than 25% - 30%.

General Guideline for Pricing Seasonal Merchandise:

1 to 4 months old (in season) 25% - 30% off
5 to 7 months old (out of season) 30% - 50% off
7 months and older (oldest merchandise) 50% - 75% off

Your main concern is to turn your inventory into cash. While there are many ingredients for successful retailing, price is probably the most important influence on consumer buying, and you will sell your merchandise in direct proportion to the savings you pass on to your customers. Merchandise is not like fine wine; it does not get better with age. Be aggressive when pricing slow-moving merchandise.

Back to top

Direct mail

If you want to boost sales while you drive down costs, you should be using direct mail. Direct mail is one of the most targeted, measurable, and cost-effective ways to sell your products and services.

You deliver your message directly into the hands of a specific individual.You never have to guess about the results. When you track your responses, you build an information base of good customers that have demonstrated a need for your products or services. You control your marketing efforts by assuring that your message will be received by the right person at the right time.

By sending your customers special sale announcements, you are creating new opportunities for your customers to buy. You've told them they're special, you're assisting them to re-start their buying relationship with you, and you're presenting them with more opportunities to buy.

To receive optimal response from your mailer, consider the appeal of your message, its sense of urgency, and of course, the quality and size of your mailing list. Your mailer should be distinctive and directed to a qualified, selected audience.

It is important to mail the sale announcements First-Class. Bulk mail may cost less, but it is not reliable and may not get to the customer in time. Timing is everything.

Direct Mail Is Cost Effective
At a cost of about 40 cents a letter (stamp, envelope, announcement), you'll spend around $400 on a First-Class letter mailing to 1,000 names. If 2% respond and make an average purchase of $20, you'll gross $400 -- the amount of your marketing outlay.

Back to top

Newspaper

This is a valuable medium for your sale campaign. Ads can be placed and changed on relatively short notice allowing you to design a last-minute ad as your sale goes through its different phases. You can adjust percentages, stock selection, and other special points as the sale procedes.

Based on responses from most communities, Sunday is the best day to advertise, followed by Tuesday and Friday. Sundays have the highest readership because people are relaxed and have extra time. Tuesday is normally a slow day, giving ads more prominence. Friday is also good because consumers are planning weekend activities, home improvements, and shopping activities.

When you contact a newspaper, be prepared to give the ad department the following information:

  • Your store logo and address
  • The type of sale
  • Starting date of sale
  • Categories offered
  • Markdown percentages

An effective ad is hard-hitting and easily recognizable. It should have a dominant headline, use white space well, clearly state percentages or range of prices, and create customer urgency.

A good ad can run over and over again, until you become bored with it. It can also be reprinted and used as fliers, hand-outs, mailers or even enlarged and used as a poster. Your ad may be entertaining, it may be informative, and it may keep your name before the public, but its primary purpose is to bring customers into your store. Remember, the objective of your advertising is to sell!

Back to top

Radio and Television

Radio and television gives you flexibility, the ability to do target marketing, and the opportunity to provide an "Act Now" urgency.

To write a great script, you should:

  • Mention your store name at least three times
  • Make the message urgent
  • Offer a bargain
  • Develop a slogan
  • Describe your merchandise
  • Don't use too many words

Check the stations for rates according to time slot, and compare the stations' demographics with your customer profile.

Back to top

High-Impact Signage

The purpose of your SALE signs is to attract attention and convey the feeling of an exciting and vibrant sale event from start to finish. The more signs you use, the more your store will appear to be different and attract new customers.

Your signs should be attention-getting and to the point.

Signs are an important part of the customers' perception of values. They can significantly change your store image, enhance the values of your merchandise, and increase the average sale transaction.

Back to top

Merchandising Techniques

When arranging your store for the sale event, pay attention to details:

  • For the duration of your sale, watch for slow-moving categories.
  • Change the displays and take immediate markdowns if there seems to be little interest in a particular area.
  • All merchandise must be made accessible for the customers to see, touch, and smell if necessary. Items behind the counter are difficult to sell.
  • Arrange your merchandise by size and categories. It is important that customers can easily find their size without wasting time.
  • Don't make customers play the stupid retail game "find the price" on each and every sales tag. Similarly, don't have two or three price tags wrapped together showing different prices.

Throughout the sale it is important that customers do not think the "best" items have already been sold. All racks and display fixtures must always appear to be as full as possible. Put any empty racks into storage areas.

Be creative. The greater the hype and selection, the more customers will pay for your goods. Keep moving stock toward the front to make it more convenient for customers to buy.

Back to top

Inventory Recommendations

If you need to buy additional merchandise for the sale, keep this in mind: the first week will have the largest customer impact. These are the "Big Volume Days," so be sure your store is fully stocked for the opening.

While still in-season, off-price merchandise can be in high demand. Don't expect your suppliers to volunteer it; you'll have to ask what they have. If you drop the hint that you have an open-to-buy for immediate goods, you will probably discover some desirable merchandise.

Back to top

Bob Nelson is the president of Power Retailing, (1-800-399-1980), a professional retail consulting service in Phoenix. The company works with small- to medium-size retailers who have seen mass merchandisers enter their communities, and his area of specialization is the apparel business. As a "retail survival consultant," Nelson works with stores to generate more traffic and a higher volume of sales.