Retail Trick: How to Boost Revenue
The retail world's biggest challenge is the calendar. No matter what your business, you probably know that the period between "Black Friday" (the day after Thanksgiving) and Christmas Day is a retailer's most important sales window.
So how can retail businesses redistribute their revenue spikes? During the annual shareholder's meeting for Berkshire Hathaway, held earlier this month in Omaha, I spoke with Adrienne Fay, director of marketing and advertising for Borsheim's–a Berkshire-owned jeweler and one of the most successful single-location jewelry stores in the U.S.
She passed along some of the insights that have helped Borsheim's create a "second Christmas"–a separate sales spike that comes alongside the annual Berkshire meeting.
Leverage real-world events. Go beyond spring or fall sales: Annual festivals, sporting events and celebrations can all bring people (read: shoppers) together. Omaha has the Berkshire Hathaway meeting; Louisville, Kentucky, has the Derby; Indianapolis has the Indy 500, and Lincoln, Nebraska, has every Cornhuskers home game. These special events boost normal traffic for short windows. Use those other events as your springboards for maximizing retail revenues.
Get your staffing right. Borsheim's figured out early that even a few minutes of extra waiting for service or checkout had a big impact on total revenues. Make sure you are staffed for speed; your customer's buying attention is a precious commodity. Don't be "penny wise and pound foolish" by not having enough staff on hand.
Plan for security. People need to be safe, with environments controlled and your inventory secure. Make certain you have planned for the safety of people and assets.
Watch the weather. Events are strongly impacted by weather. Make certain you don't leave everything up to luck: Have outdoor tents and space for people to be inside during bad weather moments.
Create comforts. Monitor the temperature and crowds, and be sure you can provide food, drink, and restrooms. Details matter; you want to encourage people to take their time.
Be creative. Sales prices and promotions may not be enough to keep people on site, so think theatrically to get people to stay longer and return frequently. At Borsheim's, Warren Buffett himself plays ping-pong in the store against an Olympic champion. Be creative to pull the attention from the event itself to the shopping event.
Plan carefully. To smooth out the rough spots in the retail calendar, build your annual plan around these secondary sales opportunities. If you build a very active model for maximizing each event, you can change your revenue trajectory.
Fay told me that Borsheim's "second Christmas" is bigger than their regular Christmas selling season. That is unheard of in the jewelry business.
After having seen the event, however, it is easy to see why that is true–because the company designs it that way, with every detail buttoned down to make the event a retail revenue maximizer.