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    3 Replies Latest reply on Mar 23, 2013 9:49 AM by Moderator Melinda

    Where To Look First When Sales Are WAY Down?

    norcalbizowner Wayfarer

      I know you can't tell me EVERYTHING to look at, but I hope you can give me suggestions on where to look first / what to do first.

       

      We have three retail clothing stores in the San Francisco Bay Area plus an online ecommerce site.

       

      Two of the stores seem to be holding their own. One store was down 23% in year 2012 compared to sales from 2010 (I don't have the full figures from 2011 due to a computer problem).

       

      If I compare the critical 4th quarter of 2012 with 4th quarter 2011, sales were down approximately 35% at this store.

       

      This branch has been in the same downtown location for approximately seven years. We have about two years and four months left on the lease.

       

      This store is in the most affluent town. Even during the great recession period from 2009 to mid 2012, the median home price was around $610K. Over the last few months, with the recent pickup in home prices, it has neared $650K.


      The downtown area where our store is located has, unfortunately, gotten grittier. There has been an increase in homeless people in the area.

       

      The downtown area has a mix of businesses. There are a few nationwide banks, a couple of smaller independent banks, the obligatory starbucks coffee, so office buildings and professional offices, lots of smaller cafes / independent coffee shops. Lots of salons, but only a few other clothing boutiques in the area.

       

      Aside from the fact that the sales are way down, there are LOTS of troubling signs for me:

       

      1) Despite being around for seven years, people often ask: "Are you a new store?" Usually, the people who ask are locals, and when I (patiently) explain to them we have been around seven years, they often say something like, "Oh, I guess I don't come downtown all that often..."

       

      2) People ask if we are a thrift store / second hand store

       

      3) People ask for discounts on the merchandise (this really only happens at this one branch - we don't have that problem at our other branches)

       

      4) People get us confused with one of the other stores in the neighborhood ("Oh, I thought I was in XYZ store. Sorry...")

       

      5) People passing by the storefront see something in the window, stick their head in (without actually coming into the store), and yell out, "How much is that dress / pants / shirt in the window?" After I tell them the price, they usually just keep on walking (Or they say, "I'll be back" and never return - or they ask for a discount!)

       

      6) The customers who are usually big spenders are from out of town, or from out of state, or from out of the country. Most of the locals spend much less.

       

      7) I try to be friendly with our customers. I will often ask them what other places they like to shop at, they usually reply with, A) I don't really do much clothes shopping, or B) Target (or another discount big box store), or C) Goodwill / other thrift / second hand store.

       

      8) We do get a lot of lookie loos. Sometimes people will try on something and they will look GREAT in it (I am being serious here). Their friends who came shopping with them will tell them they look great in it. Then they say, "I'm gonna' think about it."

       

      9) The average age of people who come walk in and browse at this location is SIGNIFICANTLY higher than the people who walk by and browse at out other location. I would say most of the people who walk by are 55+

       

      ~~~~~

       

      Reading over what I have written it seems like we have problems both internally (with poor branding) and also problems externally with the demographic of people who shop in this neighborhood.

       

      Again, I know you can't provide ALL the answers, but I hope you can suggest what to look at first.

       

      Thanks in advance.

        • Re: Where To Look First When Sales Are WAY Down?
          Guide

          Hi Norcalbizowner,

           

          The first thought that crossed my mind when I began to read your post was lack of advertising. It seemed that the locals don't even know you are there. I would definitely start with your advertising plan.

           

          Demographics plays a very large part of how well a business will do. Your location seems to be prime, but it might be who you are catering to. You mentioned that most of the people in the area seem to be from ages 55 or older. Could it be that your merchandise is catering to a younger crowd? Maybe add more merchandise that an older crowd would appreciate.

           

          My last thought was how your store maybe organized. Why are people thinking that your store is a second hand or thrift shop? What impression does your store give when you walk through the front door?  Maybe the store can use a redesign and a fresh coat of paint with brighter colors?

           

          Hope this was helpful. Good luck!

           

          Melinda

            • Re: Where To Look First When Sales Are WAY Down?
              norcalbizowner Wayfarer

              Thanks so much for taking the time to reply, Melinda:

               

              I hope you don't mind me starting with the last question first:

               

              "My last thought was how your store maybe organized. Why are people thinking that your store is a second hand or thrift shop?"

               

              We do need to reorganize the store. It is something of a mess and in my opinion sends mixed signals about who we are and what we sell.

               

              I think the main reason for that is because even after all these years, we still haven't identified our demographic / market.

               

              I would have to say that the boss - my wife - has a sort of "shotgun" approach to buying; she just buys one of everything and hopes it sells. If it sells well, she buys more. If it doesn't sell , then it sits on the shelves (or in the stockroom) for years.

               

              "The first thought that crossed my mind when I began to read your post was lack of advertising. It seemed that the locals don't even know you are there. I would definitely start with your advertising plan."


              I would have to agree with you on this. Because we don't really have a defined market / niche / demographic, we don't do any advertising (I am guessing it is because we don"t know where to advertise and to whom).

               

              "Your location seems to be prime, but it might be who you are catering to. You mentioned that most of the people in the area seem to be from ages 55 or older."

               

              Hmm... I don't really think of the location as prime. It seems like the downtown area where we are located has gotten dirtier over the last few years (and crime HAS increased) and there are less and less people coming downtown.

               

              I have spoken with our local UPS Delivery driver, and he has confirmed that he is making less and less shipments to merchants in downtown. He said they used to have three drivers whose routes overlapped, but now they are just down to him.

               

              So since merchants are ordering less merchandise, then it's a pretty safe bet that we aren't the only ones selling less and less.

               

              The majority of the people who walk by (who are over 55) don't look like they have bought new clothes in the last ten years. They are hardly slaves to fashion.

               

              When younger, more affluent people walk by, they don't even seem to look at the window display. It's like we don't even exist to them.

               

              I don't know... Feeling pretty discouraged.

                • Re: Where To Look First When Sales Are WAY Down?
                  Guide

                  Hi Norcalbizowner,

                   

                  Don't be discouraged. Just try some new things out and see what happens. You do not have to spend a fortune on reorganizing or advertising. I would definitely start with the reorganization. You will see just how successful that is by your customers reaction the minute they open that door.

                   

                  There are many places to advertise and it will cost you next to nothing. I would start with flyers. When you have time, take a leisurely stroll and distribute them on cars, in mail boxes, hang them on door knobs, and make sure you don't leave out the office buildings in the area.

                   

                  Hope this helps. Good luck!

                   

                  Melinda