Business Cents 2: capturing missed opportunities
BOWMANVILLE, Ontario – Determining what you want to be is perhaps the most critical decision a retailer can make, especially if he or she is an independent, brick-and-mortar store owner. That’s where Episode Two of HGO.tv’s Business Cents, a conversation with Albert Marrache, begins. Overhead is expensive, starting with the cost of occupancy. It only gets worse from there.
“If you think you can be everything to everybody, the answer is ‘no’, you’re not going to be,” is how the president of added-value resource Phoenix AMD International, kicks-off the conversation with HGO publisher Michael Knell.
Episode Two is themed: Recognizing Missed Opportunities of the Past and How to Capture Them Moving Forward. Click here to view.
Compared to brick-and-mortar, the ‘pure play’ e-commerce players considerably smaller demands on their overhead. “They don’t have to worry about how their location looks,” Marrache points out. “All they have to do is their software needs to look like it’s great.”
And, much of the time, they don’t even have to inventory or warehouse their goods – everything they sell is dropped shipped by the manufacturer or his distributor.
“If you’re the type of retailer who wants to really sell the cheapest price, you’re going to have an enormously difficult time,” he believes. “One of the things I understand from my own experience is I’m in business to make a profit, not to make sales. This is something a lot of people in our industry have lost sight of. It’s not about how much you sell, it’s about how much you make.
“At the end of the day, we need to start learning how to make better dollars from what we sell and that includes being able to figure out who is the right customer for the goods you have,” he continues, adding its also important to understand what kind of profit – in dollars, not margin percentage – those items are going to produce and whether its an assortment that will bring the customer back a second.
It’s also vital the independent brick-and-mortar store owner not to deceive themselves about the ability of the e-commerce to evolve and improve. For example, the cost to deliver of furniture and appliances to the customer’s home is quite high and currently the advantage here belongs to the local dealer. But that will change over time.
Throughout the discussion, Marrache returns to what has become his core message to retailers time and again: maximise the opportunity by working with the customer who’s in the store and ready to buy. Don’t sell just the upholstery suite. Present the lamps, the tables, the rugs and everything else that goes with it. Take control of the process; demand and train your salespeople to follow it every time they interact with the customer.
He also believes the store owner has to get out from behind his desk and get out on the floor and work with his sale teams. “I have to be out in the field with my sales reps,” Marrache says. “I have to understand what they’re going through. I also have to talk to my customers. At the same time, I have to make sure they are delivering the experience that needs to be delivered and I have to make sure sales are happening. Because if they aren’t doing the sales, then I’m not making the profit.”
He also notes profits can easily shrink, overhead costs not so much.
Each session of Business Cents also ends with some suggested reading – a book Albert recommends. In fact, the first 25 people send a question, comment or suggestion to Michael and Albert at [email protected] will get a free copy of that episode’s recommended book. (Please include your name, business affiliation and mailing address with postal code.)
The book for this episode is The Retail Revival, by Doug Stevens, the Toronto-based retail consultant, speaker and author. “A really very interesting read, in terms of how he sees retail being changed,” Marrache says. “I would always recommend it. It’s something I have reread two or three times because even though I’m not in retail, my customers are in retail so its very important to understand the changes that are going in the market.”