There may not be flags and fireworks, but this week there’s another holiday going on: Independents Week. And if you patronize a local mom-and-pop business, you are helping celebrate it whether you know it or not. The event is the creation of the American Independence Business Alliance, which is affiliated with the recently launched Princeton Independent Business Alliance.
The purpose of Independents Week is to promote small business and the entrepreneurial spirit. The alliance, which is part of the Princeton Regional Chamber of Commerce, held a launch breakfast on June 20.
The alliance will work to spur local consumers to shop at local stores, and encourage local businesses to network and cooperate wherever possible. The alliance is also partnering with the One Princeton Card, which acts as a common reward card for Princeton-area businesses.
But what about the other side of the coin? What can local businesses do to attract those elusive local customers? For many retailers, the holidays are the key. And here’s the thing about the holiday season: It always happens at the same time of year.
And yet, despite that this is no surprise, a lot of retailers ignore their preparations for the season until summer’s over.
But consider the fact that for most retailers, 40 percent of their annual income happens between Thanksgiving and New Year’s Eve. And so little of it happens between Martin Luther King Jr. day and the first day of spring. Shouldn’t this, asks retail and restaurant consultant Marc Willson, president of the Willson Company in Leesburg, Virginia, be enough to convince merchants to prepare at the beginning of summer for the shopping juggernaut that is December?
Willson recently presented a seminar on preparing to manage the end-of-year season at Main Street Highland Park, which is another organization dedicated to encouraging local shopping habits.
The Willson Company began in 1867 by General Lester S. Willson as a mercantile company in Bozeman, Montana. The company stayed in the family and was resurrected in 1990 by Lester S. Willson III as a consulting firm serving major regional shopping cente`rs and specialty clients. Marc re-established the company in 2010 to serve as a business advisor to America’s small towns and merchants.
Willson was actually a biology major at the University of Delaware in the 1970s when his brother (a master’s student in Washington, D.C.) ran into the man who owned the first capital area dealership in Earth Shoes. Willson’s brother asked him to help him and the dealer open a second store for the shoes, which, in line with the ’70s back-to-nature movement, were all the rage. Willson agreed, and the brothers “lived the high life for a couple years” as the Dutch shoe company made a mint on its enterprise.
Then, of course, Earth Shoes went belly up, which would have been bad enough. But in the effort to expand the business, Willson and crew had signed five 10-year leases for primo mall space, leaving both brothers on the hook for years. Eventually, Willson got together with the founder of Britches of Georgetown, an upscale clothing retailer outside the capital complex. Willson joined the chain when it had nine stores and helped build it so that when he left, there were 109 stores. Willson later took over the Willson Company, where he often lectures on the importance of being prepared as a retailer.
It’s getting late. To the retailers of the world, Willson has this to say: “Most of what is to be bought for the holiday season should be bought already.” If it’s not, start ordering now. Vendors work on long lead times.
Willson acknowledges that many smaller retailers worry about storing inventory until the cold weather comes back. A lot of smart vendors, however, offer “just-in-time” inventory these days. Like print-on-demand books, just-in-time inventory is merchandise that vendors do not have on hand until it’s ready to ship, and is only ordered or made in the amount retailers order from them. The vendors allow stores to order now and pay once the holiday shopping season kicks off and the real money starts coming in. “No one wants to hold inventory,” Willson says. “It ties up cash and small businesses don’t have that kind of cash flow.”
Shopping local. Chambers of commerce and other community/business organizations are good at promoting the idea of shopping locally, Willson says. But merchants need to be more vocal about it, because “leakage” is a real and potentially damaging thing.
Leakage refers to any money that migrates out of a town or area. For example, if you shop at a small retailer in your town, 69 percent of that money stays in town, “and that money’s spent in town over and over,” Willson says. But take that dollar to the Walmart in your town and 79 cents of it goes straight to Bentonville, Arkansas.
Much of the rest of it goes to China and very little of it stays in town to cover salaries and other on-location expenses. So Willson’s question is, “Do you want to give another vacation to the Waltons or build a school?”
In-store edu-tainment. You may have heard of Internet shopping. And no matter how you slice it, the dynamic of shopping these days comes down to this: With few exceptions, no one needs to go into a store to buy anything anymore. People can sit around in their undies and buy stuff while they’re binging on Netflix.
And even if people are coming to your store, nine out of ten will shop around online first, reading up on the exact products they want, and poring over your virtual storefront window to see what kind of store/deals/prices you offer.
For physical stores, this means the new dynamic is one of education and entertainment, Willson says. Store managers and owners need to accept this. They need to train their sales associates on the merchandise they sell and to make sure these associates do everything they can to make the customer believe that the extra money they will spend by coming into your establishment is worth more than the price break they will get by shopping online. People, after all, are still social creatures in the Internet Age. They like to know they are important and that the sales staff is there not just to make money, but to help them find what they want and need.
Back in his days with Britches, Willson and his colleagues would routinely steer customers to other Georgetown shops that carried what they knew their own store did not. In fact, Willson says, Britches associates would often head over to the competitor’s store, buy the item themselves, and bring it back so that the customer would not have to go anywhere. “You lose money on that sale, but you gain a customer for life,” he says.
It’s wise to remember, too, how educated customers are these days. People don’t walk into a store thinking they need a vacuum cleaner, they research the best one in their price range and walk in asking for specific makes and models at specific prices, because that’s what they saw it advertised for on a competitor’s website, Willson says.
Training your employees and hiring the best ones with the best attitudes is key to standing out in the crowd these days. “You’re only as good as the part time employee who works the least hours,” Willson says.
Remember the 80/20 principles. The old sales and marketing chestnut avers that 80 percent of your business, no matter what kind of business, comes from 20 percent of your customers. But there’s another side to this, Willson says. Eighty percent of your sales come from 20 percent of your products.
Successful retail outlets know which items comprise that 20 percent and work to bolster it. A lot of stores throw tons of products at the consumer and don’t pay attention to what sticks where. If you know who your core 20 percent customers are and what 20 percent they are buying, you will run a more efficient operation that makes better money, Willson says.
The underlying message here is that successful stores prepare early and know how to take care of their customers. Simple acts like learning and understanding lead time for ordering holiday merchandise can cut down the chaos when October hits. And great customer service will keep the doors open, especially in the age of social media.
“There was a saying that customers would tell three friends if they had a good experience and 10 people if they had a bad one,” Willson says. Now, on sites like Yelp! or Twitter, “they’ll tell three friends if they had a good experience and 10,000 if they had a bad one.”