J.D. Associates Retail POS Solutions Blog

"Recipe" for Retail Success?

David LaLiberte has a winning recipe created from scratch:  a cupcake bakery. 

David's little sweet treats not only look beautiful, but taste amazingly delicious (says his POS software trainer, Dave Kelley at J. D. Associates) and are almost recession-proof.  You can purchase (and eat) a feel-good item, without spending a lot of money. 

And, I've read that cupcakes are the new wedding cake!

'Treat's' phenomenal, early success,says David LaLiberte, the owner of the newly opened Treat Cupcake Bar in Needham, MA is due to lots of hard work, connecting with experts like: Retail Concepts, who worked with David for about 1.5 years in preparation for his opening; or for store layout he hired C & J Katz design; for his logo and packaging he hired the 47th; to handle the marketing of his business he hired Marlo Marketing/Communications.

It takes a village of experts to help a business succeed.  Did I mention he hired J.D. Associates to implement his point of sale inventory software?

 

To read more about David's secrets of success, subscribe to the Retail Source, and check out the August 18th issue and read his words verbatim.

To read about David's success, excerpted from the Boston Globe July 31st issue, click here:  Treat Cupcake Bar story

The Return of the Layaway

The layaway concept dates back to the Great Depression when retailers gave customers a chance to buy items they would not have been able to afford otherwise. Kmart has had a  layaway program for more than forty years.  It was available to customers the day the store opened its doors for business or soon thereafter. I suspect it's been a profit center.

Here's a short list of national retailers who currently offer layaways (some multi-store retailers offer layaway, but only in selected stores, strangely enough): Sears, Kmart, Toys R Us, Best Buy, T.J. Maxx, Fashion Bug, Victoria's Secret, Kay Jewelers, Walmart (did away with layaway in 2006, but some stores offer jewelry layaway), Burlington Coat Factory, Marshalls and AJ Wright.

Have you considered a layaway program for your store? Surprisingly some high-end women's shops have a layaway program; it's an opportunity for their shoppers to make a major purchase without worrying if that 'must-have' item will be out-of-stock when they have the cash to buy it.  It's also an easy way to grab popular gifts.  Layaway is making a comeback and the reasons make sense.

The consumer is becoming more grounded, thinking more about planning and budgeting than before the economic slowdown. Many are realizing that credit card companies are making lots of money on their late payments; putting stuff on credit cards is falling out of fashion.

Creating a layaway plan can be the best service your store offers, but there are a few things to think about:

1. Make sure your retail POS system can track those committed items so you have them in stock when your customers pick up their layaway. 
2. Get a deposit.  A percentage of the purchase price is often charged.
3. Make sure you have terms (30, 60 or 90 days) with payments every week or bi-weekly.
4. Are there restrictions on what can be placed on layaway? Put everything in writing--it's your 'layaway agreement'--and it'll be clear to you, your staff and the consumer.
5. Will you charge a non-refundable service fee? 
6. If they change the layaway in any way, a 'cancellation fee' can be charged.
7. No cash refunds should be given. Any returns should be converted to a gift card or store credit.  Whatever you do, it should be easily tracked.  That happens most effectively through a retail POS solution.
8. If you sell fine jewelry, you may want to extend the terms as the items are far more expensive than most average inventory. 
   
9. If you offer layaway as a convenience to your customers, promote it thought in-store signage. You might also want to promote it on high-ticket items.

There are lots of consumers out there who consider themselves frugal and they love layaway; it's now very trendy to be thinking of your finances compared to just a few years ago when we were credit-card crazed. Make layaway into another twin-win situation.  If you have your layaway program well-thought-out and in writing so there are no surprises--and you're willing to provide the administration necessary--a layaway program will give your customers what they want and need and, you'll make sales.

If you're a Microsoft Dynamics RMS or POS 2009 or Retail Pro user and want to know more about layaway, click here for some documentation on how to create a layaway in your retail POS. 

If you have more questions send an email to: support@jdapos.com

 

 

Do Customer Loyalty Programs Really Work? Part 2

To read Part I (1-3) of this blog article go to: http://blog.jdapos.com and scroll down.

4.   Is it easy for your best customers to make use of your loyalty program?  Grocery stores were one of the first retail vertical markets to offer customer loyalty cards.  The most common rewards in a grocery store are immediate discounts on selected items and “bounce-back” coupons good for discounts on future purchases.  When a major grocery store chain in the northeastern United States decided to offer a loyalty program, they issued keychain loyalty cards to all customers.  Well, God forbid that you should drive a different car one day and take the keychain that didn’t have the card because you were refused the loyalty discount.  This infuriated most customers and finally the store stopped requiring the physical presence of the card.  Customer loyalty is supposed to be a reward not a punishment. 

5.  Do you reinforce the value of being a rewards card holder?  Every time I make a purchase, I should be reminded of the benefits of being a loyal customer.  If it's an immediate savings, the sales associate should let me know how much I saved even if it's printed on the receipt.  If the reward is in the form of bonus points that are going to result in a future gift or discount, the sales associate should tell me how many more points I need to reach my goal.  If I’m close to my goal, I may even make another purchase on the spot just to reach my reward.

6.  Do you keep the customer loyalty program fresh and meaningful?  Many stores begin a customer loyalty program with an enthusiastic blitz.  Staff and customers get excited and sign up customers by the droves.  Often, prizes or bonuses are given to the staff member who signs up the greatest number of customers.  As often, after the initial blitz is over and the prizes are won, customer loyalty programs languish and are put on the back burner to die a slow death.  To be successful, you need to look at customer loyalty programs as living, breathing organisms that need regular replenishment and stimulation.  Periodic events for members, mail or emails to alert members about new merchandise or special “member-only” sales, signage throughout the store that makes it evident of the benefits or being part of the program are all part of keeping the programs alive and profitable.  The staff needs to be provided with regular and meaningful incentives to recruit new members and keep them fully committed to the program.

While software add-ons for loyalty programs are great tools that will help you track long-term customer value, those tools will only be as successful as the additional on-going efforts that keeps these programs meaningful. Loyalty is something that cannot be taken for granted but must be earned every day. Retail statistics commonly agree that it costs 4-6 times more to attract a new customer than it does to retain an exisiting customer. Keeping this statistic in mind certainly seems to justify the expense and work that is put into a well thought out and dynamic strategy designed to increase and maintain customer loyalty.

If you'd like to find out about our Customer Loyalty Programs written for Retail Pro, then click on Customer Loyalty for Retail Pro.

Do Customer Loyalty Programs Really Work? Part I

“Customer Loyalty” is certainly the buzz these days in retail.  Loyalty programs extend to almost every retail vertical market with few exceptions.  So if loyalty programs are so ubiquitous, why aren’t they more successful? Interested in becoming a retail pro?

First of all, what is a customer loyalty program?  Generally speaking, a customer loyalty program is a concerted marketing effort to attract and retain customers as well as to increase customer shopping frequency and the dollar value of their purchases.  Customer loyalty programs come in all sizes and flavors with benefits ranging from immediate discounts on purchases to “point” accumulation which can be used in the future for free or discounted merchandise.  Most serious Point of Sale Systems are capable of integrating with various types of customer loyalty programs.  Unfortunately, many retailers believe that if they install a customer loyalty program at Point of Sale, they will experience immediate and dramatic success.  This is rarely the case.  A long-term customer loyalty strategy must be implemented and regularly monitored for effectiveness.  When developing a customer loyalty strategy certain considerations deserve attention.

1. Who are you trying to target?  To answer this question, you need to run a report on your best customers.   They aren’t necessarily the customers you see most frequently in your stores.   Often, customers who are perpetual bargain hunters show up at your stores on a regular basis to see what you are “giving away.”  They seldom buy at full price and, when they do buy they often have a higher-than-average return rate.  In fact, they’re probably costing you money.  A “Best Customer – Worst Customer” report will give you all the information you need and help you tailor a customer loyalty program that will be attractive to your best customers.
2. How do you make your customers aware that you offer a customer loyalty program?  Several weeks ago I visited my local card and gift shop and something dawned on me.  Every time I went to pay for my purchases, a clerk would quickly ask me if I had a Hallmark reward card.  Usually, in a rush to get out of the store, I would invariably say no, and I would be on my way without anyone asking me if I would like to sign-up for one.  Finally, the last time I made a purchase at the store and was asked if I had a card, I took the initiative and said, “No, but how do I get one?”  The clerk courteously gave me a brief form to fill out and issued me a key chain card.  She still never told me what benefits I would get by using this card, and again, because I was in a hurry and customers were waiting in line behind me, I never asked.  So I am walking around with a card that has “mystery” benefits anxiously awaiting the tchotchke I will get after my 10^th purchase.
3. Are you offering rewards that are desirable to your best customers?  Once you have a list of your best customers, study their buying habits and try to come up with some common denominators.  What types of merchandise do they buy and how often they frequent your stores?  With this information, you can segment your best customers and even customize their rewards according to their preferences.  For example, since I am a male reward card holder who frequents a local pharmacy for toiletries, I really don’t want a “bounce-back” coupon offering me a free tube of lipstick after 10 purchases.  I find these types of rewards not only annoying but insulting. 

Part II will be posted on Tuesday, March 2nd.

If you'd like to find out about our Customer Loyalty Programs written for Retail Pro, then click on the Customer Loyalty for Retail Pro.

 

How Many People Does it Take to Inflate a Basketball?

Last weekend I had fifty bucks in my pocket and was going to buy an "official size" basketball.  I went to a big-box sporting goods chain; they sell everything from golf clubs to yoga mats.

I walked in the front door and was greeted by two manager-acting, lanyard-swinging greeters. We said hello and I was on my way to find a basketball.  It didn't take long; I knew what I wanted: good grip; official size; no more than fifty dollars. I plucked the ball off the shelves and made my way to point-of-sale.  As I approached the greeters, it occurred to me that I ought to have the ball inflated as it seemed squishy. Since both greeters looked underemployed at the moment, I decided to give one of them a job-inflate the ball. I waited at least 15 minutes. In that amount of time, the 18-wheeler outside the store could have had all of its wheels pumped for a cross-country trip.  When the store employee came back, he silently walked past me and started to rummage through a box, trying to find something that would inflate the ball.  He disappeared again and came back 10 minutes later with a rock-solid ball.  I thanked him and went to the register where it only got worse. 

 

I'm a line-loser; I ALWAYS stand in the wrong line.  At the bank the person in front of me is buying a new home and has paperwork.  At the grocery store, the register tape breaks just as I finish dumping my cart contents on the conveyor belt.  You get the picture. 

 

Well at the sporting goods store, it took 20 minutes for me and my basketball to get through the line at the point of sale; no one was paying attention except everyone behind me.  I know I rolled my eyeballs like a rebellious teenager. I'm sure I puffed or huffed a time or two. No one noticed. I changed lines with my friend who was holding my place in the other line (in the event her line went faster than my line).The security tags wouldn't come off the $330.00 order in front of me.  There were tags missing from some of the merchandise in the other line. No one noticed the customer impatience except every customer in the line. There was lots of eyeball-rolling. There were lots of line-losers to keep me company. No line was the right line in that store that day. There were some under-the-breath remarks like, "Where's the manager?" "Who's in charge here?"

 

LESSON FOR BUSINESS OWNERS AND MANAGERS:

The bottom line was: no one, not the cashiers, not the greeters not the invisible mangers were paying attention to their customers.  But the customers were paying attention. That day, customer loyalty was not built by anyone standing in those two lines. Buzz was created but not the kind of buzz that will build a business. 

 

 

Store Within a Store: Good for Business?

 

Recently I picked up my mother-in-law, who's cute with dimples in her cheeks. She was coming to my home for dinner. With nothing that would interest her on my menu ("No" she said to tofu burgers) I decided to stop at a national grocery store chain to pick up some food.  Gerrie waited in the car, patient as usual. I was in a rush, hurried as usual. Fish in hand, I looked for one more item to place in my basket-a surprise for her: a lemon-filled donut. I followed my nose to a Dunkin' Donuts kiosk located inside the grocery store. It's a store within a store (SwaS).  I ordered the donut and pulled out a one-dollar bill.  The clerk asked me if I wanted to pay for the fish as well-at the same time-at the Dunkin' Donuts register. Shocked, I said, "Yes!" I'm still talking about the convenience offered me-being able to handily pay for the entire purchase at one register.  The SwaS concept works for these two complementary stores for lots of reasons. Convenience for the customer is only one of them.

Some retailers have a SwaS and operate very successfully. Should you decide that a SwaS model might work for your retail business, consider the following:

1. Choose a retail store that will be helpful to you-the host sight, by giving you 'critical mass' and credibility that you might not be able to do on your own. (Sephora within JCP?)
2. Don't duplicate assortment/merchandise. No competition. And understand the purchases that might be tied together between the two 'stores.'
3. Make sure the inside store pulls the same kind of customer that you want to attract to your store to increase the chances they'll be interested in your merchandise.
4. Get benchmark data from your retail POS before and after the SwaS to see how this concept is benefiting both businesses, from new sales to new customers to suggestive selling between the two 'stores.'
5. Maintain your own brand. Reinforce your brand.
6. Market the concept of a SwaS to your customers and tell them why you're doing it: to benefit them by making the shopping experience more convenient, with more variety, enhancing the customer experience and maybe increasing customer loyalty.

There are no guarantees on incremental sales for the host store due to a SwaS, but if you choose the right inside store, attract the right customers, sell the right merchandise, you increase you chances of mutually benefiting from this retail partnership.

Bite the Hand that Feeds You?

 

 

This morning, while listening to a major network morning show, my ears perked up when the announcer said to stay tuned for a segment entitled "what retailers don't want you to know."  On hearing this, all kinds of negative ideas went through my head.  What could devious retailers be up to now?  Are they over-charging customers at point of sale?  Are they selling ‘knock-off' merchandise?  Are they selling stolen goods?  When the segment finally aired, the answer shocked me.  Retailers were doing exactly what they should be doing to sell more goods and to make the customer experience easy and successful.  They were smartly merchandising their products.  One example described how an apparel retailer was matching tops to bottoms and accessories.  It was depicted as a trick to get the "brain dead" consumer to buy more.  First of all, this is a win/win for the retailer and the consumer.  In this situation, the smart retailer actually does sell more goods.

Isn't that what retailers are supposed to do?  As a result of smart merchandising, the consumer doesn't waste endless hours trying to find companion goods which results in making their shopping experience more productive and pleasing.

Doesn't it sometimes seem that the media are obsessed with trying to villainize anything the entrepreneurial retailer does?  Don't you think it might be better if the media kept in mind that retail is a driving force in the economy?  Much of the media's revenue comes from retail advertisements and sponsorships.  Why continuously bite the hand that feeds you?