By Satya Tiwari
Reflection on last year’s economic status is bleak. Unfortunately, we are all aware that projections for 2009 appear to be more of the same.
Many retailers experienced a sharp decrease in sales last year not seen since the 1980s, and studies show that consumers are being highly selective and narrowing purchases down to mainly necessities. Even those with deep pockets are searching for ways to limit spending.
With all of these negative factors, it is crucial for retailers to find ways to not let their high inventory and low cash flow lead to stagnation in their business. They need to be more creative in their businesses and find ways to be more flexible. Retailers can offer fresh product and maximize sales by leveraging the strength of their suppliers.
The slowdown not only affects retailers—suppliers see their warehouses filling up with inventory, as well. Retailers need to make sure they can capitalize on their suppliers’ inventory by purchasing out of their warehouse, not buying heavy inventory.
Most suppliers have a wide variety of display solutions that can help the retailer sell more with less investment. These need to be a priority on the retail floor. Displays need to be continually updated, and salespeople need to understand these programs so they can be valuable when they work with customers.
Another element to securing higher sales is to utilize product catalogs and Web sites. Many suppliers have strong catalogs and Web sites that can help in retail sales. The most valuable ones have sales-related materials that are not only informative and clearly defined, but also inspiring. The catalogs and Web sites that are straightforward and easy to navigate prove to be valuable so that salespeople and their customers feel comfortable about purchasing products. The consistency in quality and color accuracy also leads to more satisfied consumers.
Retailers also need to maximize their point-of-purchase materials. Many consumers want to walk the showroom and learn about their options without a salesperson pestering them. Pricing and product information should be clear, but additional product options should also be represented. For example, if a particular product is one element in an entire collection of coordinating items, those coordinating products should also be discussed. This will not only provide customers with helpful decorating ideas, but will also promote larger sales for the store owner.
Of course, nothing is more beneficial than developing strong partnerships with your suppliers. They should understand your personality and goals so they can show how their products can benefit you the most. Working directly with them to assist in effectively promoting and merchandising your retail store is a great way to promote higher sales.
Sustaining revenues is a priority for everyone in 2009, and it will certainly take more creativity and flexibility than previous years. Retailers should be developing strong partnerships with their suppliers to leverage their strengths. Suppliers should be focusing on solutions for their retailers rather than big numbers. At the end of the day, the supplier’s success depends on the retailer’s success, and those that work together to handle the adversity will prove to be the most successful.
Satya Tiwari is the president of Surya.