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Wednesday, 10 December 2008

We may be serving, but are not servants

The BBC reports today that High Street sales will fall by more than 4 percent in 2009, the largest drop in more than 40 years. Verdict Research claim that declining sales will lead to billions wiped off retail profits. The research predicts that the only sectors to be unaffected will be Internet sales and groceries (at times like this I almost wish I had stayed at the supermarket I used to work for).

According to Verdict, over the past ten years consumers have consistently spent more than they have earned: income growth has run at an average of 2.4 percent per year, while spending has increased by 3.3 percent.

The British Retail Consortium retail survey shows that sales in November were down 0.4 percent compared to last year. On a like-for-like basis, which removes the impact of new store openings and closures, the survey found that sales in November were down 2.6 percent. This was the sixth month in a row to see a like-for-like sales decline. Despite this, total sales were up 2 percent in November when the figures are measured on a 12-month moving average.

I can't comment of course on other industries, but my own store has seen a sharp decline in footfall - the good news is that our conversion rate has steadily improved - those customers who do walk through the door are not leaving empty handed. I was surprised the other day to be told the proportion of business that comes from the peak trading period from the end of November through to mid January. At this time of year, staff are under considerable pressure to perform.

It is not easy when the stakes are so high, and you are selling dreams in the form of high cost products, as I do on a daily basis. It is important to make sure that the customer gets the right product at a price they can afford, but equally important that we don't forget the essentials. Margins are tight - an average of maybe 8 or 10 percent - it is therefore essential that we sell at least 2 add-ons with each larger item - otherwise it is hardly worth selling them at all, for the time and effort it entails. Selling such essentials with these products can triple our margin.

Many customers come into our shop to view the products and pick our brains and then buy online from other companies at lower prices. I admit that I am sometimes guilty of this myself, so cannot blame them for doing so, but these same customers are the first to complain at store closures. What goes around comes around, and if you don't support your local stores, then what do you expect?

When you go shopping this Christmas therefore spare a thought for the staff, who work long hours in stressful conditions for low pay. Conditions are tough, and many face uncertainty as to their future. It takes one bad Christmas (and over extended borrowing) to bring a company down.

Do not get angry or upset when they try to sell you these add-ons or extended warranties but understand they do this in order to save their own jobs. Don't dismiss their suggestions out of hand, as many customers do, doing so would have saved them another journey (and travel costs) as they inevitably return to buy these things. Buying these essentials at the same time can also save you money, since there are package deals when bought at the same time. Shop staff may be serving, but they are not servants!

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