Although the retail economic recovery started some time ago, some merchants are holding onto their recession mindset. The problem with this is that merchants who are overly cautious are missing out on growth opportunities. And since the recession weeded out some of the weakest retailers, competition amongst the stronger retailers has increased.
So, are you taking advantage of the upturn, or holding back? Read our Top 5 Retail Mistakes to find out:
Mistake # 1— You stop buying
Solution: Merchants need to be landing new merchandise all the time—small deliveries every 1-2 weeks. Remember, if you stop buying, your customers will stop shopping because there is nothing new to interest them.
However, to be in the position to flow merchandise at this rate you need open-to-buy (OTB). If you don’t have the OTB, you are not turning fast enough.
Mistake # 2—You buy too far in advance
Solution: Retailers need to land goods closer to season in order to accurately forecast consumer trends.
Of course, how far in advance you buy depends on what kind of store you have. The more luxury the store, the further out you will have to buy. However, all merchants can work with their vendors to plan deliveries for certain months.
Mistake # 3— You don’t markdown soon enough
Solution: Retailers must understand that they need to promote their business; you can’t dig in your heels and stick to full pricing while your competition is promoting. Your markdown cadence needs to be in line with the market.
Mistake # 4 – You don’t switch out vendors fast enough
Solution: Retailers should plan to rotate 10% to 20% of their vendors every season. Look at the worst performers from the previous season and replace them with new vendors. This doesn’t mean you should throw out a normally strong brand when they have one bad line, but you should track each vendor’s season-to-season performance.
Mistake # 5—You don’t spend enough time shopping other stores
Solution: Shop the competition and go to other cities. Don’t just go to market. It’s more important to shop other stores in other markets to get inspired and see what’s working with different customers.
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