Tag: headroom

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Retailing in a Recession: Part Four

Retailing in a recession

Many retailers closed their doors during the last recession and lately, the economic outlook has been uncertain. Although we have steered clear of another recession to date, we want to give you the tools to succeed in the event there is one. In the final part of our series Retailing in a Recession, we cover how to tailor customer research and merchandise planning to your customer’s needs.

Customer Research Strategies for Retailers in a Recession

Customer research is as easy as asking your clients questions at check out. Below are four questions you should train your employees to ask.

  • Did you find what you need?
  • Did you ask for help finding it?
  • Is there somewhere else you’d expect to find the item?
  • Is there something you want that we don’t ever carry?

These questions help establish different data points including if current offerings are in stock, shows the customers you care, and improves your offerings to better meet their needs.

Merchandise Planning

Customer research can also help determine merchandise planning. In all economic climates, merchandise selling well should stay, and merchandise not selling well should go.

During a recession, retailers should take extra care to plan their merchandise offerings to align with customer needs and preferences. Can merchandise be fixed, rather than shrunk, if productivity is low but headroom is high? And what about merchandise that has high productivity but low headroom? Should it remain?

In summary, some retailers will turn an economic downturn to their advantage. Consider starting with a customer survey using a mix of open- and closed-ended questions to gather both qualitative and quantitative data on preferences.

Inspiration for this post comes from the Harvard Business Review’s Five Rules for Retailing in a Recession. Check out Rule 5: Retool Core Processes for more information on customer research.

If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.

The post Retailing in a Recession: Part Four appeared first on American Quilt Retailer.

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Retailing in a Recession

retailing in a recession

Fortunately for now we are not in a recession. But as we heed the warning signs of an economic slowdown, we thought it worthwhile to visit how to retail in one.

Identify Headroom

The first rule of retailing in a recession is to protect your most loyal customers. However, if your loyal customers cut their spending, that means they’ll also spend less in your store. Enter, headroom.

Headroom is defined as “market share you don’t have minus market share you won’t get,” or in other words, switchers. Switchers are customers who aren’t loyal to your store, but aren’t loyal to your competitors either.

There is no single way to measure headroom. The best place to start is to identify switchers. For example, a camera store categorized customers based off their knowledge, level of service required, and product sophistication. By determining what your switchers like about your competitors, you can make the necessary adjustments in your store to fulfill their needs, thus increasing your market share.

For more information, check out the Harvard Business Review’s Five Rules for Retailing in a Recession. And stay tuned next week for more on Retailing in a Recession.

h+h Americas

In other news, join Creative Retailer as we exhibit at the premier tradeshow, h+h Americas, hosted in Chicago, IL June 21-23!

At the event, you’ll have the opportunity to join the booth hop, network with new and familiar faces (Thursday, June 22nd at noon), and watch Heidi Kaisand give a session on the main stage Friday, June 23rd at 1:30 p.m. CST.

Use this link for a free ticket ($55 value) and stay tuned for more details.

If you’re looking for more information to guide you in owning a retail business, subscribe to Creative Retailer today. Already a subscriber? No worries—join our Facebook group for insights and dialogue from industry specialists like you. And don’t forget, you can always purchase single issues if you prefer that instead.