New Technologies, New Risks

As new technologies evolve in the retail marketplace, retailers and consumers alike must adjust to new ideas and opportunities that have the potential to change the way they do business. Currently, many retailers are preparing for an advent of new payment options. Mobile payments are evolving rapidly and in the coming years are expected to be a commonly utilized alternative to cash, checks and credit cards. However, just as the onset of online banking and billing faced security challenges and setbacks in its early days, so will the new payment technologies... 

Uncovering Hidden Losses

It is said that, “What you can’t see won’t hurt you.” But in retail, nothing could be further from the truth. While loss prevention (LP) professionals are usually very focused on highly visible causes of loss, such as shoplifting, organized retail crime and administrative error, they also must consider hidden losses that occur without being noticed or tracked: A shopper does not receive adequate customer service and leaves the store. Merchandise isn’t replenished on the shelves, driving customers to a competitor. Or, worst of all, lost... 

Predicting the New Year

Retailers, while not acclaimed fortune tellers, quite often are asked to predict the future. How much inventory must be purchased to meet demand? Will markdowns be required? How will the new selling year fare? Without proper analysis of your financial situation, these predictions are nothing more than uneducated guesses. Instead, retailers must perform a thorough evaluation of their business and its success in past years. This can be done by answering the following five questions, before a business plan is set in full motion for the new year: 1)... 

Open to Buy Planning

The formula for open-to-buy (OTB, a financial budget for retail merchandising) planning is not difficult. To start, look at planned sales. Where do they come from? Most independents get into trouble right out of the gate, by getting this segment of the planning process wrong. A common, albeit incorrect approach, is to plan monthly sales volume based on last year. Using last year’s figures to project future sales is wrong on several levels. If sales last year were driven by markdowns and were thus unprofitable, there is a good chance that planning... 

The Importance of Proper Timing: Setting up Inventory Deliveries

As the saying goes, “Timing is everything.” Although selecting the right vendors and styles at the right price points is very important, establishing ideal delivery start and completion dates for inventory orders can be just as important. Before buying for any new season, you need to know which vendors have been the most profitable, along with what styles and sizes sold best in the prior seasons. No doubt you know which lines were not profitable and which items didn’t sell. But was the lackluster performance for these items really a result... 

Recognizing and Preventing Hidden Loss

While loss prevention (LP) professionals are usually very focused on highly visible causes of loss such as shoplifting, organized retail crime and administrative error, they are advised to also consider ‘hidden losses’ that occur without being noticed or tracked. For instance, a shopper does not receive adequate customer service and leaves the store. Merchandise isn’t replenished on the shelves, driving customers to shop a competitor. Or worst of all, lost sales from a customer for life due to a bad experience in the store. While not classified... 

A New Year’s Retail Resolution

Why do we go through the charade of making idol promises to ourselves each year that are usually dismissed or forgotten by the time the effects of New Year’s Eve have worn off? Have you ever noticed all the new faces in the health clubs in January, sporting the cross trainers and workout wear acquired over the holidays? Most will have abandoned their physical aspirations come spring. Making resolutions for the upcoming year is a time honored tradition with roots tracing back to Babylonian times.  In 153 BC, Janus, the mythical King of early Rome... 

Retail Evolves to Fill Vacancies

Corresponded with the rise of suburban living after World War II, the shopping mall became a highly favorable modern indoor version of a traditional marketplace. Over the years these malls have been historically filled by big brand name retailers, until recently as many of them battle with the harsh reality of less foot traffic, expensive leases and possible bankruptcy. In turn, property and leasing managers have been given the challenge to fill vacant shops. Retail Sectors Evolve to Fill Vacancies and Boost Sales One of the latest trends increasing... 

Inventory Variance

With the Holiday season soon behind us, now is a good time to review the past twelve months and evaluate both quantitatively and qualitatively the areas of your business that have worked well, in addition to those areas that could stand improvement. Most retailers take a physical inventory in conjunction with their fiscal year end.  Certainly this is a recommended practice from an accounting perspective.  From an operations standpoint, the benefits of a clean and thorough physical inventory are numerous. If for example, a physical count is taken... 

A Thorough Year End Business Analysis Provides Educated 2012 Predictions

Retailers, while not acclaimed fortune tellers, quite often are asked to predict the future. What products are going to sell well during the holiday season? How much inventory must be purchased to meet demand? Will markdowns be required? And as the fourth quarter comes to a close, retailers are expected to make the largest prediction of all: Can growth and profit be expected in the new year? Without proper analysis of your financial situation, this prediction is nothing more than an uneducated guess. Leanne Hoagland-Smith, a Chicago area business... 

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