ECONOMIC REPORT – RETAIL SALES DOWN – SO WHAT DO YOU DO?
By now you may have heard the news — retail sales were down significantly in June – down way more than expected.
Some key stats from the economic report:
- “The 0.9 percent drop in June sales reflected a 2.9 percent fall in sales of autos and auto parts as Detroit continues to struggle with slumping demand for its sport utility vehicles in the face of rising gasoline prices.
- In a sign of the weakness in the housing market, sales at furniture stores were down 3 percent last month, the biggest setback since February 2003, and sales at hardware stores fell by 2.3 percent.
- Sales at specialty clothing stores fell by 1.4 percent while department stores saw sales fell by 1 percent. A broader category which includes such traditional department stores and big chains such as Wal-Mart posted an increase of 0.3 percent in June.
- Sales at gasoline service stations dropped by 1.1 percent, a decline that was attributed to a temporary fall in gasoline prices during the month.
- Excluding the big decline in auto sales, retail sales would still have been weak, falling by 0.4 percent, the poorest showing in this category since last September.
- Economic growth slowed to .7% in the first three months of the year, the slowest rate in four years.”
So what does that mean to you, the small business owner? It means less free cash for your customers to spend in your store.
THE REAL WORLD RETAILING TAKEAWAY
Time once again to get proactive. You’re fighting for a smaller piece of the cash pie so make sure you still get your full slice.
There was a great business book a few years back called Trading Up.
The premise of Trading Up is that consumers will trade off one thing in order to afford another. For instance, I’ll save money by buying all of my personal care products at Target (and I’ll buy the cheapest brands) so I can afford a $100 tube of anti-wrinkle skin cream. Or I’ll forego weekend getaways for a year so I can afford that vacation in Tuscany.
So your goal is to get your customer to trade up to the products or services you’re offering (and forego something else or trade down during this time when they are spending less).
So how do you do that? Create awareness and drive them to your store — it’s called marketing. It doesn’t have to be expensive….get a little more aggressive with email campaigns. Offer your customers some extra savings or work with a vendor partner if possible to provide free deluxe samples. Any extra little perk will tip the scales in your favor and get your customers to make a trip to your store — and once they’re inside, chances are you’ll have them spending as they normally would.