Small business retail has been one of the hardest hit industries during the current recession. With consumers spending less on both essentials and discretionary purchases, smart retail businesses are rapidly changing the way they do business, not just to stay alive, but to strategically plan for long-term success.
Several weeks ago, I wrote about an Austin, Texas-based business, The Texas Store, which is a boutique store that sells high-quality, unique products that showcase the Lone Star State, licensed University of Texas Longhorn souvenirs, and trinkets of Austin’s grassroots “Keep Austin Weird” movement.
In my prior post, I wrote about how the 21-year-old business began seeking creative and innovative ways to not only survive the recession, but to come out of it healthy and strong. Owners Richard Horn and Bill Mathews have been contrarian thinkers during the last two years and have gone against many traditional retail strategies.
Says Richard Horn, “At first our goal was to make it through the recession by doing what many other businesses have done. During late 2007 and all of 2008, we trimmed overhead as much as possible. We began using weekly cash flow forecasting to help us manage our cash, and we thought of ways to change the model which our business operates.” Those steps have worked. Now both Texas Store locations are in the black for the first time in two years, despite a significant reduction in total revenues since the beginning of 2007.
Some of the strategies that Horn and Mathews have implemented strengthened are:
Making the store a destination rather than an impulse stop. Both Texas Stores are in suburban Austin malls. While they are both nice, well maintained traditional indoor malls, shoppers have traditionally gone to malls specifically to shop at one of the anchor tenants like Macy’s. Stores like the Texas Store attract customers who are in the mall for other reasons. “One of the first expenses we did away with was Yellow Page advertising,” says Horn. “It was expensive and didn’t drive business to our stores. About six months ago we put up a Web site to showcase our products in the two stores and to try to bring customers into our store not because they were coming to the mall, but because they want to make us a destination.” The strategy seems to be working. In August, traditionally a slow sales month, both stores sales were very high compared to the last two Augusts. At the same time the Web site had approximately 33,000 visits. “We received a number of phone calls from people asking about products because they found us on the Web. We also started a Twitter account where we put up Texas jokes, fun Texas facts, and Texas Longhorn sports trivia. We have developed a surprising number of loyal followers that are having fun with us. We use Twitter to try to build a customer loyalty and to drive visits to the Web site.”