Retail Crisis Solutions Photo: iStock
04.02.2015 8489

Retail Crisis Solutions

The drop in sales due to dying demand is causing a panic in the heads of retailers. What to do in the current situation, which, one must think, will only worsen in the short term?

Operational sales management. “At present, it is necessary to pay attention to several areas of work in the complex,” says Dmitry Politov, marketing analyst at TMHF Group, which manages the Soho and Clarks store chains. - First of all, it is necessary to introduce operational sales management in the company. In the chain of stores, it is necessary to control the profitability of each point separately, it is necessary to collect data on the operation of each store and carefully analyze them. This will allow the retailer in time to assess how much patency has fallen at one point or another, what is the state of the warehouse of each store. Such data are necessary for negotiations with lessors to reduce rent in order to rely not only on general words about the crisis, but also on specific indicators of patency and conversion in the shopping center. At the same time, the data will be necessary to monitor the conversion of the store, the operational management of the personnel of the outlet and its objective and healthy motivation. ”

Following this strategy, Fashion Galaxy recently closed 3 from 17 of its stores - in the Shchuka mall, the Atrium mall and the Kaluga mall.

Flexible assortment policy. It is also necessary to analyze the assortment policy and pricing, says Dmitry Politov. “In a crisis, when solvent demand decreases, it is important to keep loyal customers attracted earlier. It is necessary to clearly understand that the assortment is what attracts customers and it is important to keep the concept, the atmosphere of the outlet. Assortment control can help get rid of the ballast of brands that were previously sold shaky and not valky, and at the same time occupied a place on the shelf. At the same time, constant monitoring of sales will allow the use of flexible pricing, allowing you to minimize balances without freezing expensive working capital in a product whose sales rate is too low. Analysis of sales separately at each outlet and comparison of store performance with each other can help to implement various ideas to increase product turnover. For example, as a result of changes in the market, the target audience of one of the stores may change, and the assortment that sells well in another store of this network will be slowly sold in this particular outlet. Here it is necessary to return to the first point and analyze how much this point is potentially profitable - what are the rents, traffic, conversion. Adding sales analysis to this data, it will be possible to make a decision on transforming it into an outlet, or vice versa, organizing a premium sales point on the site of a former multi-brand of “medium +” level.

An illustration here is the recent news that Adidas has recognized the Rockport brand, which specializes in the production of model women's and men's shoes, as non-core. Having decided to sell it, Adidas intends to concentrate on the main direction - sports goods.

Analysis of company resources. Given the current state of the financial market, it is also necessary to analyze the company's resources. “In fashion retail, a significant resource of the company is its inventory,” says Dmitry Politov. - With proper organization of work, they can become a relatively cheap source of working capital. The balances can be implemented in a pop-up store format, or by reorganizing points of sale into outlets / discounts. At the same time, it is important to calculate the economy of each point, taking into account such moments as, for example, the presence of residues, drains, in the warehouses of suppliers, with which it is necessary to negotiate in advance on an additional purchase of drains in sufficient quantities.

Now that constant changes are occurring, it’s also important not to get lost and not to start making changes for the sake of changes or narrowly targeted actions, for example, aimed only at lowering costs, ”Dmitry Politov warns. - It is important to remember that in marketing, each element of mix marketing should correspond to all the others, all 5P should correspond to each other. An expensive product cannot and will not be sold at a point of sale, during the organization of which they saved everything - from equipment to personnel. No marketing moves will save the sale of a product that was initially lost to competitors in terms of price / quality ratio, as the consumer will become more and more discriminating in a crisis. It is necessary to conduct tough negotiations and close the outlet if there is a discrepancy between the stated store concept and the current audience of the shopping center. If earlier everyone worked due to cross-country ability and impulsive purchases and the average was + on the network, then now it's time to focus on the concept, analyzing the work of each outlet ”.

The drop in sales due to the dying demand is causing panic in the heads of retailers. What to do in the current situation, which, one must think, will only get worse in the short term ...
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