Article by Eric M. Weinstein
In recent days the Dow Jones Industrials have hit all time highs in recent weeks, but these gains do not translate in real dollars for retailers throughout the USA. The same thing applies for the recent increase in house values; with the perceived gains, consumers feel that they have more money to spend, but the reality is quite different. Consumer debt is at an all time high and savings is at an all time low. This poses a difficult situation for retailers, a situation that is also compounded by changes brought on by technology and distribution.
Technology, more specifically, the Internet has changed the way people shop by allowing anyone, anywhere the ability to reach customer worldwide. Big box retailers have changed the way product is distributed; forcing down their costs due to their size and reach, while driving prices down. These factors mean that independent retail stores everywhere are facing more and more competition from the big box stores and the increasing variety of online shopping options. It is now crucial that retailers everywhere have to figure out new and innovative ways to reduce costs and maximize profits.
Operational efficiency is more important than ever. At the end of the business day the cash register contents have to be counted and matched to that days sales. This is an exacting and labor-intensive process, where every penny counts. That is why hundreds of stores now use electronic coin and currency counters and sorters. These devices accurately count coins and currency and even detect counterfeit bills. It used to be that only banks and high-end stores could afford these complex machines, but not anymore. There are top quality counters and sorters being manufactured in Asia for the US market at prices that everyone can afford.
One of the most expensive costs for retailer is advertising. Once a store attracts customers great pricing and excellent customer service will keep them coming back, but how can stores get them to spend more? Signs and point of purchase displays are tried and true methods to get those “extra dollars”, but what about the “spare change”? A great way to collect this “spare change” is gum and candy vending. An old fashion gumball machine with gumballs that vend for 25 cents each will pay for itself in weeks. There are many vending options available, from triple vend machines, sticker vending, to toy capsule machines that vend product for 50 cents each. The best place for these moneymaking machines is near the checkout counter or store entrance where the chances for impulse purchases are best.
Independent retailers have to always be thinking of new and innovative ways to reduce costs and maximize profits or risk loosing market share. Stores that once thought they were protected due geographic or distribution challenges are now finding that the world is changing fast and they have to continually look for new ways to keep their customers happy and their doors open.
About the Author
Eric M. Weinstein is the VP of New Business at Specialty Store Services, a leading business to business provider of Retail Store Supplies and Retail Store Displays.
