Retail Observer

September 2014

The Retail Observer is an industry leading magazine for INDEPENDENT RETAILERS in Major Appliances, Consumer Electronics and Home Furnishings

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IFA in Berlin the world's leading retail show for consumer electronics and home appliances. O cial partner of: THE FUTURE since 1924 ifa-berlin.com The global innovations show. IFA-Contact: Messe Berlin North America Tel. +1.540 372-3777 ยท berlin@exhibitpro.com SEPTEMBER 2014 RETAILOBSERVER.COM 55 holiday shopper. There is significant volume being done during these promotions. So we need to take a step back and manage our margins over a longer period of time. We can't afford to live or die by the daily ticker. We must manage our profits on a longer curve. If you take a 30-day snap shot, you will have several days where you are on promotion, and a majority of days where you are not. It is these off promo days where the profits can be maximized. If we utilize the manufacturer buy-in to our advantage, we buy right for the 30 day period and utilize these values to remain profitable on promotion, while amplifying our off promo profits. BLENDED MARGINS This concept is an accepted financial practice called blending margins. In today's current retail environment, it is imperative that we manage and maximize every consumer interaction. We need to ensure we have our best foot forward when that consumer is in the market for an appliance. We cannot afford to be higher than the market at retail. The customer must feel that we offer at least the same value as others in the market. Unfortunately, this "value" is most visible as price. If we are offering the current market price on product, we need to buy smarter than we have in the past. Utilizing a Go to Market strategy that is succinct will help you not only buy smarter, but enable your retail sales people to maximize the profit opportunity with each consumer. LOOK AT THE BIG PICTURE The appliance business is tougher today than it ever has been. There are more retailers fighting for fewer consumers. We must be able to stand and fight when the market gets tough. By utilizing a blended margin strategy and taking a step back to look at margins over a period of time vs. daily, the profit picture becomes sharper. Don't get me wrong; we believe there are still challenges in this wholesale/retail promotions cadence. The front side, opening margins have not been acceptable and we need a clearer path to profitability. But the reality is, we cannot afford to run for cover during holidays in hope to save margin. We need to own the consumers during the holiday period as much as we need them outside of these windows. The only way to do that in today's environment is to manage your business from a longer-term view. Manage your plan to sell (D.E.S) with tighter reigns. These tweaks to your business outlook will allow you to weather the storm while gaining additional consumers. This process will help you buy smarter and compete tougher in today's market! Patrick Maloney is the Vice President of Appliances for Nationwide Marketing Group, a leading buying and marketing organization for independent retailers. To learn more about new ways to grow your appliance business or the many benefits of joining Nationwide Marketing Group, go to www.nationwidemarketinggroup.org. RO

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