Creative Leisure News - "Benny Da Buyer"

A view of the industry through the eyes of independent and chain retailers.

Three Ways Retailers Can Avoid the Black Friday Blues

How to maximize what should be your biggest sales day.

by Mark Ryski (November 21, 2011)

(Note: Mark Ryski is author of Conversion: The Last Great Retail Metric and When Retail Customers Count. He is CEO and Founder of HeadCount Corporation.)

With the holiday season fast approaching, retailers are preparing for the day of the year that they love yet dread: Black Friday. A strong Black Friday means a good start to the all-important holiday selling season, so every retailer needs to make the most of it.

The sad reality is that many retailers squander this precious day by being ill prepared and even worse, if they don't have store traffic and conversion data, they won’t even know had bad they missed!

Forget about comparing same-store sales this year versus last year -- in this case, comps don't tell the whole story. Even if comps are up, it doesn't mean you performed well. In fact, you very well may have done poorly. Here's how:

Let's say that your Black Friday sales are up 5% over last year. At first blush this might seem like a good result. But how would you feel about the result if you knew that store traffic was actually up 15%? Compared to last year’s sales you look good; compared to the traffic opportunity, you significantly under-performed. If store traffic was up 15% but sales were only up 5% that must mean that a bunch of people walked out without buying.

The only way that you can truly understand what was possible is to measure store traffic and conversion rates -- that is, the number of buyers vs. visitors. Sadly, most retailers today don't measure traffic and consequently can't calculate their conversion rates.

If you don't measure traffic and conversion in your stores, unfortunately you are incapable of leveraging these tips; if you do, keep reading.

1. Focus on conversion, not average ticket

Even the most junior associate is taught to up-sell and cross sell in order to drive up average ticket values -- it's a fundamental tenant of retailing 101. However, this rule shouldn't apply on Black Friday. In order to maximize sales on Black Friday, you need to process as many transactions as possible. Any extra time associates spend trying to upsell/cross sell could mean a lost sale. Here’s an example. If the average ticket is, say, $30, and an associate spends extra time trying to get the sale up to $40, even if she was successful, if in doing so, she missed several other $30 sales, the $10 upsell was a bad trade-off. Having associates focus on converting as many prospects as possible will deliver the best result.

2. Create store team conversion objectives

Converting massive flows of Black Friday store traffic into sales is a team sport. From the merchandisers to the cashiers, everyone needs to be on their toes. Setting a conversion target for the store and then offering meaningful reward for the while team if they meet the target is a great way to keep everyone in the store motivated through what will be a brutally long and challenging day. Also, as a team reward, the store personnel will put pressure on themselves to keep the less than motivated associates working hard.

It's not good enough to have individual incentives, here's why. Individual societies may be performing brilliantly. As individuals, they hit or even exceeded their targets and made a bonus -- good for them. But what about the store? Having a store conversion target ensures that everyone keeps working hard, even if some associates are doing well individually.

3. Take the money – FAST!

Anyone who has ever worked in a retail store or shopped on Black Friday has seen it: check-out lines so long, they almost defy belief. Enormous, serpentine lines that can wind around the entire store! As shocking as the scene can be, the bigger shock is to be standing in these lines painfully watching some poor, run-off-her-feet cashier, slowly and methodically processing sales, knowing full well that she gets paid the same whether she processes 50 transactions an hour or 100.

While it is true that customers have the highest tolerance to check-out pain on Black Friday, these long, slow moving lines will cause some people to abandon their carts, but more likely will cause others to simply leave the store, leading to another lost sale.

Every retailer knows that the trick is to get customers processed as quickly and painlessly as possible, but how? Here are three suggestions:

Smart queues. Give lots of thought to how you want customers to be staged for check-out and make it clear where people need to go. Line up ambiguity adds to the frustration and stress.

Work the queue. A good use of a managers' time is to periodically walk up and down the queue thanking customers for patience and setting expectations for how long the wait will be. This small gesture can go a long way to getting people to stay and pay.

Cashier incentives. Offer cashiers a small but meaningful incentive for the number of accurate transactions they process. This will provide a little extra reason for them to keep working hard even when they are dead tired.

Traffic and conversion help make it happen

Without traffic and conversion data, store operators are at a significant disadvantage. Instead of preparing and setting targets, too often managers, with only last year's sales data as a guide, have no idea what to expect. They know Black Friday is going to be crazy, but "crazy" is hardly a quantifiable or actionable. Instead of panning and preparing, they can only pray -- not a great strategy.

Let’s face it, Black Friday is a tough day. Store managers and associates are going to be run-off-their feet. Some prospects will leave the store without buying -- you’re not going to win them all. However, with store traffic and conversion data, retailers can better plan for the deluge of traffic and convert more of it.

(Note: For more information on Mark Ryski and his books and company, visit www.headcount.com.)

xxx