Unlocking Sales Success: How to Transform Underperforming Retail Categories

16 Inside Outdoor | SPRING/SUMMER 2023

Questions to ask:

• Has anything changed in the months since sales began slumping? This could pertain to placement in the store vendors or even staffing to name a few.
• What are the top sellers in the classification currently?
• What are the slow sellers how are they being identified and what corrective action has been taken?
• How fresh and saleable is the current inventory?
• How many vendors are you currently buying from?
• Is the selection too broad?
• Are the price points right for the intended customer?
• Is there any duplication/overlap of products styles colors sizes etc.?
• Are any of the products carried in this class available online (most likely) and if so are you price competitive?
• Is the assortment plan correct for the classification?
• If a significant portion of the sales in the category are sold online how does your current shipping policy compare to others?
• Are you suddenly competing with your vendor and if so has this resulted in a loss in sales?
• Are your sales associates properly trained?
• If you are over-stocked compared to your merchandise plan what can you eliminate?
• How much of the product in the class is old? Over three months? Six months? One year?

If you determine there are multiple different items contained in the slumping category a deep dive into the subclasses will be needed to isolate the problem. You might find that there are very fast turning items in a poorly performing class that are being overshadowed by the poor performance of the rest of the category. Once you have discovered the problem it’s time to create and execute a strategy.

Create and execute a strategy

• Have someone on the staff or marketing department study the web for influencers in the area to find out what is trending in the category. This should most likely be done by age group: 30-40 40-50 over 50 etc.

Assign a Designated Staff Member

Oversee the category and become the resident expert. This individual will oversee presentation as well as advising the buyer on fast sellers that need reordering as well as slow sellers that need stock balancing and/or markdowns.

Create a Marketing Campaign

Include email blasts and social media content e.g. Instagram reels.

Conduct Vendor-Sponsored Clinics

If appropriate educate sales associates and customers regarding features advantages and benefits.

Consider Sales Contests

For a limited time.

Reach Out to Vendors

Seek input assistance display ideas advertising money promotional merchandise and even samples for sales associates if applicable.

Implement and Review Strategy

Once a strategy is created and agreed upon it needs to be implemented. Review your results weekly and tweak your strategy as needed to improve results.

Follow the Steps for Improvement

By following the steps outlined above of identifying the problem determining the cause and implementing and monitoring a strategy the chances of improvement are greatly improved.

Contact Information

As a service to outdoor industry retailers I am available to discuss any unique situations not covered in this article. My contact information is listed below. Ritchie@arsotb.com or 816-728-8740. You also can contact me at www.advancedretailstrategies.com.

Reflecting on Recent Challenges

Ok so you dodged a few bullets in the past couple of years. Covid lockdowns are in the rear-view mirror supply chain issues for the most part are yesterday’s news and staffing issues are at least better. Things are going reasonably well as measured by sales increases against last year with customers shopping once again.

Back to Business as Usual?

Back to business as usual right? Time to relax? Fuhgeddaboudit! You’ll have plenty of time to take life easy when you sell or retire. P.T. Barnum once said “comfort is the enemy of progress.” If you are too comfortable you might be tempted to stop aiming for improvement and that…

Could be dangerous.

I would suggest stepping out of your comfort zone and challenging the status quo. Reviewing your retail operation store by store department by department class by class and vendor by vendor is a wonderful starting point.

If you are like many retailers you have most likely encountered a classification or category that at one time or another was underperforming. In this article I will point out some things to look for that might help you identify and hopefully correct that issue.

First off the warning signs of a troubled category must be recognized.

Secondly the cause of the problem needs to be determined. Finally a strategy needs to be developed and executed properly to fix the underperforming category.

Signs that a class might be in trouble.

Here are a few indicators that should set off some red flags. Things to look for are as follows:

• Sales that are trailing last year for several consecutive months for no apparent reason.
• A decrease in maintained markup.
• No significant receipts of new merchandise in the past few months.
• Excessive markdowns.
• Stock-to-sales ratios begin exceeding plan causing inventory turnover to slow.

If one or any combination of the above is happening the next step is to begin by asking questions.

How to ‘Fix’ an Underperforming Category

By Ritchie Sayner

“…Having a plan of how much to buy in each category when to have it delivered and when to mark it down is essential for most retailers. Ritchie Sayner has the expertise to help any retailer be as profitable as possible with every buy.”

“Ritchie has delivered an exceptional resource to guide retailers to the next level. A must-read for any retailer whether new in the business or a well-seasoned pro. Retail Revelations will become your constant companion.”

“Ritchie’s helpful insights come from real experience working in retail and helping so many retailers achieve their financial goals.”

Retail Revelations

Strategies for Improving Sales Margins and Turnover

“If you don’t find at least one good idea from reading this book I’ll buy it back!” —Ritchie Sayner

Available on 2nd Edition updated with 50% more content

Since 1980 Ritchie Sayner has consulted with hundreds of independent retailers on inventory control issues. He is the owner of Advanced Retail Strategies LLC and an affiliate of Management One. Contact ritchie@arsotb.com or visit online at www.advancedretailstrategies.com.

• 2nd Edition available in Kindle and Paperback

Summary

The article provides strategies for addressing underperforming retail categories emphasizing the importance of identifying issues through detailed analysis and developing targeted strategies such as leveraging influencers designating staff experts and creating marketing campaigns. Key steps include monitoring sales trends adjusting inventory and engaging with vendors to enhance product offerings and competitiveness.

“Comfort is the enemy of progress.” — P.T. Barnum

Real-World Examples of Retail Strategy Implementation

Here are some examples of how retailers have successfully applied strategies to address underperforming categories and enhance their sales and operations.

• A clothing retailer noticed a decline in sales for their summer collection. By analyzing sales data they identified slow sellers and adjusted their inventory by offering promotions and discounts on these items. They also launched a social media campaign targeting influencers in the fashion industry to boost interest and sales.
• An electronics store found that their smartphone accessories were not performing well. They assigned a staff member to become an expert in the category who then worked with vendors to organize in-store clinics demonstrating the benefits of their products. This educational approach helped increase customer engagement and sales.
• A home goods retailer experienced a slump in sales for their kitchen appliances. By consulting with vendors they received promotional merchandise and samples which were used in a sales contest for associates. This not only motivated the staff but also increased their knowledge about the products leading to improved customer service and higher sales.

Discover Proven Retail Strategies!

Explore expert insights and actionable advice in
Ritchie Sayner’s renowned book:
Retail Revelations – Strategies for Improving Sales Margins and Turnover 2nd Edition.

This must-read guide is perfect for retail professionals looking to
optimize their operations and boost profitability.

Amazon Rating:

★★★★☆

4.6/5

Purchase on Amazon