The Matr Boomie team had the great privilege of speaking with Kevin Natapow of Creative Retail Solutions for this second installment of our Retailer Scope Series. His company, Creative Retail Solutions, serves to lend retail/inventory expertise to Fair Trade shops around the nation. Before starting Creative Retail Solutions, Kevin co-founded Momentum, a Fair Trade store in Boulder, CO. He helped grown Momentum in to a successful Fair Trade business and now lends his expertise to other retailers. Mango Tree Imports of Saratoga Springs, NY began working with Kevin in early 2016 and has seen a marked improvement since his involvement. They report, "With the inventory management procedures that we've put in place the store is doing much better." Read on to see Kevin's main areas of focus when it comes to revitalizing retail and creating meaningful experiences for your customers.
What are the top challenges in inventory management that retailers are currently facing?
• Inventory Management is both a science and an art. Selecting the right product is the art, but buying the right quantities at the right time is essential in achieving your full sales potential for your shop. This is the science of inventory control. Many of us fall in love with retail for the art side of the equation and tend to either ignore or undervalue the importance of their union. The main challenge in my opinion is seeing the value of putting time and effort into both elements of inventory control.
• Another major obstacle is time itself. Many small independent retailers are so bogged down by the little details of running a small business, in particular a retail shop where you have to be front and present daily, and tend to put details like inventory control on the back burner until they “find the time.” This ends up never happening, and before you know it they are so behind on reigning in their inventory that the process of managing it is too overwhelming.
• This last part ties into using a robust and systematized Point of Sale (POS) system. Many retailers are still not using POS systems or are not using the ones they have to work for them.
What are some behaviors that keep sales stagnant in retail?
By not having inventory control measures in place, you are, by design, keeping sales stagnant. Sales will stagnate when you are not able to bring in new merchandise, keep the shop looking fresh and enticing customers with new themes, colors, styles, etc. When you don’t bring in new merchandise, especially tried and tested best sellers, your shop looks tired, your customers become apathetic about your shop, and sales decline. With a decline or even just a stagnation in sales, cash flow will become tight and limit your ability to purchase new merchandise.
This downward spiral tends to be the demise or stagnation of many small retail operations. Visual Merchandising is another major factor in stagnation. Many shop owners do not use beautiful display fixtures. The old days of fair trade products selling themselves or the mission of the shop selling the items are coming to an end with so much online and comparable marketing to the socially conscious consumer. Every retailer needs to consider how their products look on the display. Many of the products Fair Trade retailers sell are in themselves works of art and should be displayed accordingly. By using cheap fixtures, bad lighting, neutral paints, we cheapen the perception of the products and inadvertently decrease sales and the overall sales experience.
Is there one easy thing that retailers can do right now to increase sales through inventory management?
If you don’t have a POS system - GET ONE! Get one that has all the features you need; do your research and check references for real users and ask them some tough questions about how they use it and what its limitations and capabilities are. Once you make the investment, or if you already have one, set up the systems for you to be able to actively manage your inventory and continue to use them on a monthly basis. Stay ahead of your inventory and keep the cycle of retail moving smoothly and to your benefit. We sometimes forget that the more successful we are the more we support the artisans that inspired us in the first place.
Aside from inventory management, what are some other challenges that keeps retail stores from growing, and could you please share some key suggestions to minimize those problems?
As I mentioned above, we often have the perception that the mission of the store, artisan stories, or the uniqueness of the products themselves will sell the products. It is equally important that we as retailers give customers the best experience in our shops that they can have. For many of us it is next to impossible to compete on price, volume, etc so our main strategy has to be the customer experience. We need every customer to leave our shops, thinking that our store is the greatest one they ever went into, regardless of whether or not it is Fair Trade. If we are picking the best new merchandise to fill our stores, properly tracking and maintaining inventory levels, and making every customer possible feel that they just had the best retail experience of their lives, then sales will soar and the cycle will spiral up instead of down.
What is the most important lesson you learned when you owned a Fair Trade store in Colorado?
Always take a short term loss for a long term gain. The old saying is that the customer is always right, and to some degree that is true. Sam Walton, the founder of Walmart once said, “There is only one boss: the customer. He can fire everybody from the chairman on down simply by spending his money elsewhere”. This is very true, which is why making sure your customers are happy is critical. I found early on that even if in the short term I took a loss by making a customer happy, I gained a long term benefit by earning a loyal customer.
Would you like to add to the conversation? Comment below. If there are topics you’d like us to explore in our next Retailer Scope installment, comment or send an email to firstname.lastname@example.org. In this series, it is our goal to provide retail insights from industry leaders. As always, we'd love to have you join our social media communities. Find us on Facebook, Twitter, and Instagram.