Idea Exchange July 2010

Partnerships for Success

Competition might be at the heart of business, but business owners might benefit from carefully considered partnerships with other businesses to drive sales, said Hazel Jennings with CedarStore.com, an online retailer of outdoor and patio furniture.

Water features do not often stand alone, Jennings said, and most clients wish to purchase additional items, such as bridges and garden art. Jennings recommended partnering with a garden design business or offering an entire landscape solution to customers.

When owners think of other companies as working against their interests, Jennings said they leave themselves isolated. Working together, however, makes the whole industry stronger.

Avoid Overstocking Shelves

With economic recovery comes the danger of overstocking to meet expected demand, said Sherif Mityas, a retail analyst for global management firm A.T. Kearney. Retailers should keep a close eye on inventory control and avoid “jumping the gun” with regard to increasing stock levels,  he said. Mityas added that retailers might witness a return of the “barbell effect,” where luxury brands and discounters on either end of the retailer spectrum do well while retailers in the middle experience more trouble.

Use Social Networking

Social media enable business professionals to connect with customers and promote their businesses and services. Websites and services such as Twitter, Facebook and YouTube represent the main avenues for accomplishing this, said Joelene Chinn with Steel Heart Ltd., manufacturer and distributor of home and garden products in Harvard, Ill.

Pond professionals might benefit from using Twitter, the social media website that allows users to post messages of 140 characters or less, to grow their businesses. Chinn listed several benefits that Twitter can provide to business owners.

1. No cost.
2. Find relevant conversations and reach your target audiences.
3. Follow people interested in your products and services.
4. Be followed by people interested in what you have to offer.

Twitter allows for personal connections, allowing business owners to build customer loyalty. Professionals can accomplish target marketing by recommending visits to the websites, purchases  online and visits to brick-and-mortar storefronts.

Monitor Other Retail Sectors

To achieve success in business, company owners should pay attention to what happens in other retail sectors, said John Stanley, owner of John Stanley Associates, a resource center for businesses, located in Kalamunda, Western Australia. After looking at the retail book industry in the United States, Stanley found pertinent advice for all retailers.

The book industry traditionally was dominated by independent retailers, he said, but now chain stores carry around 21 percent of the sector, about the same as the independent retailers. Online retailers carry about 20 percent of the market, with book clubs and big box stores carrying about 10 percent each, he said. The result is no single, dominant retail outlet.

The way people buy books can tell retailers a lot about how businesses should market their own wares. He suggested that retailers pay attention to how many products they sell due to low-cost internal marketing campaigns.

Online market awareness also proves critical for any business to succeed, he said, now that the Internet plays such a large role in retail sales. Part of this trend involves the shift away from traditional advertising sources to consumer reporting on products. As a result, Stanley is a great believer in the power of social media and the need for all retailers to get involved with social networking as avenues for communication about their products and services.

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Idea Exchange July 2010

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