Protecting Your Turf, Keeping Your Staff
How to handle imitating competitors and employee turnover
By Carol L. Schroeder -- Gifts and Dec, 8/1/2008 12:00:00 AM
Q. Imitation may be a form of flattery, but we find it hard to feel positive about a nearby retailer who constantly tries to copy our product selection. Do we have any legal recourse to stop our vendors from selling to her?
A: The law is not likely to protect your right to exclusivity for a line of stuffed animals or cards. However, a strong relationship with your vendors and reps can offer some protection against duplication within your area. You will need to be doing a good volume in a line before you can expect a company to turn down another potential outlet. Vendors, like retailers, are anxious to sell as much product as possible.
However it is in a supplier's best interest to have a few strong accounts selling most of their line instead of many that dabble. If you want to have a line exclusively, it pays to build up a good volume of purchases, pay your bills on time and establish a solid relationship with the sales rep. Most companies will ask the rep whether a new account should be allowed to buy the line, according to Betsy Harrington, senior vice president of sales for Woodstock Percussion. “We usually let the rep decide, based on their account list, although we also review the decision internally. The rep may consult with an existing account to see what their plans are for the future with our line, and for building their business. These are major factors, along with proximity and store type.”
Sometimes a sales representative can work out a compromise in which two stores each carry a segment of a line. For example, a line such as Mudpie could be shared between a pet store and a baby goods store if each agreed to carry only the segment that applied to their business.
Stores vary in what they consider a reasonable amount of territory to have protected. Should it be a few blocks of a shopping district, or a whole town or zip code? But even if there is overlap, as long as the line is sold to another independent retailer, not a big box discount store, you have the ability to compete on an even playing field. When two specialty stores offer similar lines, the one with the best merchandising and customer service is likely to sell the most.
Ensuring Longevity
Q. We are having a terrible time recruiting new employees, and turnover—especially among our young staff members—is a real problem. What are we doing wrong?
A: If it is any comfort, you are not the only retailer experiencing a shortage of employees. According to a recent Careerbuilder.com survey quoted in the National Retail Federation's Stores magazine, 41 percent of all retailers have job openings because they can't find qualified candidates. This situation is due to many factors, including shifts in the population and the rising cost of living in relation to the relatively low level of retail wages.
At least, as an independent retailer, you have the advantage in attracting good candidates in this market, since you can offer a creative store environment, a variety of daily work, meaningful customer interaction and the opportunity to sell interesting products. These factors are often missing from sales positions in our large chain competitors.
It is usually more efficient to retain current employees than to recruit new ones. Although some turnover is to be expected — not many individuals make a career of retail sales — it is worth making an effort to keep your current employees happy. Ask yourself whether you:
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Offer the opportunity to learn new skills like display and buying
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Invite key staff members to attend trade shows
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Seek and respect employee opinions on store issues
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Conduct annual reviews and give salary increases when possible
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Offer a bonus or profit-sharing program to motivate sales increases
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Offer flexible scheduling such as alternate weekends off
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Offer a stable schedule that allows employees to take classes or work elsewhere
It is important to recognize employee loyalty. In our store we celebrate annual work anniversaries in our employee newsletter, and give staff members a silver pin that gets a semi-precious stone added for every five years of service.
Small incentives
We recently gave everyone recognition in the form of a small button for their work aprons that has the store logo and “Staff member since (Year).” It was easy and inexpensive to create these online using a web site like www.Zazzle.com. The buttons have the added benefit of letting our customers know that many of the sales associates serving them have years of experience.
Most retail stores have some staff members belonging to the Millennials generation born after 1981. To encourage these employees to stay longer, appeal to their priorities, which, according to Sarah Gibson of Accent Business Communication, include good work-life balance, the opportunity to get involved and work cooperatively, and a chance to learn new skills and experience different jobs.
This generation has been raised to expect lots of feedback, especially for a job well done. One way to give recognition is through a “Way to Go” form — a written commendation for a job, large or small, that has exceeded expectations. We invite employees to give them to one another, and we give them out. Five “Way to Go” slips can be traded for a small cash bonus. For a free downloadable “Way to Go” form, go to www.specialtyshopretailing.biz and enter form number 6.11.
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