Retailer Comparison Survey
Staff -- Gifts and Dec, 6/1/2002 12:00:00 AM
Following is Part 2 of Gifts & Dec's annual Retailer Comparison Survey. It covers advertising, promotion, and employee practices. Part 1 of the survey appears in the June issue of Gifts & Decorative Accessories magazine. It covers merchandise mix, best-selling price points, product sourcing, and other topics.
ADVERTISING
Ad budgets have remained stable over the last three years, with retailers reporting a median of five percent of their annual gross sales earmarked for advertising and promotions. More than half (56 percent) said their ad spending will be about the same amount during 2002 as it was for the previous year. Retailers allocate their ad budgets across an array of media. The largest proportion - more than a third - is dedicated to newspaper advertising, just as it was last year. Next in line for ad dollars was direct mail with more than a quarter (26 percent), up from 22 percent last year. Allocations for Yellow Pages and special events dropped slightly (only 1 percentage point) from last year's allocation, comprising only 9 percent and 8 percent respectively, of retailers' ad budgets. For nearly two-thirds of the retailers, ads are most often prepared by the store or store owners. Ads prepared by publication or station staff are next in popularity (16 percent), followed by ads designed by outside agencies (11 percent).
DIRECT MAIL
The number of retailers using direct mail in 2001 held steady with last year's results, moving down just one percentage point (67 percent). That's significantly lower than the 76 percent who reported using direct mail in 1999. That drop can probably be explained by higher mailing costs in 2000; that will occur again during 2002.
On average, about a quarter of advertising and promotion dollars were allocated to direct mail in 2001, up slightly from the 22 percent spent in 2000. The majority of retailers use direct mail either once or twice yearly or three to four times a year. About a third say they send direct mailings only once or twice a year while about two-fifths sent mailings three to four times, a pattern that has held true for three years now. The number of retailers who mail every month continues to increase, rising by three percentage points in 2001, following a similar increase in 2000. Every-other-month mailings dropped by 3 percentage points this year; it had increased by the same amount in 2000.
Retailers report using variety of sources for their mailing lists. Guest books and data from checks and credit cards still rank at the top as sources. They also choose from many different kinds of direct mail pieces to send. Foremost are sales or special event announcements, used by more than half of all the retailers, followed closely by newsletters or flyers, used by slightly less than half. More than a quarter sent discount coupons of some type as a mailing, while just under a fifth mailed out catalogs of products.
SPECIAL EVENTS
Special events are an important and relatively inexpensive method retailers use to attract both new and repeat customers to their stores. Open houses and holiday events still top the list, with open houses the most frequent type of special event held. In both 2001 and 2000, four-fifths of the retailers surveyed said they hold special events, compared with two-thirds in 1999. On average, about 8 percent of ad dollars are allocated to special events.
STAFFING
Part-timers make up about two-thirds of the total staff in gift and decorative accessory stores. During peak seasons, three-fifths of the retailers employ additional sales staff. Of those, more than three quarters add additional sales employees for the holiday season. Retailers report adding a median of two seasonal sales employees for their peak seasons.
SALARIES AND WAGES
Gift and decorative accessories retailers allocate a median of 16 percent of annual gross sales to payroll, with another 5 percent going to fringe benefits, an increase over the 12 percent and 3 percent reported for last year.
Annual salaries for full-time sales staff fall between $15,000 and $20,000 and $20,000 and $25,000 for about a third of the retailers each; the median annual salary is $20,000. Almost three-quarters of full-time sales employees work 40 hours a week or less. Half of the part-time sales staff earn less than $7.00 per hour; the median pay rate is $7.13. Two-thirds of the part-timers work 20 or fewer hours each week.
FRINGE BENEFITS
Merchandise discounts remain the most frequently offered fringe benefit for all sales employees, and for the majority it is the only fringe benefit given to part-time sales staff.
ALL IN THE FAMILY
This year we questioned retailers in more detail about family members working in the stores. For the family-owned stores, almost two-thirds use the store's income as a secondary source of income. For a fifth of the retailers, the store represents their only source of income. Storeowners revealed that over half pay themselves on a regular schedule while just over a third (38 percent) pay themselves periodically out of profits.
THE SURVEY
The survey findings are based on the responses of 114 gifts and decorative accessories retailers operating across the country, with 20 percent in the Northeast, 28 percent in the South, 19 percent in the West, and 33 percent in the Midwest.
A majority (78 percent) of the retailers characterized their store as a gift specialty store. Home accessories, stationery/card, toy/hobby, or some other combination made up the remainder. Only three percent were either a franchise or a publicly held company; 97 percent of the stores are independent or family-owned.
Judi Fulbright was lead researcher for the survey, conducted by Gifts & Dec's market research department. If you are an independent gift and decorative accessory retailer and would like to take part in future surveys, please send your name, address, and telephone number to Judi Fulbright, Reed Business Information, P.O. Box 2754, High Point, NC 27261, or fax it to her at (336) 605-1143.
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