As I mentioned previously, one of my big goals for 2012 is to learn the ins and outs of running a retail business. Not just the traditional salon retail but expanding into a specialty gift boutique. Since I've never even worked in retail, there's a lot to learn! In the past two weeks I've read five books and spent countless hours searching the web looking for ideas. Last week I had the unexpected benefit of a snowstorm that shut us down on our little island, so I had nine days straight to focus on this goal!
There's a lot of information out there on how to manage a retail program, but as I have discovered, there's really not much specific to this industry (nails plus boutique). So I think my first challenge is to take what I'm learning and always run ideas through the filter of salon life. My first priority always has to be my client and services, and everything has to be done in such a way that it doesn't negatively impact those. All of the books I've read are geared toward people wanting a retail shop with very large numbers, and most of them deal with multiple positions that need to be filled for operation. As we all know, typically the nail technician gets to wear ALL those hats! So to start, I've identified my two biggest hurdles to achieve my goal.
Traffic: how many people do I really want coming through my studio every day? While most gift shops would likely have goals of sales in the six figures (or higher). I broke down my sales goals to see what the impact would be to a solo operation. My average retail price for items sold in 2011 was just under $20, so if I have a goal of $4,000 per month in retail sales, that means an average of 200 items per month, or roughly 50/week, or 10/day. Now assume a 50% conversion rate (someone coming in vs. actual buyers). That would mean I need 20 people per day coming in.
Personally, I never have more than seven or eight clients a day in my shop, which means I would have anywhere from 10 to 15 interruptions to services throughout the day to reach that goal. Bottom line, any goals set need to take traffic into consideration, and whether I would need a shop assistant to make it happen. And if I hire an assistant, those goals would have to be set even higher to offset employee costs in addition to marketing costs to bring in the extra non-client traffic. Ahhh, but imagine converting that traffic into clients!
The second biggest area to consider is my assortment planning. Every new product line I bring in has to "fit" with everything else that's already in place. From the studio atmosphere, client demographics, quality and price points, and compatibility with other retail lines. Just an example, I brought in a really beautiful pottery line that is made locally and fairly unique. The price was right, the quality great...but it didn't fit with everything else, and so sales were dismal, and I'm now in the process of a clearance sale.
I narrowed my focus to four areas: Fashion Accessories, Personal Care, Decor, and Novelty. I decided to focus on items that are either consumable, collectible/giftable (able to generate repeat sales), not readily available locally, and made in the USA. So far in January I introduced two new lines, and both of them are off to a great start. One line is actually manufactured an hour from where I live, and I sell something from it pretty much every day, so the response is good. It actually meets all four criteria. The other line has only been on the floor for a day, but it generated immediate sales. I also have three new lines that should be here next week, so I hope they are hits as well!
—Candice, Panache Nail Studio, Stanwood, Wash.
| posted on Thursday, January 26, 2012 11:04 AM