Wednesday, July 29, 2009

10 ways to boost sales

1. End your slow sales periods by planning ahead. Plan to add extra bonuses, hold a sale or package your product with other products.

2. Make more commissions off the affiliate programs you join by giving your personal endorsements for the products. They usually pull more sales than ads.

3. Speed up your internet access. You can get your online business tasks done faster which will help you stay ahead of your competition.

4. Allow people who do not have time to explore your site to download your web site in ebook format. This will allow them time to view it offline.

5. Use tons of headlines and sub headlines on your web site. This will keep their attention and keep them at your web site longer.

6. Take advantage of popular fads. If something is popular at the current time, put up a web site about it. Just promote your main site on the fad web site.

7. Allow your prospects to chose between a retail or wholesale price. Charge people a membership fee to always get the products at wholesale cost.

8. Allow other related web sites that don t have a chat room to link to yours. They ll get use of a free chat room and you ll draw extra traffic to your site.

9. Increase the perceived value of your free stuff or bonuses by including the retail dollar amount the freebie would normally sell for.

10. Create your own web ring. You will gain highly targeted traffic to your web site and others will link to your site because they ll want to join the ring.
Monday, July 27, 2009

Converting visitors to buyers

When you walk through the local shopping mall, what attracts you to one store over another? Is it strictly your needs at the moment, or is there more to it? Are you more likely to enter a store that's light, airy and inviting, or one that's kind of dark with narrow aisles and cluttered shelves? Eye appeal counts.

Learning from bricks-and-mortar establishments

For decades, marketing specialists have studied the buying habits of people shopping in bricks-and-mortar establishments using everything from focus groups to discount coupons to see what works. Based on accumulated data, these sell-pros know what works.

For example, the displays at the end of the supermarket, called end caps, are considered prime real estate on the shopping floor. In fact, manufacturers pay stores, or provide other incentives, just to get their ketchup displayed in an end cap. The store sells more, the manufacturer sells more and you've got a bottle of ketchup in the cupboard.

Marketing experts also know that products at eye level sell more than products on the bottom shelves and, again, eye-level shelf space comes at a premium. The next time you're in the supermarket, notice where the Coke is shelved. It's at eye level and the Coca-Cola Company knows it and offers stores a better wholesale price to get that shelf space.

Everything from the lighting (soft and natural, even if florescent) to the music playing in the background (tunes that wouldn't offend an aged grandmother) are all intended to entice you to buy at the supermarket, jewellery store or any place else that takes plastic (or cash, for that matter).

Making your website more tempting

These same, time-tested principles can be applied to ecommerce sites. When they are, you create an online environment that not only delivers the products visitors are looking for, but provides a pleasant experience as well. And, guess what? When that happens, the visitor-to-buyer conversion rate increases - and you start showing more profit in less time. So, what can you do to make your site more tempting, more attractive and more user-friendly?

Site design

The first rule is quite simple: know your buyers. If your target demographic is senior citizens, the dripping red pentangle against a black background is probably not your best choice of colour motifs. Perhaps something in the pastel area, soft colours. On the other hand, if you're targeting the 18-35 male buyer, go with the pentangle. It'll be something most of your expected foot traffic will recognize, and it definitely makes a statement. Colours count. Younger buyers want them bright, day-glo and totally wicked. The over 30 crowd wants something a bit more mature.

Text should be easily readable by anyone. This involves three considerations: font style, font size and text/background colours. Choose an easy to read font - Verdana or Arial often fit the bill. Consider font size. Banners should be at least 16-point, 20-point if it'll fit. As a general rule of thumb any font size less than 12-point is strictly off limits, except for fine print (e.g. legal mumbo-jumbo) which can be in 8-point to save valuable screen space. Finally, the combination of font colour and background colour is critical.

Site structure & layout

Keep your homepage simple and inviting. A cluttered homepage can quickly lead to sensory overload and send any buyer screaming for the virtual doorway, a mouse click away. Use large, well-labelled links for ease of use. Forget your 'artistic vision' for a moment and forget everything you learned in graphic design for print. Keep it simple, understated, well labelled and well organised. That way visitors will be more inclined to stick around, browse and, ultimately, buy.

A site map is a useful tool, especially if you've got multiple links off the homepage, followed by assorted drill-down screens before users find the products they're looking for. A site map is easy to build - basically a plot of the site, with direct links to specific features.

A secure checkout is also a must, even if you have to go the PayPal route. Online buyers are becoming more and more savvy so, no encryption, no sale. Your site should make it easy to shop with a shopping cart that can be changed with a click, a fast secure checkout and an invoice in the e-mail box (with a confirmation number). Do this and you're building a base of buyers who'll be back because you had the goods and you made it easy, convenient and fun.

Keep in touch with your users

If possible, give your users something for free. Check out sites selling e-books and other niche information. You'll often find a free 10-page report on 'everything you need to know before buying a turtle as a pet'. Naturally, the teaser provides just enough information to let buyers know they now need the £19.95 download on the ABC's of Turtle Care.

This can also provide potential buyers with the opportunity to 'opt-in'. The 10-page teaser can require buyers to enter an e-mail address, thus opting in for additional e-mails from you in the weeks and months to come. That's what the auto-responder business is all about - keeping your site's name in front of buyers.

With an opt-in, you can also deliver a monthly newsletter, the tip of the week or even the daily horoscope. This provides useful (or at least entertaining) information to keep your visitors' awareness of your site high, and their feelings about you good. After all, you're giving them something for free in the hope that they'll be back to buy. Good will goes a long way, even in the cold, transistorised world of ecommerce.

A final word

Eye-catching, convenient, uncluttered, easy-to navigate, easy-to-read and something for free - it's like a trip to the old local, corner market where Mr. Mishkin would give you a free Fireball when you came in with your mother.

There aren't any tricks or secrets to increasing your conversion rate. Ask yourself what you expect from any store you visit. Then, translate your wishes to site features to accommodate even the fussiest buyer. After all, even in cyberspace the customer is always right.

This article was written by Frederick Townes. Frederick is the owner of W3 EDGE, a web design company.

No Foreign Hand, For Now

If you were hoping to see a Wal-Mart store in your locality soon, you may be disappointed. The government has made it clear that it is against the idea of 100 per cent Foreign Direct Investment (FDI) in front-end multi-brand retailing. "The Congress government has come to power by supporting the farmer, the middleman in mandis and the kirana store. Now aiding modern retail will be the last thing on their mind," says a Mumbai-based retail analyst, who did not want to be named.

Even if front-end retail stays domestic, most companies are struggling to become profitable. And it is not just about the money. For the moment, the retail industry continues its search for cash and hopes to keep expansion plans going despite heavy losses. Kishore Biyani's Pantaloon Retail hopes to add 2 million sq. ft by the end of this year. Similarly, Aditya Birla Retail has just announced plans to add another 150 stores.

"The quandary lies in getting FDI, which is needed to service a large presence through an efficient supply chain strategy," says Ajay D'Souza, head of Crisil Research in Mumbai.

For suppliers such as fast moving consumer goods (FMCG) companies, only 5 per cent of their sales is through organised retail, the rest is through kirana stores.

Modern retailers also burnt their fingers trying to source fresh food directly from farmers. "People can go to (their neighbourhood) kiranas and get their vegetables at the same price as that offered in a retail store, so food did not become a driver in retail stores," says Pinakiranjan Mishra, partner and national leader for retail at Ernst & Young in Mumbai.

Building a supply chain has not been a strength among organised retail players, and so it is back to sourcing from the vegetable mandi.

And that is perhaps what FDI in retail can do: bring in outside expertise on building and integrating supply chains with the attendant quality and pricing that will persuade consumers to go into supermarkets.

But politics intervenes. The inability to source directly from farmers is constrained by land ownership laws that stand in the way of farm aggregation. "Firms cannot aggregate land from farmers to create a farm-to-fork connect," says a finance ministry official who did not wish to be named. "The government fears that if companies own large tracts of farm land, then they would be able to command food prices and production." And let us not forget the voter base that mandis and kirana stores represent.

For the moment, the FDI hopes of organised retailers seem to be quashed.

Article from Third Eyesight

Homeware retailers change tack - Adopt new strategies to prop sales and cut losses.

Speciality homeware retail chains, such as Kishore Biyani's HomeTown, Landmark group's Max Retail and Wadhawan group's Home Store, have changed tack as home sales drop and shoppers defer buying big-ticket items like furniture and furnishing to save cash in the downturn.

The realty sector has seen home sales fall by up to 70 per cent in the early part of this calendar year from the peak in 2007-08 and developers have shifted to smaller, affordable homes to counter the drop in sales. Consequently, retailers are witnessing a drop in sales, too.

Pantaloon Retail, the country's largest listed retailer, has seen a continuous slide in same-store sales in its home retailing segment in the last seven months. From a steep fall of 36 per cent in November 2008, Pantaloon has seen further drops, ranging from 4 per cent to 28 per cent, in home retailing from January-May 2009.

To counter the slowing sales, retailers have adopted strategies to prop sales and cut losses. For instance, HomeTown has increased its offering in the value segment and launched furniture and bedroom sets in the Rs 10,000-15,000 category to boost sales.

HomeTown is also planning a shopping event called 'Home Carnival' soon. "Home retailing was in doldrums in the end 4-6 months of 2008. People were not buying new homes and that was impacting home retailing," said Mahesh Shah, chief executive of HomeTown, a part of Pantaloon Retail.

Max Retail, a part of the Dubai-based Landmark group, has removed the home category from its stores altogether, while others like the Mumbai-based Wadhawan group - which acquired Home Store, a chain selling homeware items earlier - is not expanding its half-a-dozen stores to conserve cash.

Max is also reducing its store size to 10,000 sq ft from 14,000 sq ft to optimise costs. The home category used to occupy 6 per cent of its space, while contributing 10 per cent of its revenues.

After a lackluster performance in the last six months, homeware retailers believe things have changed in the last two-three weeks with the sales of affordable homes picking up.

"Sales have picked up since last month. We are expecting 5-6 per cent growth from next month onwards," said Shah of HomeTown, which is planning to open four stores in Mumbai, Bangalore and Kolkata in the coming months.

According to estimates, the overall home retail market in the country is over Rs 50,000 crore in size, with organised retail segment accounting for just 10 per cent of that. Local carpenters and small furniture shops cater to most homeware needs.

"There is a lot of competition from unorganised players and it is difficult to make an impact here," said Vasanth Kumar, executive director of Max Retail.

Analysts say retailers prefer those categories which require less working capital and shorter inventory levels to beat a downturn. The home segment is considered as a high-inventory and capital-intensive segment. Food and grocery requires an inventory of 15-30 days, furniture and furnishings require inventories of 4-6 months.

International retail consultancy AT Kearney's Debashish Mukherjee feels organised home retailing is yet to make a dent in the country.

"The average number of rooms per family and average square feet per person in India is very low. Since most of the furniture is imported, people do not have space for that. Besides, since the chains sell furniture made out of composite materials, Indian consumers are yet to move from wood to new materials," Mukherjee said.

Article from Third Eyesight

Saturday, July 18, 2009

FDI restrictions to remain - Scindia

Scindia in a written reply in the Rajya Sabha, said "The government also fully recognizes the need to ensure that small retailers are not adversely hit by the growing organized retail and that there is no adverse effect on employment"

Scindia enclosed an ICRIER study to back his statement, which pegged the retail trade increase at 10 per cent per annum from US $10 billion in 06-07 to US$ 496 billion in 11-12.

The study nails the growth of the organised retail segment at a sizzling pace of 45-50 percent with an anticipated market share of 16 percent by 2011-12.

Interestingly, the study makes a pitch for opening up the retail trade sector as there was no grounds of employment in the unorganised retail segment being effected by the growth in the organized retail segment.

The study is also of the belief that Farmers and consumers both will benefit significantly by the farmers selling straight to the organized retail merchants.

The ICRIER report says that farmers selling direct to the organised retail merchants realizes upto 60% more profits than sellling to middlemen such as the mandi's (wholesale markets).
Friday, July 3, 2009

Retail Math - 1

As work progresses on my new web-site (will announce later), I noticed we have never touched on the basic fundamental Retail Math. I will post basic formulas that are used in Retail and hope you will benefit from them.

Profit / (Loss) = Gross Margin – Expenses

Expense % = Expenses (Rs) / Net Sales (Rs)

Gross Margin % = Gross Margin (Rs)/ Net Sales (Rs)

Profit % = Profit (Rs)/ Net sales (Rs)

These formulas are used globally and are applicable to Indian Retail as well.

more later...
Wednesday, July 1, 2009

Retailing in India

Rated as the top destination for retail by GRDI again this year, India remains ahead of China and other destinations for retail investment. With a population of 1.2 bn and organized retail still below 6%, Indian retail is unexplored, providing tremendous opportunities for domestic as well as foreign retailers.

The opportunities not only lie with front end retail, but a multitude of opportunities lie in the back end. Service providers, retail software companies, housekeeping and security services, training, you name it and these sectors for organized retail are unexplored.

With the boom in Indian Retail, massive infrastructural development is expected in the coming years. Malls, shopping arcades have started mushrooming, not only in Teir1 cities, but in Tier2 and Tier3 cities as well. The economy will receive a boost with the investments. The current unemployment rate in India is estimated at below 7%. The population itself is young with a median age below 26 years.

Large Indian business houses have already invested or are investing in Retail. Key foreign players have also set shop, some directly, but most in partnerships, because of the Indian Government's stand on Foreign Direct Investment (FDI). It is only a matter of time, the Indian Government will relent it's stand and floodgates with open for investments.

The Indian retail market has a lot of space and there is demand and appetite for merchandise. Established foreign players will find it easy to generate better returns in India.

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