Its time for the independents to tighten up their belts and get costs under control. At Fashion Enter (sister company to www.fashioncapital.co.uk)  we have two boutiques with a third planned in October at Kingston on Thames and we totally understand how difficult the current retail climate is.
 

Here  are some of our pointers to help you along your way that we have been following over the last few months….

Keep stock control tight.

We are in a favourable position as we sell by sale or return and we are here to promote the designers themselves however many of our retailer members are not in that position and want to buy their own stock. Keep it tight…really tight. You are better to under order and sell out rather than go for bulk discounts and then have to reduce your margin. Its also a good message to customers. Buy now or it will be sold out. If you start over-ordering then you have to make sure your cash flow can support this and remember if you forward buy then this is taking up valuable money for new trends that emerge during the season. Stock especially prints can date very quickly and the shelf life of stock is maximum 6 weeks before display and re merchandising (plus discounting) has to take place.

Don't over spend…keep your budgets tight.

I know many retailers don't have purchasing budgets – they pray for the good Saturday and Sunday sales so they can have a little cash to buy something new. Try to budget – I know its not easy but you do need to  forecast and keep to a plan. Many independent retailers are owner managers too and will forego having a salary for a month or two to buy stock. Don't delude yourself because this is a business and you need to survive too. If you forecast ahead of time you can see where the cash flow may be tight. Certainly don't keep racking new stock payments on your credit card -it mounts up too quickly. You need to pay your creditors on time so that's one reason why planning is key ot success. Keep buys narrow and order small quantities frequently so that newness keeps ringing in. Remember too that there are rolling ranges now so keep your best sellers flowing. If you have a legitimate reason to cancel a line then cancel it – don't be afraid to tell a supplier something is not right.  This is your business so protect it!

Do the best you can at all times.

My husband used to say to me "It will do will never do! " I could have hit him square between the eyes some days but fundamentally this is correct. There are always time pressures and commitments but doing the best you can in everything is a way to keep your standards high. Service today is so important and ringing up customers asking if they are happy with their new purchase shows that you do care. Keep looking after your loyal customers as it pays dividends…have you thought about a special night opening for you're A star customers

Can you make your job easier…invest in a computerised stock management system?

This is one of the next steps for Fashion Enter – we can't invest now in a full blown EPOS system but we are seeking ways of using an automated inventory system especially as we will shortly have three boutiques – the third being in Kingston. More on this later as we conduct research..
 

Roll out your best sellers.

That old 80: 20 rule applies to most retailers – it certainly does with Fashion Enter. This is when 80% of your sales are generated from just 20% of stock. Typically you would reduce the lines that don't sell or even auction them via the web to make way for new stock but this is not the case for us. We try hard to promote the garments via www.fashioncapital.co.uk and through our PR Dispensary Service and it does work to raise the exposure. Traditionally retailers will negotiate better terms with their leading suppliers and may even negotiate sale or return or buy back – contribution to discount.. You can pick up some good deals on stock at the moment with prompt settlement discounts but just watch your cash flow here.

Reduce your overheads.

Staff is always the largest single over head each month for retail. Legally you have to have two members of staff each day and then there is holiday cover, lunch time cover and part time help too. Its not easy! Rent and rates are also a killer and the service charges can be horrendous. Keep reviewing your utilities and insurance costs here. Don't be afraid  to ring up your insurance company and ask for a better deal…same with the telephone and internet too. If you don't ask you will never know. You can join trade associations too such as BSSA and your local  Chamber of Commerce to gain special member deals. The BSSA have a  partnership arrangement with HSBC and this provides preferential rates on credit card transactions and  merchant services terms

5 simple steps to effective cost management

Be part of your community.

We have always engaged a the local community level so we can raise our profile with all levels of shoppers. This could include events such as the Face of Croydon which has just successfully been completed and has now lead on to the Face of Barking and Dagenham. Its fun to engage with areas outside of the normal retail environment, working with schools so they understand fashion, funders to reach out to new designers that need help and support…there are many disadvantaged groups out there in every community and to give a little normally means you have a lot back in return.

Winning over customer loyalty is one way to aid in reducing your risk during a recession – its far easier to keep existing customers than it is to find new customers.

 
Keep doing your market research on your competitors – do that comparative and directional shop!.

You always have to keep an eye on your competitors (comparative) but you also need to know what your inspirational retailers are doing too…where do you want your company to aspire too – do you see another Hobbs type operation for the future? Go in and look at their product mix. Look at the price points – value for money? What is on the prime footage – what is on secondary location? Is the stock turning quick enough? Front window displays? Do a SWOT analysis even if this is mentally in your head – what are their strengths, weaknesses, what opportunities do they have that you don't have and what are their weaknesses – make them your strengths!

We recently had Primark open in Croydon and whilst we don't regard them as a direct competior they have affected footfall. So to retaliate this we went all out on press with the Face of Croydon and our own unique messages of "exclusive – be different – be you….the boutique for the unique!" You have to keep ducking and diving and find out what your customer's value most from you.

Keep ahead of the game for consumer trends and new retail developments.

You have to know what the right consumer trends are for you or if you want to be different find out what the mass high street is doing and then do your own thing…it all depends on what your USP really is. Make sure you stay informed of be reading  trade press and keep your eye on trend websites and trade shows. Knowledge is power!

Improve your customer experience –

Be clear with your customer returns policy and keep them happy!

Do you reralsie that you don't have to return a garment just because a person has changed their mind – even if they have not worn it? Be clear about your trading standards and ensure that your returns policy is clearly highlighted so the customer can see the terms. Its not a pleasant situation to have to query if a customer has worn a garment and the packaging has been bent so make sure that your terms are clear for all.

Get to know your individual customers and greet them by their name, always greet them and say "Hi how are you" don't pressurise them and get to know about their colour and tastes. Take the time out to spend a few minute with your core customers and keep them smiling!  Create a database of information for all your customers and then with your best customers make them feel special…a card on their birthday makes all the difference! Preview evenings with drinks and canopies may be a little expensive but may also bring in those sales.

For new customers make sure you note their name on their credit card, thank them by name when you had the purchase back  and make a note of it for next time. If there has been a slight delay at the tills then remember to say sorry and keep smiling  at all times. A tutting customer can be very off putting so keep eye contact with them.

Visual display.

You only have to watch Mary Queen of Shops to understand the iimportance of this note. Make that front window  the front window to your business. Create a jaw dropping window display and keep ringing in those changes weekly! Be original with your merchandising and display and then follow this through with your internal display and visuals.. You want new shoppers to be intrgued and encourage them to browse. Make the shopping an experience that they will enjoy and tell their friends about . Don't have bins on display for customers to see – especially full bins and make sure that staff do not have clutter around the till area.t Keep your lighting right for the ambeinece of the boutique and make sure that every single garment and item is priced clearly.

 
Encourage multi buys

TThis is retailing at its best; once a customer has bought one product suggest a complimentary product that makes can make an outfit/ Remembet that nothing is too much trouble and if an item is out of stock suggest that you contact your suppliler to reorder just for them…then follow through with the subseqeuent phone call of course. Make the customer feel special!

Press and PR

Advertising is very expensive so look for the PR route – another reason why working with the local community can bring in dividends too. Know both the local  publications your customers read and also the consumer press that are the influencers on buying decisions. Getting to know the feature writers is important so you can start supplying them with snippets  of editorial or ads if there are relevant forthcoming special features. If you are in a Shopping Centre the management teamshoud be there to support you too for generic advertising. Get yourself on their webstie with your own information and engage with other local retailers too.

You also have to respond to emails promptly and communicate effectvely

Remember the importance of the web

Many independents don't sell on line but they do have a website to prmote the company – just as the shop window in the entrance to your boutique the website is the entrance to your entire company…make sure that the image is right for what you want to portray. Emil communication is cheaper than phone lines and letters so encourage customer feedback this way. Put up regular snippets of information on the web as there is nothing worse than old news!

Remember that journalists and feature writers will go onto your website if they do want to write a feature about you. Keep it fresh and alive with newness.

 
A happy worker is a good worker

Staffing issues and legislation update can be a nightmare so keep ahead of information – that's where www.fashioncapital.co.uk can be a huge help.  An employer must keep staff secure and happy to enable an atmospheric place ot work that is full of vitality. Every six months Fashion Enter undertakes a Strategy meeting whereby every member of staff contribute to the meeting –  all feedback is encouraged good and bad as it's the only way to learn..

Make sure you comply with the latest rules on issues such as holiday pay, contracts, and grievance procedures. 

Each member of staff needs to  have  a formal written contract that specifies their job discripton. This may be time consuming but it's a necessity. Everyone needs to  know where they stand legally.

Legal requirements

You have to have a written health and safety policy plus abide by statutory requirements son minimum pay. (see Legislation on www.fashioncapital.co.uk )
 

You also have to file in your PAYE, VAT, Corporation and end of year figures if you are Limited Company. Personally I find PAYE a nightmare and as such we have subcontracted our this part of the legal requirements to MSP secretaries. I don't want to be awake at night worrying if the PAYE computations are correct!